10-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)
x	Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934
	For fiscal year ended December 31, 2006

o	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

COMMUNITY CAPITAL BANCSHARES, INC.

(Exact Name of Registrant as Specified in its Charter)

Georgia		58-2413468
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
2815 Meredyth Drive, Albany, GA		31707
(Address of Principal Executive Offices)		(Zip Code)
	(229) 446-2265
(Issuer’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:	Common Stock, $1.00 par value listed on The
	NASDAQ Stock Market LLC.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o   No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o   No x

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 and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

The aggregate market value of the registrant’s outstanding common stock held by nonaffiliates of the registrant as of June 30, 2006, was approximately $26,947,000. There were 3,026,777 shares of the registrant’s common stock outstanding as of April 6, 2007.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Annual Report to Shareholders for the fiscal year ended December 31, 2006 are incorporated by reference into Parts I and II. Portions of the Proxy Statement for the Annual Meeting of Shareholders, scheduled to be held on May 21, 2007, are incorporated by reference into Part III.

TABLE OF CONTENTS

Page

PART I	2
ITEM 1.DESCRIPTION OF BUSINESS	2
ITEM 1A.RISK FACTORS	17
ITEM 1B.UNRESOLVED STAFF COMMENTS	19
ITEM 2.DESCRIPTION OF PROPERTIES	19
ITEM 3.LEGAL PROCEEDINGS	20
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	20
PART II	20
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	20
ITEM 6.SELECTED FINANCIAL DATA	21
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	21
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	22
ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	22
ITEM 9A.CONTROLS AND PROCEDURES	22
ITEM 9B.OTHER INFORMATION	23
PART III	23
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	23
ITEM 11.EXECUTIVE COMPENSATION	23
ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	23
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	25
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES	26
PART IV	27
ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	27

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

Community Capital Bancshares, Inc. (“Community Capital” or the "Company") may from time to time make written or oral "forward-looking statements", including statements contained in the Company's filings with the Securities and Exchange Commission (including this annual report on Form 10-K and the exhibits hereto), in its reports to shareholders and in other communications by the Company, which are made in good faith by the Company pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995.

These forward-looking statements involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations, estimates and intentions, that are subject to change based on various important factors, some of which are beyond the Company's control. The following factors, among others, could cause the Company's financial performance to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements: the strength of the United States economy in general and the strength of the local economies in which the Company conducts operations; the effects of, and changes in, trade, monetary and fiscal policies and laws, including interest rate policies of the Board of Governors of the Federal Reserve System; inflation; interest rate, market and monetary fluctuations; the timely development of and acceptance of new products and services of the Company and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors' products and services; the willingness of users to substitute competitors' products and services for the Company's products and services; the success of the Company in gaining regulatory approval of its products and services, when required; the impact of changes in financial services' laws and regulations, including laws concerning taxes, banking, securities and insurance; technological changes and acquisitions; managing credit risk; changes in consumer spending and saving habits; the impact of war or terrorism; and the success of the Company at managing the risks involved in the foregoing.

The Company cautions that the foregoing list of important factors is not exclusive. For further information regarding the risk factors applicable to the Company, please see “Risk Factors” on page 17. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.

PART I

ITEM 1.DESCRIPTION OF BUSINESS

Community Capital

Community Capital is a bank holding company headquartered in Albany, Georgia and is registered under the Bank Holding Company Act of 1956, as amended. Community Capital was incorporated under the laws of the State of Georgia on August 19, 1998 and is the sole shareholder of Albany Bank & Trust, N.A. and AB&T National Bank. Community Capital common stock is quoted on the Nasdaq Capital Market^® under the symbol “ALBY.”

Community Capital’s principal business is the ownership and management of its subsidiary banks. Community Capital was organized to facilitate its subsidiary banks’ ability to serve their customers’ requirements for financial services. The holding company structure provides 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. Albany Bank & Trust operates two full-service banking locations in Albany, Georgia and one full-service banking location in Lee County, Georgia.

AB&T National Bank, which was formerly known as First Bank of Dothan, was acquired by Community Capital on November 13, 2003. On September 13, 2004, we changed First Bank of Dothan’s name to “AB&T National Bank” and converted its charter from an Alabama state bank charter to a national bank charter under the laws of the United States. AB&T National Bank operates one full-service banking location in Dothan, Alabama, and one full-service banking location in Auburn, Alabama.

Albany Bank & Trust and AB&T National Bank (collectively, the “Banks”) offer lending services which include consumer loans to individuals, commercial loans to small- to medium-sized businesses and professional concerns and real estate-related loans. The Banks offer 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 five full-service locations, 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 and Lee counties, 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 the Banks offer residents in their respective market areas the benefits associated with a locally-owned and -managed bank. The Banks’ active call programs allow their 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, all officers of the Banks are local residents with substantial banking experience in their market areas, which facilitates the Banks’ efforts to provide products and services designed to meet the needs of our customer base. The Banks’ directors are active members of their respective business communities, and their continued active community involvement provides them with an opportunity to promote the Banks and their products and services.

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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 Federal Deposit Insurance Corporation (the “FDIC”) as of June 30, 2006, Dougherty County was served by 12 commercial banks with a total of 30 offices in Dougherty County. As of June 30, 2006, the total deposits within Dougherty County for these institutions were approximately $1.40 billion, of which approximately $191 million was held by Albany Bank & Trust. At December 31, 2006, Albany Bank & Trust’s total deposits were $156 million. We believe our local ownership and management as well as our focus on personalized service help us to compete with these institutions and to attract deposits and loans in our market area.

AB&T National Bank is headquartered in Dothan, Alabama. Its primary market areas are Houston and Lee counties, Alabama. AB&T National Bank draws a majority of its business from the Houston County market area due to the maturity of its presence in this market. According to information provided by the FDIC as of June 30, 2006, these two market areas were served by 21 commercial banks. As of June 30, 2006, total deposits within these counties were approximately $3.27 billion. At December 31, 2006, AB&T National Bank’s total deposits were $83 million. Like Albany Bank & Trust, AB&T National Bank must compete with the larger institutions by promoting prompt, personalized service to its customers.

Loan Portfolios

Lending Policy. Our 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. The composition of our loan portfolio as of December 31, 2006 was as follows:

Loan Category	Ratio
Real Estate Loans	80%
Commercial Loans	16%
Consumer Loans	4%

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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. The Banks 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 85% 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 85%. 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.

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Consumer Loans. The Banks 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 loans generally are amortized over the useful life of the asset. To minimize the risk that the borrower cannot afford the monthly payments, all fixed monthly obligations generally do not exceed 40% of the borrower’s gross monthly income. The borrower should also be employed for at least 24 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, 2006, investment securities comprised approximately 12% of the Company’s assets, with net loans comprising approximately 74%. Both subsidiary banks also engage in federal funds transactions with their principal correspondent banks and primarily act as net sellers 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 Banks’ 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 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. The Banks 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.

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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. The Banks’ other banking services include ATM and Visa 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 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, 2006, Community Capital and its subsidiaries employed 72 full-time employees and 12 part-time employees. Community Capital considers its relationship with its employees to be excellent.

Supervision and Regulation

The Company and the Banks 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

Because it owns all of the capital stock of the Banks, Community Capital is a bank holding company under the federal Bank Holding Company Act of 1956 (the “BHC Act”) and, as a result, is primarily subject to the supervision, examination, and reporting requirements of the BHC Act and the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve”). As a bank holding company located in Georgia, the Georgia Department of Banking and Finance (the “GDBF”) also regulates and monitors all significant aspects of our operations.

Acquisitions of Banks. The BHC 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.

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Additionally, the BHC 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. The Federal Reserve’s consideration of financial resources generally focuses on capital adequacy, which is discussed below.

Under the BHC 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. Currently, 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 the Banks because they have been in existence for the applicable time periods.

Change in Bank Control. Subject to various exceptions, the BHC 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 Exchange 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. A bank holding company is generally permitted under the BHC Act to engage in or acquire direct or indirect control of more than 5% of the voting shares of any company engaged in the following activities:

· banking or managing or controlling banks; and

· any 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;

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· 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.

In addition to the permissible bank holding company activities listed above, the Financial Services Modernization Act of 1999, or the Gramm-Leach-Bliley Act, revised and expanded the provisions of the BHC Act by permitting a bank holding company to qualify and elect to become a financial holding company. Under the regulations implementing the Gramm-Leach-Bliley Act, a financial holding company may engage in additional activities that are financial in nature or incidental or complementary to financial activity. The following activities are considered 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.

On December 18, 2006, the SEC and the Federal Reserve issued joint proposed rules, which would implement the “broker” exception for banks under Section 3(a)(4) of the Exchange Act of 1934 and would be adopted as part of the Gramm-Leach-Bliley Act. The proposed rules would implement the statutory exceptions that allow a bank, subject to certain conditions, to continue to conduct securities transactions for its customers as part of its trust and fiduciary, custodial and deposit “sweep” functions, and to refer customers to a securities broker-dealer pursuant to a networking arrangement with the broker-dealer.

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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 an 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. While we meet the qualification standards applicable to financial holding companies, we have not elected to become a financial holding company at this time.

Support of Subsidiary Institutions. Under Federal Reserve policy, Community Capital is expected to act as a source of financial strength for the Banks 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 the Banks 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 AB&T National Bank will be assumed by the bankruptcy trustee and entitled to a priority of payment.

Federal Reserve Resolutions. On November 27, 2006, pursuant to the request of the Federal Reserve Bank of Atlanta, Community Capital’s Board of Directors adopted resolutions (the “Resolutions”) that provide that Community Capital must receive the prior written approval of the Federal Reserve before it incurs additional debt, declares or pays dividends, or purchases or redeems treasury stock. The Resolutions also require quarterly financial information on the parent company and the subsidiary banks and written progress on the financial condition of the organization to be provided to the Federal Reserve.

Our Banking Subsidiaries

Since the Banks are chartered as national banks, they are 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 “OCC”). The OCC regularly examines our subsidiary banks’ operations and has the authority to approve or disapprove mergers, the establishment of branches and similar corporate actions. The OCC also has the power to prevent the continuance or development of unsafe or unsound banking practices or other violations of law.

Additionally, because the Banks’ deposits are insured by the FDIC to the maximum extent provided by law, the Banks are also subject to certain FDIC regulations. 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 their main offices are located. Under Georgia law, Albany Bank & Trust may open branch offices throughout Georgia with the prior approval of the OCC. 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, AB&T National Bank may open branch offices throughout Alabama with the prior approval of the OCC. In addition, with prior regulatory approval, AB&T National Bank may acquire branches of existing banks located in Alabama. AB&T National Bank 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 laws of the applicable state (the foreign state). 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.

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Prompt Corrective Action. The FDIC 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 regulators have specified by regulation the relevant capital level for each 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 regulators. 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 assesses higher rates on those institutions that pose greater risks to the Deposit Insurance Fund (the “DIF”). The FDIC places each institution in one of four risk categories using a two-step process based first on capital ratios (the capital group assignment) and then on other relevant information (the supervisory group assignment). Within the lower risk category, Risk Category I, rates will vary based on each institution’s CAMELS component ratings, certain financial ratios, and long-term debt issuer ratings.

Capital group assignments are made quarterly and an institution is assigned 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 banking 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 5 to 43 cents per $100 of deposits, depending on the institution’s capital group and supervisory subgroup. Institutions that are well capitalized will be charged a rate between 5 and 7 cents per $100 of deposits.

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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 1980’s as part of the government rescue of the thrift industry. This assessment rate is adjusted quarterly and is set at 1.22 cents per $100 of deposits for the first quarter of 2007.

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 banking regulators 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 the Banks. Additionally, we must publicly disclose the terms of various Community Reinvestment Act-related agreements.

Allowance for Loan and Lease Losses. The Allowance for Loan and Lease Losses (the “ALLL”) represents one of the most significant estimates in the Banks’ financial statements and regulatory reports. Because of its significance, each of the Banks has developed a system by which it develops, maintains and documents a comprehensive, systematic and consistently applied process for determining the amounts of the ALLL and the provision for loan and lease losses. The Interagency Policy Statement on the Allowance for Loan and Lease Losses, issued on December 13, 2006, encourages all banks to ensure controls are in place to consistently determine the ALLL in accordance with GAAP, the bank’s stated policies and procedures, management’s best judgment and relevant supervisory guidance. Consistent with supervisory guidance, each of the Banks maintains a prudent and conservative, but not excessive, ALLL, that is at a level that is appropriate to cover estimated credit losses on individually evaluated loans determined to be impaired as well as estimated credit losses inherent in the remainder of the loan and lease portfolio. Our estimate of credit losses reflects consideration of all significant factors that affect the collectibility of the portfolio as of the evaluation date.

Commercial Real Estate Lending. The Banks’ lending operations may be subject to enhanced scrutiny by federal banking regulators based on the concentration of commercial real estate loans. On December 6, 2006, the federal banking regulators issued final guidance to remind financial institutions of the risk posed by commercial real estate (“CRE”) lending concentrations. CRE loans generally include land development, construction loans and loans secured by multifamily property, and nonfarm, nonresidential real property where the primary source of repayment is derived from rental income associated with the property. The guidance prescribes the following guidelines for its examiners to help identify institutions that are potentially exposed to significant CRE risk and may warrant greater supervisory scrutiny:

· total reported loans for construction, land development and other land represent 100% or more of the institutions total capital, or

·   total commercial real estate loans represent 300% or more of the institution’s total capital, and the outstanding balance of the institution’s commercial real estate loan portfolio has increased by 50% or more during the prior 36 months.

As of December 31, 2006, the Banks were performing additional reviews to monitor commercial real estate loans. Additionally, management is working to reduce the ratio of such loans to total outstanding loans.

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Formal Agreements with the OCC. On July 27, 2006, each of the Banks entered into a written agreement with the OCC (the “OCC Agreements”). In order to comply with the OCC Agreements, the Banks have established committees to evaluate their compliance with the terms of the Agreements and have maintained higher capital levels. The Banks have reviewed the CEO, President, Senior Loan Officer and other management positions for the Banks to ensure that they have appropriate management in place to comply with all applicable laws and to manage the day-to-day operations of the Banks. The Banks have also improved their records and management information systems and information technology systems, have reduced their credit risk, and have reviewed and enhanced their lending policies and systems with regard to credit and collateral documentation, loan review and related records, and loan portfolio management. This has been accomplished in part by revision and re-approval of the Banks’ policies, enhanced reporting to and supervision by the Board of Directors, improved information security policies and procedures, and enhanced business continuity plans. In order to comply with its OCC Agreement, Albany Bank & Trust also has reviewed and enhanced its internal controls and its conflict of interest policy and overdraft policy, and has improved its insider transaction records. The OCC Agreements include additional commitments regarding strategic planning, allowances for loan and lease losses, interest rate risk, liquidity, internal audit, each Bank’s investments, and each Bank’s transactions with its affiliates, including Community Capital.

Prior to entering into the OCC Agreements, the Banks had already taken significant steps to address many of the above issues, and management of each of the Banks is committed to ensuring that all of the requirements of the OCC Agreements are met. Each of the Banks commissioned a third party management study, added executives and staff, increased the ratio of Tier 1 capital to risk-weighted assets and adjusted total assets, and improved each Bank’s liquidity position.

Other Regulations. Interest and other charges collected or contracted for by the Banks are subject to state usury laws and federal laws concerning interest rates. The Banks’ loan operations are also subject to federal laws applicable to credit transactions, such as the:

· 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, as amended by the Fair and Accurate Credit Transactions Act, governing the use and provision of information to credit reporting agencies, certain identity theft protections, and certain credit and other disclosures;

· 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, as amended by the Servicemembers’ Civil Relief Act, governing the repayment terms of, and property rights underlying, secured obligations of persons currently on active duty with the United States military;

· Talent Amendment in the 2007 Defense Authorization Act, establishing a 36% annual percentage rate ceiling, which includes a variety of charges including late fees, for consumer loans to military service members and their dependents; and

· rules and regulations of the various federal banking regulators charged with the responsibility of implementing these federal laws.

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The deposit operations of the Banks are subject to federal laws applicable to depository accounts, such as the:

· Truth-In-Savings Act, requiring certain disclosures for consumer deposit accounts;

· 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;

· 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; and

· rules and regulations of the various federal banking regulators charged with the responsibility of implementing these federal laws.

Capital Adequacy

Community Capital and the Banks are required to comply with the capital adequacy standards established by the Federal Reserve (in the case of Community Capital) and the OCC (in the case of the Banks). The Federal Reserve has established a risk-based and a leverage measure of capital adequacy for bank holding companies. The Banks are subject to risk-based and leverage capital requirements adopted by the OCC, 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 stockholders’ equity, minority interests in the equity accounts of consolidated subsidiaries, qualifying 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 hybrid capital, 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, 2006 our ratio of total capital to risk-weighted assets was 14.88% and our ratio of Tier 1 Capital to risk-weighted assets was 13.61%.

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, 2006, our leverage ratio was 9.37%. 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.

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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 the Banks. The principal sources of Community Capital’s cash flow, including cash flow to pay dividends to its shareholders, are dividends that the Banks pay to their sole shareholder, Community Capital. Statutory and regulatory limitations apply to the Banks’ payment of dividends to Community Capital as well as to Community Capital’s payment of dividends to its shareholders.

The Banks are required by federal law to obtain prior approval of the OCC for payments of dividends if the total of all dividends declared by their respective boards of directors in any year will exceed (1) the total of the bank’s net profits for that year, plus (2) its retained net profits of the preceding two years, less any required transfers to surplus. The payment of dividends by Community Capital and the Banks may also be affected by other factors, such as the requirement to maintain adequate capital above regulatory guidelines. At December 31, 2006, the Banks could not pay cash dividends without prior regulatory approval as provided under the OCC Agreements and the Federal Reserve Resolutions.

If, in the opinion of the federal banking regulator, either of the Banks was engaged in or about to engage in unsafe or unsound practice, the federal banking regulator could require, after notice and a hearing, that the bank stop or refrain from engaging in any practice it considers unsafe or unsound. The federal banking regulators 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 FDIC 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 banking regulators 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 and the Banks 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. The Banks must also comply with other provisions designed to avoid the taking of low-quality assets.

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Community Capital and the Banks 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.

The Banks 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.

Anti-Terrorism and Money Laundering Legislation

The Banks are subject to the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA PATRIOT Act”), as it amended the Bank Secrecy Act and the rules and regulations of the Office of Foreign Assets Control (the “OFAC”). These statutes and related rules and regulations impose requirements and limitations on specific financial transactions and account relationships, intended to guard against money laundering and terrorism financing. Community Capital and its subsidiaries established a customer identification program pursuant to Section 326 of the USA PATRIOT Act and the Bank Secrecy Act, and otherwise have implemented policies and procedures and policies to comply with the foregoing rules.

Federal Deposit Insurance Reform

On February 8, 2006, President Bush signed the Federal Deposit Insurance Reform Act of 2005 (FDIRA).

Among other things, FDIRA changes the Federal deposit insurance system by:

· raising the coverage level for qualifying retirement accounts to $250,000, subject to future indexing;

· authorizing the FDIC and the National Credit Union Administration to index deposit insurance coverage for inflation, for standard accounts and qualifying retirement accounts, every five years beginning April 1, 2007;

· prohibiting undercapitalized financial institutions from accepting employee benefit plan deposits;

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· merging the Bank Insurance Fund and Savings Association Insurance Fund into a new Deposit Insurance Fund (the DIF); and

· providing credits to financial institutions that capitalized the FDIC prior to 1996 to offset future assessment premiums.

FDIRA also authorizes the FDIC to revise the current risk-based assessment system, subject to notice and comment and caps the amount of the DIF at 1.50% of domestic deposits. The FDIC must issue cash dividends, awarded on a historical basis, for the amount of the DIF over the 1.50% ratio. Additionally, if the DIF exceeds 1.35% of domestic deposits at year-end, the FDIC must issue cash dividends, awarded on a historical basis, for half of the amount of the excess.

Financial Services Regulatory Relief Act

President Bush signed the Financial Services Regulatory Relief Act of 2006 (“Regulatory Relief Act”) into law on October 13, 2006. The Regulatory Relief Act repeals certain reporting requirements regarding loans to bank executive officers and principal shareholders. These changes eliminated the statutory requirements for (1) executive officers to report to the Board of Directors when the executive officer becomes indebted to another institution in an aggregate amount that is greater than the officer could borrow from his or her own institution; (2) the Banks to report all credits made to executive officers since the previous report of condition; and (3) executive officers and principal shareholders to report to the Board of Directors when the executive officer or principal shareholder becomes indebted to a correspondent bank.

The Regulatory Relief Act increased the size of a bank eligible for 18-month (rather than annual) examinations from $250 million to $500 million. The Regulatory Relief Act amends the privacy rules of Gramm-Leach-Bliley to clarify that CPA’s are not required to notify their customers of privacy and disclosure policies as long as they are subject to state law restraints on disclosure of non-public personal information without customer approval. Finally, the Regulatory Relief Act requires that the federal banking regulators develop model privacy notice forms and provides that banks adopting the model forms will be afforded a regulatory safe harbor under the disclosure requirements of Gramm-Leach-Bliley.

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 Policies

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’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.

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ITEM 1A.RISK FACTORS

An investment in our common stock involves risks. If any of the following risks or other risks, which have not been identified or which we may believe are immaterial or unlikely, actually occur, our business, financial condition and results of operations could be harmed. In such a case, the trading price of our common stock could decline, and you may lose all or part of your investment. The risks discussed below also include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.

We could suffer loan losses from a decline in credit quality.

We could sustain losses if borrowers, guarantors and related parties fail to perform in accordance with the terms of their loans. We have adopted underwriting and credit monitoring procedures and policies, including the establishment and review of the allowance for credit losses, that we believe are appropriate to minimize this risk by assessing the likelihood of nonperformance, tracking loan performance and diversifying our credit portfolio. These policies and procedures, however, may not prevent unexpected losses that could materially adversely affect our results of operations.

Lack of seasoning of our loan portfolio may increase the risk of credit defaults in the future.

Due to the rapid growth of the Banks over the past several years, a large portion of the loans in our loan portfolio and our lending relationships are of relatively recent origin. In general, loans do not begin to show signs of credit deterioration or default until they have been outstanding for some period of time, a process we refer to as “seasoning.” As a result, a portfolio of older loans will usually behave more predictably than a newer loan portfolio. Because a significant portion of our loan portfolio is relatively new, the current level of delinquencies and defaults may not be representative of the level that will prevail when this portion of the portfolio becomes more seasoned, which may be higher than current levels. If delinquencies and defaults increase, we may be required to increase our provision for loan losses, which would adversely affect our results of operations and financial condition.

Our profitability is vulnerable to interest rate fluctuations.

Our profitability depends substantially upon our net interest income. Net interest income is the difference between the interest earned on assets, such as loans and investment securities, and the interest paid for liabilities, such as savings and time deposits and certificates of deposit. Market interest rates for loans, investments and deposits are highly sensitive to many factors beyond our control. Recently, interest rate spreads have generally narrowed due to changing market conditions, policies of various government and regulatory authorities and competitive pricing pressures, and we cannot predict whether these rate spreads will narrow even further. This narrowing of interest rate spreads could adversely affect our financial condition and results of operations. In addition, we cannot predict whether interest rates will continue to remain at present levels. Changes in interest rates may cause significant changes, up or down, in our net interest income. Depending on our portfolio of loans and investments, our results of operations may be adversely affected by changes in interest rates.

We are operating under a Formal Agreement with the OCC which has caused us to limit our growth plans.

On July 27, 2006, each of the Banks entered into a written Formal Agreement with the OCC. Compliance with the requirements of the OCC Agreements requires us to increase the ratio of Tier 1 capital to risk-weighted assets and adjusted total assets and has led to a decrease in the Company’s total assets in order to reach specified capital levels. Any future increases in assets will be dependent upon the Banks’ ability to generate the additional capital necessary to support the growth. As a result, we have had to re-evaluate and limit our growth strategy for the foreseeable future.

We have adopted Resolutions, as requested by the Federal Reserve Bank of Atlanta, that require us to receive regulatory approval before paying dividends.

On November 27, 2006, pursuant to the request of the Federal Reserve Bank of Atlanta, our Board of Directors adopted Resolutions that provide that we must receive the prior written approval of the Federal Reserve before we declare or pay dividends. We must also receive prior written approval before incurring additional debt or purchasing or redeeming treasury stock.

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Additional growth may require us to raise additional capital in the future, but that capital may not be available when it is needed, which could adversely affect our financial condition and results of operations.

We are required by federal and state regulatory authorities to maintain adequate levels of capital to support our operations. We may at some point need to raise additional capital to support our continued growth or to meet our increased capital requirements under the OCC Agreements, as discussed above.

Our ability to raise additional capital, if needed, will depend on conditions in the capital markets at that time, which are outside our control, and on our financial performance. Accordingly, we cannot assure you of our ability to raise additional capital, if needed, on terms acceptable to us. If we cannot raise additional capital when needed, our ability to further expand our operations could be materially impaired.

If we fail to manage our past growth effectively, our financial condition and results of operations could be negatively affected.

We experienced significant growth in 2005 and in the first and second quarters of 2006. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies that have experienced this type of growth. Failure to manage our past growth effectively could have a material adverse effect on our business, financial condition, results of operations, or future prospects, and could adversely affect our ability to successfully implement our business strategy.

An economic downturn, especially one affecting our market areas, could adversely affect our financial condition, results of operations or cash flows.

Our success depends upon the growth in population, income levels, deposits and housing starts in our primary market areas. If the communities in which we operate do not grow, or if prevailing economic conditions locally or nationally are unfavorable, our business may not succeed. Unpredictable economic conditions may have an adverse effect on the quality of our loan portfolio and our financial performance. Economic recession over a prolonged period or other economic problems in our market areas could have a material adverse impact on the quality of the loan portfolio and the demand for our products and services. Future adverse changes in the economies in our market areas may have a material adverse effect on our financial condition, results of operations or cash flows. Further, the banking industry in our market area is affected by general economic conditions such as inflation, recession, unemployment and other factors beyond our control. As a community bank, we are less able to spread the risk of unfavorable local economic conditions than larger or more regional banks. Moreover, we cannot give any assurance that we will benefit from any market growth or favorable economic conditions in our primary market areas even if they do occur.

If the value of real estate in our core market were to decline materially, a significant portion of our loan portfolio could become under-collateralized, which could have a material adverse effect on our business, financial condition and results of operations.

With a significant amount of our loans concentrated in Albany, Georgia, a decline in local economic conditions could adversely affect the values of our real estate collateral. Consequently, a decline in local economic conditions may have a greater effect on our earnings and capital than on the earnings and capital of larger financial institutions whose real estate loan portfolios are more geographically diverse.

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In addition to considering the financial strength and cash flow characteristics of borrowers, we often secure loans with real estate collateral. At December 31, 2006, approximately 80% of our total loans had real estate as a primary or secondary component of collateral. The real estate collateral in each case provides an alternate source of repayment in the event of default by the borrower and may deteriorate in value during the time the credit is extended. If we are required to liquidate the collateral securing a loan to satisfy the debt during a period of reduced real estate values, our earnings and capital could be adversely affected.

A significant portion of our loans are located outside of our primary market areas where our ability to oversee such loans directly is limited.

Because approximately 30% of our loans are located outside of the Albany, Georgia and Houston and Lee Counties, Alabama market areas, our senior management’s ability to oversee these loans directly is limited. We may also be unable to properly understand local market conditions or promptly react to local market pressures. Any failure on our part to properly supervise these out-of-market loans could have a material adverse effect on our business, financial condition and results of operations.

ITEM 1B.UNRESOLVED STAFF COMMENTS

There are no written comments from the Commission staff regarding our periodic or current reports under the Act which remain unresolved.

ITEM 2.DESCRIPTION OF PROPERTIES

Community Capital’s executive offices and Albany Bank & Trust’s main office is located at 2815 Meredyth Drive, Albany, Dougherty County, Georgia. Albany Bank & Trust owns this property, which includes a two-story, Colonial-style building consisting of approximately 10,700 square feet, four drive-up widows, a night depository and one automated teller machine. Community Capital also owns the property at 152 East Bay Street in Charleston, South Carolina, which housed the Company’s loan production office. The loan production office ceased operations in December 2006, and this property will be acquired by Atlantic Bank & Trust in the second quarter of 2007 pursuant to the Separation Proposal entered into by Community Capital, Albany Bank & Trust and Atlantic Bank Holdings, Inc.

Community Capital also leases approximately 7,500 square feet at 2722 Dawson Road, Suite 1, Albany, Georgia 31707 under a five-year operating lease, which is used as its operations center. Albany Bank & Trust also operates two branch offices. The address, approximate square footage and lease information for these properties is set forth below:

Lee County Branch Office	Downtown Albany Branch
1533-B Highway 19 S	241 Pine Avenue
Leesburg, GA 31763	Albany, GA, 31701
5-year operating lease	30-year capital lease
1,500 square feet	2,500 square feet

AB&T National Bank is headquartered at 1479 W. Main Street, Dothan, Alabama. AB&T National Bank owns this property, which includes a one-story brick building consisting of approximately 6,000 square feet, three drive-up windows, one automated teller machine and a night depository. AB&T National Bank also operates a branch office, under the name of First National Bank of Lee County, in a one story banking facility located at 1943 E. Glenn Avenue, Auburn, Alabama. This property is owned and consists of approximately 5,000 square feet, three drive up lanes, night depository and an automated teller machine.

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Other than normal real estate commercial lending activities of the Banks, 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, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The response to this Item, including the performance graph, is partially included in Community Capital’s Annual Report to Shareholders (the “Annual Report”) under the heading “Corporate Information” and is incorporated herein by reference.

Community Capital issued no unregistered securities during the fiscal year ended December 31, 2006. Additionally, Community Capital did not purchase any shares of its common stock during the fourth quarter of 2006.

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ITEM 6.SELECTED FINANCIAL DATA

The response to this Item is included in the Annual Report under the heading “Selected Financial Information and Statistical Data” and is incorporated herein by reference.

ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The response to this Item is included in the Annual Report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and is incorporated herein by reference.

ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLSOURES ABOUT MARKET RISK

Market risk is the risk of loss from adverse changes in market prices and interest rates. Our market risk arises principally from interest rate risk inherent in our lending, deposit, and borrowing activities. Although we manage certain other risks, such as credit quality and liquidity risk, in the normal course of business we consider interest rate risk to be our most significant market risk and the risk that could potentially have the largest material effect on our financial condition and results of operations. We do not maintain a trading portfolio or deal in international instruments, and therefore, other types of market risks, such as foreign currency risk and commodity price risk, do not arise in the normal course of our business activities.

Quantitative information about the Company’s market risk at December 31, 2006 illustrates the percentage change in net interest income assuming an immediate change in rates as indicated:

Interest Rate Risk: Income Sensitivity Summary

Market Rate Change (Immediate)	Effect on Net Interest Income
+200 bps	1.83%
+100 bps	1.10%
- 100 bps	-.67%
-200 bps	-2.88%

The Company has adopted an asset/liability management program to monitor the Company’s interest rate sensitivity and to ensure that the Company is competitive in the loan and deposit markets. Management seeks to manage the relationship between interest-sensitive assets and liabilities in order to protect against wide interest rate fluctuations, including those resulting from inflation. The Company has not entered into any derivative financial instruments such as futures, forwards, swaps or options. Additionally, the information under the heading “Asset/Liability Management” in our Annual Report is incorporated herein by reference.

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ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements are included in Community Capital’s Annual Report to Shareholders, and are incorporated herein by reference.

§	Report of Independent Registered Public Accounting Firm
§	Consolidated balance sheets as of December 31, 2006 and 2005
§	Consolidated statements of income for the years ended December 31, 2006, 2005 and 2004
§	Consolidated statements of comprehensive income for the years ended December 31, 2006, 2005 and 2004
§	Consolidated statements of stockholders’ equity for the years ended December 31, 2006, 2005 and 2004
§	Consolidated statements of cash flows for the years ended December 31, 2006, 2005 and 2004
§	Notes to consolidated financial statements

ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

ITEM 9A.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 principal executive officer and principal financial officer have evaluated the effectiveness of our "disclosure controls and procedures" ("Disclosure Controls"). Disclosure Controls, as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this annual report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our principal executive officer and principal financial officer, does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

22

Based upon their controls evaluation, our principal executive officer and principal financial officer have concluded that our Disclosure Controls are effective at a reasonable assurance level.

ITEM 9B.OTHER INFORMATION

None

PART III

ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The responses to this Item are included in Community Capital’s Proxy Statement for the Annual Meeting of Shareholders to be held May 21, 2007 (the “Proxy Statement”), under the following headings, and are incorporated herein by reference.

“Proposal One: Election of Directors;”

“Executive Officers;”

“Section 16(a) Beneficial Ownership Reporting Compliance.”

The Company has a Code of Ethics that applies to the Company’s principal executive, financial and accounting officers. The Code of Business Conduct and Ethics is posted on the Company’s web site at www.comcapbancshares.com. The Company will provide a copy of the Code of Ethics free of charge to any shareholder upon written request to the Company.

There have been no material changes to the procedures by which shareholders may recommend nominees to Community Capital’s board of directors.

ITEM 11.EXECUTIVE COMPENSATION

The responses to this Item are included in the Proxy Statement under the headings “Proposal One: Election of Directors - Meetings and Committees of the Board” and “Compensation,” and are incorporated herein by reference.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The response to this Item is partially included in the Proxy Statement under the headings “Security Ownership of Certain Beneficial Owners” and is incorporated herein by reference.

Changes in Control

The Company knows of no arrangements, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

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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. 2006 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. The Employee Stock Purchase Plan was approved by shareholders on May 15, 2006. 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 to be issued upon exercise of outstanding options and warrants		Weighted-average exercise price of outstanding options and warrants		Number of securities remaining available for future issuance under the equity compensation plans (excluding shares subject to outstanding options)
Equity compensation plans approved by security holders		151,653	$	9.91		72,608
Equity compensation plans not approved by security holders		257,137	$	7.68		7,364
Total		408,790	$	8.51		79,972

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.

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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 nontransferable 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 21,428 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 vested in 20% equal increments over five years beginning on the first anniversary of the grant date and is now fully vested. 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 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 an 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.

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, of which 182,780 were outstanding at December 31, 2006. The warrants are exercisable at $7.00 per share, as adjusted to reflect Community Capital’s 10-for-7 stock split effective in January 2001. The warrants become and are currently fully 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 OCC, Community Capital may be directed to require the directors to exercise or forfeit their warrants.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The responses to this Item are included in the Proxy Statement under the heading “Relationships and Related Transactions” and are incorporated herein by reference.

Director Independence

Each of Bennett D. Cotten, Jr., Glenn A. Dowling, Mary Helen Dykes, Van Cise Knowles, C. Richard Langley, William F. McAfee, Mark M. Shoemaker, Jane Anne Sullivan, John P. Ventulett, Jr., Lawrence B. Willson and James D. Woods are “independent” for the purposes of The Nasdaq Stock Market listing standards. The information regarding the independence of committee members is incorporated herein by reference to the section captioned “Proposal One: Election of Directors - Meetings and Committees of the Board” in the Proxy Statement.

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ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding principal accountant fees and services is incorporated herein by reference to the section captioned “Independent Public Accountants” in the Proxy Statement.

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PART IV

ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) The list of all financial statements is included at Item 8.

(a)(2) The financial statement schedules are either included in the financial statements or are not applicable.

(a)(3) Exhibits are either filed or attached as part of this Annual Report on Form 10-K or incorporated herein by reference.

Exhibit Number	Exhibit
3.1	Articles of Incorporation. (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.)
3.2	Bylaws. (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.)
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. (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.)
4.3	Indenture Agreement. (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.)
4.4	Guarantee Agreement. (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.)
10.3*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Robert E. Lee. (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, 2004 (File no. 000-25345), filed November 15, 2004.)
10.4*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and David C. Guillebeau. (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, 2004 (File no. 000-25345), filed November 15, 2004.)
10.5	Form of Community Capital Bancshares, Inc. Organizers’ Warrant Agreement. (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.)

27

10.6*	Community Capital Bancshares, Inc. Amended and Restated 1998 Stock Incentive Plan. (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.)
10.7*	Form of Community Capital Bancshares, Inc. Incentive Stock Option Award. (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.)
10.8*	Community Capital Bancshares, Inc. 2000 Outside Directors’ Stock Option Plan. (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.)
10.9*	Community Capital Bancshares, Inc. Non-Qualified Stock Option Agreement with Charles Jones, dated November 15, 1999. (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.)
10.10*	Community Capital Bancshares, Inc. Non-Qualified Stock Option Agreement with Richard Bishop, dated April 11, 2000. (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.)
10.11*	First Amendment to the Community Capital Bancshares, Inc. 1998 Stock Incentive Plan. (Incorporated by referece to exhibit of same number in Community Capital's Form 10-KSB (File no. 000-25345), filed March 26, 2002.)
10.12*	First Amendment to the Community Capital Bancshares, Inc. 2000 Outside Directors’ Stock Option Plan. (Incorporated by referece to exhibit of same number in Community Capital's Form 10-KSB (File no. 000-25345), filed March 26, 2002.)
10.13*	Community Capital Bancshares, Inc. Restated Employee Stock Purchase Plan. (Incorporated by referece to exhibit of same number in Community Capital's Form 10-KSB (File no. 000-25345), filed March 26, 2002.)
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. (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.)
10.15*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and David J. Baranko. (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, 2004 (File no. 000-25345), filed November 15, 2004.)

28

10.16*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Paul E. Joiner, Jr. (Incorporated by reference to Community Capital's Current Report on Form 8-K (File no. 000-25345), filed December 7, 2004.)
10.17*	Salary Continuation Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Robert E. Lee. (Incorporated by reference to Community Capital’s Form 10-KSB (000-25345), filed March 30, 2005.)
10.18*	Salary Continuation Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Paul E. Joiner, Jr. (Incorporated by reference to Community Capital’s Form 10-KSB (000-25345), filed March 30, 2005.)
10.19*	Separation Agreement and General Release dated March 30, 2006, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Robert E. Lee.
10.20*	Community Capital Bancshares, Inc. 2006 Employee Stock Purchase Plan (Incorporated by reference to Community Capital’s Form 10-KSB (000-25345) filed April 14, 2006.)
10.21	Separation Proposal dated June 1, 2006 between Community Capital Bancshares, Inc. and Atlantic Holdings, Inc. and its proposed federal savings bank, Atlantic Bank & Trust (in organization). (Incorporated by reference to Community Capital’s Current Report on Form 8-K (File no. 000-25345), filed June 8, 2006.)
10.22	Agreement by and between Albany Bank and Trust, N.A., Albany, Georgia and The Comptroller of the Currency dated July 27, 2006. (Incorporated by reference to Community Capital’s Quarterly Report on Form 10-Q (File no. 000-25345) filed August 14, 2006.)
10.23	Agreement by and between AB&T National Bank, Dothan, Alabama and The Comptroller of the Currency dated July 27, 2006. (Incorporated by reference to Community Capital’s Quarterly Report on Form 10-Q (File no. 000-25345) filed August 14, 2006.)
10.24*	Employment Agreement by and among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and John H. Monk, Jr., dated August 28, 2006. (Incorporated by reference to Community Capital’s Current Report on Form 8-K (File no. 000-25445) filed August 31, 2006.)
10.25*	Employment Agreement by and among AB&T National Bank, Community Capital Bancshares, Inc. and Keith G. Beckham, dated September 21, 2006. (Incorporated by reference to Community Capital’s Current Report on Form 8-K (File no. 000-25445) filed September 29, 2006.)
13.1	Community Capital Bancshares, Inc. 2006 Annual Report to Shareholders. Except with respect to those portions specifically incorporated by reference into this Report, Community Capital’s 2007 Annual Report to Shareholders is not deemed to be filed as part of this Report.
21.1	Subsidiaries of Community Capital Bancshares, Inc.
23.1	Consent of Mauldin & Jenkins, LLC

29

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

30

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/ John H. Monk, Jr.
	John H. Monk, Jr.
	Principal Executive Officer
Date:	April 16, 2007

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 John H. Monk, Jr. and David J. Baranko, 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/ Keith G. Beckham	Director	April 16, 2007
Keith G. Beckham
/s/ Bennett D. Cotten, Jr.	Director	April 16, 2007
Bennett D. Cotten, Jr.
/s/ Glenn A. Dowling	Director	April 16, 2007
Glenn A. Dowling
/s/ Mary Helen Dykes	Director	April 16, 2007
Mary Helen Dykes
/s/ Charles M. Jones, III	Chairman of the Board	April 16, 2007
Charles M. Jones, III

31

/s/ Van Cise Knowles	Director	April 16, 2007
Van Cise Knowles
/s/ C. Richard Langley	Director	April 16, 2007
C. Richard Langley
/s/ William F. McAfee	Director	April 16, 2007
William F. McAfee
/s/ John H. Monk, Jr.	President and Chief Executive Officer, Director	April 16, 2007
John H. Monk, Jr.
/s/ Mark M. Shoemaker	Director	April 16, 2007
Mark M. Shoemaker
/s/ Jane Anne D. Sullivan	Director	April 16, 2007
Jane Anne D. Sullivan
/s/ John P. Ventulett, Jr.	Director	April 16, 2007
John P. Ventulett, Jr.
/s/ Lawrence B. Willson	Director	April 16, 2007
Lawrence B. Willson
/s/ James D. Woods	Director	April 16, 2007
James D. Woods
/s/ David J. Baranko	Chief Financial Officer (Principal Financial and	April 16,2007
David J. Baranko	Accounting Officer)

32

EXHIBIT INDEX

Exhibit Number	Exhibit
3.1	Articles of Incorporation. (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.)
3.2	Bylaws. (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.)
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. (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.)
4.3	Indenture Agreement. (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.)
4.4	Guarantee Agreement. (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.)
10.3*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Robert E. Lee. (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, 2004 (File no. 000-25345), filed November 15, 2004.)
10.4*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and David C. Guillebeau. (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, 2004 (File no. 000-25345), filed November 15, 2004.)
10.5	Form of Community Capital Bancshares, Inc. Organizers’ Warrant Agreement. (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.)

10.6* Community Capital Bancshares, Inc. Amended and Restated 1998 Stock Incentive Plan. (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.)

33

10.7*	Form of Community Capital Bancshares, Inc. Incentive Stock Option Award. (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.)
10.8*	Community Capital Bancshares, Inc. 2000 Outside Directors’ Stock Option Plan. (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.)
10.9*	Community Capital Bancshares, Inc. Non-Qualified Stock Option Agreement with Charles Jones, dated November 15, 1999. (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.)
10.10*	Community Capital Bancshares, Inc. Non-Qualified Stock Option Agreement with Richard Bishop, dated April 11, 2000. (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.)
10.11*	First Amendment to the Community Capital Bancshares, Inc. 1998 Stock Incentive Plan. (Incorporated by referece to exhibit of same number in Community Capital's Form 10-KSB (File no. 000-25345), filed March 26, 2002.)
10.12*	First Amendment to the Community Capital Bancshares, Inc. 2000 Outside Directors’ Stock Option Plan. (Incorporated by referece to exhibit of same number in Community Capital's Form 10-KSB (File no. 000-25345), filed March 26, 2002.)
10.13*	Community Capital Bancshares, Inc. Restated Employee Stock Purchase Plan. (Incorporated by referece to exhibit of same number in Community Capital's Form 10-KSB (File no. 000-25345), filed March 26, 2002.)
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. (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.)
10.15*	Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and David J. Baranko. (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, 2004 (File no. 000-25345), filed November 15, 2004.)

10.16* Employment Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Paul E. Joiner, Jr. (Incorporated by reference to Community Capital's Current Report on Form 8-K (File no. 000-25345), filed December 7, 2004.)

34

10.17*	Salary Continuation Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Robert E. Lee. (Incorporated by reference to Community Capital’s Form 10-KSB (000-25345), filed March 30, 2005.)
10.18*	Salary Continuation Agreement dated September 13, 2004, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Paul E. Joiner, Jr. (Incorporated by reference to Community Capital’s Form 10-KSB (000-25345), filed March 30, 2005.)
10.19*	Separation Agreement and General Release dated March 30, 2006, among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and Robert E. Lee.
10.20*	Community Capital Bancshares, Inc. 2006 Employee Stock Purchase Plan (Incorporated by reference to Community Capital’s Form 10-KSB (000-25345) filed April 14, 2006.)
10.21	Separation Proposal dated June 1, 2006 between Community Capital Bancshares, Inc. and Atlantic Holdings, Inc. and its proposed federal savings bank, Atlantic Bank & Trust (in organization). (Incorporated by reference to Community Capital’s Current Report on Form 8-K (File no. 000-25345), filed June 8, 2006.)
10.22	Agreement by and between Albany Bank and Trust, N.A., Albany, Georgia and The Comptroller of the Currency dated July 27, 2006. (Incorporated by reference to Community Capital’s Quarterly Report on Form 10-Q (File no. 000-25345) filed August 14, 2006.)
10.23	Agreement by and between AB&T National Bank, Dothan, Alabama and The Comptroller of the Currency dated July 27, 2006. (Incorporated by reference to Community Capital’s Quarterly Report on Form 10-Q (File no. 000-25345) filed August 14, 2006.)
10.24*	Employment Agreement by and among Albany Bank & Trust, N.A., Community Capital Bancshares, Inc. and John H. Monk, Jr., dated August 28, 2006. (Incorporated by reference to Community Capital’s Current Report on Form 8-K (File no. 000-25445) filed August 31, 2006.)
10.25*	Employment Agreement by and among AB&T National Bank, Community Capital Bancshares, Inc. and Keith G. Beckham, dated September 21, 2006. (Incorporated by reference to Community Capital’s Current Report on Form 8-K (File no. 000-25445) filed September 29, 2006.)
13.1	Community Capital Bancshares, Inc. 2006 Annual Report to Shareholders. Except with respect to those portions specifically incorporated by reference into this Report, Community Capital’s 2007 Annual Report to Shareholders is not deemed to be filed as part of this Report.
21.1	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-K).

35

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.

 36

EX-13.1

Exhibit 13.1

LETTER FROM THE PRESIDENT

Community Capital Bancshares, Inc. experienced significant changes in 2006; from changes in our strategic focus to changes in our executive management team. During the year, we shifted our focus from expanding our presence in the Charleston, South Carolina area to focusing on our core business and customer bases in the Albany, Dothan and Auburn markets. In addition, we have focused on increasing capital ratios by reducing assets and restraining growth during the year. The year was also marked by the selection of a new President and Chief Executive Officer and other key management changes.

Your Company’s net income was $424,000, or $0.14 per share, for 2006. This compares to $113,000, or $0.04 per share, for the prior year. Total assets were $296.9 million at the year-end of 2006, which was a decrease of $12.5 million from 2005. Under the Formal Agreements with the OCC, each of the subsidiary Banks agreed to maintain higher capital-to-asset ratios. As a result, during the last half of 2006, the Company reduced its asset size through the sales of loan participations and investment securities and restricted its asset growth in order to strengthen each bank’s capital position.

Our management team is looking forward to the coming year. During 2007, our focus is to increase profitability without significantly increasing our earning asset base. In other words, profitability and return on equity are our primary objectives. Our strategy is to increase our activities in the markets of Auburn and Dothan, Alabama as we exit the Charleston market.

We must never forget you, the shareholder, who brought us here and our customers, who continue to support our company. We thank you for your continuous support of Community Capital Bancshares, Inc.

Sincerely,

/s/ John H. Monk, Jr.                         

John H. Monk, Jr.

President & Chief Executive Officer

Community Capital Bancshares, Inc.

Annual Report

Table of Contents

	Page
Management’s discussion and analysis of financial condition and results of operations	1
Selected financial information and statistical data	10
Corporate Information	17
Performance Graph	18
Report of Independent Registered Public Accounting Firm	19
FINANCIAL STATEMENTS
Consolidated balance sheets	21
Consolidated statements of income	22
Consolidated statements of comprehensive income	23
Consolidated statements of stockholders’ equity	24
Consolidated statements of cash flows	26
Notes to consolidated financial statements	27
Directors and Officers	51

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

The following is a discussion of the financial condition of Community Capital Bancshares, Inc. (“the Company”), its banking subsidiaries, Albany Bank & Trust N. A. and AB&T National Bank, N.A.(collectively, the “Banks”), and its Community Capital Statutory Trust I, Community Capital Technology Services, Inc. and Community Aviation, LLC subsidiaries at December 31, 2006 and 2005 and the results of their operations for the years 2006, 2005 and 2004. The purpose of this discussion is to focus on information about the Company’s financial condition and results of operations which are not otherwise apparent from the audited consolidated financial statements. Reference should be made to those statements and the selected financial data presented elsewhere in this report for an understanding of the following discussion and analysis.

Forward-Looking Statements

The Company may from time to time make written or oral forward-looking statements, including statements contained in the Company’s filings with the Securities and Exchange Commission and its reports to stockholders. Statements made in the Annual Report, other than those concerning historical information, should be considered forward-looking and subject to various risks and uncertainties. Such forward-looking statements are made based upon management’s belief as well as assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The Company’s actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors, including governmental monetary and fiscal policies, deposit levels, loan demand, loan collateral values, securities portfolio values, interest rate risk management; the effects of competition in the banking business from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market funds and other financial institutions operating in the Company’s market area and elsewhere, including institutions operating through the Internet, changes in governmental regulation relating to the banking industry, including regulations relating to branching and acquisitions, failure of assumptions underlying the establishment of reserves for loan losses, including the value of collateral underlying delinquent loans and other factors. The Company cautions that such factors are not exclusive. The Company does not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company.

For other factors, risks and uncertainties that could cause our actual results to differ materially from estimates and projections contained in these forward-looking statements, please read the “Risk Factors” section of our report on Form 10-K for the year ended December 31, 2006.

Overview

Net income for 2006 was $424,000 as compared to the prior year amount of $113,000, representing an increase in net income of $311,000. Net income before taxes increased $667,000 to $711,000. The Company recorded a provision for taxes of $286,000 in 2006 compared to a tax benefit of $69,000 in 2005. Basic earnings per share increased in the current year to $0.14 from the 2005 amount of $0.04.

Total assets decreased during the year by $12,521,000 or 4%. During the third quarter of 2006, the Company reduced its asset size through the sale of loan participations of approximately $12 million and investment securities of approximately $3 million and restricted asset growth in order to strengthen the Banks’ ratios of Tier 1 capital to risk-weighted assets and adjusted total assets, as required by the Banks’ Formal Agreements with the Office of the Comptroller of the Currency (“OCC”), which are described below.

In July, 2006, each of the Banks entered into a formal Agreement with the OCC (the “OCC Agreements). Under the OCC Agreements, the Banks agreed to maintain higher capital levels and to review the responsibilities of the CEO, President, Senior Loan Officer and other management positions of the Banks to ensure that appropriate management was in place to comply with all laws and manage the day-to-day operations of the Banks. The Banks also committed to improve their records and management information systems, information technology systems, reduce their credit risk, and review and enhance their lending policies and systems with regard to credit and collateral documentation, loan review procedures, and overall loan portfolio management. Under its OCC Agreement, Albany Bank & Trust also will review and enhance its internal controls and its conflict of interest policy and overdraft policy, and will improve its record keeping process for transactions with insiders. The OCC Agreements include additional commitments regarding strategic planning, allowances for loan and lease losses, interest rate risk, liquidity, internal audit, each Bank’s investments, and each Bank’s transactions with its affiliates, including Community Capital Bancshares, Inc. Management and the Boards of Directors of the Banks are making monthly progress reports to the OCC.

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Additionally, in June 2006, the Company announced that it would not pursue the formation of a new thrift or other future expansion in the Charleston, South Carolina market. As a result, the Company began to restrict its loan growth in Charleston during the third quarter of 2006. Additionally, of the loan participations sold by the Company during the third quarter of 2006, $9 million represented loans originated or secured by real estate located in Charleston and surrounding counties in South Carolina.

The Company has also entered into a separation agreement with Atlantic Bank Holdings, Inc. and Atlantic Bank & Trust (collectively “Atlantic”) regarding the Company’s withdrawal from the Charleston market. After the Company’s withdrawal of its application with the Office of Thrift Supervision for a federal thrift charter to be located in Charleston, Atlantic filed independent applications for a thrift charter and deposit insurance for the Charleston thrift. Under the separation agreement, the Company maintained its loan production office in Charleston until November 30, 2006. The individual organizers of Atlantic continued to operate the loan production office as employees of the Company while they pursued the organization of Atlantic. Atlantic agreed to pay the Company $44,000 per month beginning June 1, 2006 through November 30, 2006 for advisory, rent and information technology fees. The separation agreement also provided for the sale of the Company’s building located at 152 East Bay Street, Charleston, South Carolina to Atlantic at a price equal to no less than $1,825,000. The sale of this building and other fixed assets to Atlantic is scheduled to occur during of the second quarter of 2007.

Financial Condition at December 31, 2006 and 2005

Following is a summary of the Company’s balance sheets as of December 31, 2006 and 2005.

		December 31,
		2006		2005
	(Dollars in Thousands)
Cash and due from banks, including interest-bearing deposits of $214 and $73	$	7,408	$	6,931
Federal funds sold		6,400		8,671
Securities available for sale		36,524		41,690
Restricted equity securities		2,434		2,426
Loans, net		220,123		227,908
Premises and equipment		6,758		7,892
Premises and equipment held for sale		3,022		—
Other assets		14,267		13,939
	$	296,936	$	309,457
Total deposits	$	237,553	$	245,569
Other borrowings		27,000		33,000
Guaranteed preferred benefits in junior subordinated debentures		4,124		4,124
Other liabilities		1,467		1,369
Stockholders’ equity		26,792		25,395
	$	296,936	$	309,457

Financial Condition at December 31, 2006 and 2005

As of December 31, 2006 the Company had total assets of $296.9 million, a decrease of $12.5 million from the previous year end. Net loans decreased $7.8 million during the year ended December 31, 2006, to $220.1 million and investment securities decreased $5.1 million during the year ended 2006 to $36.5 million. The Company reduced total assets through the sale of loan participations of $12 million and investment securities of $3 million in order to increase the Banks’ ratio of Tier 1 capital to risk-weighted assets and total adjusted assets, as required by the OCC Agreements. The Company expects that loan growth in 2007, will be controlled to generate high quality loans and allow the Banks to remain within the capital limits of the OCC Agreements. Decreased deposits of $8.0 million and Federal Home Loan Bank (“FHLB”) borrowings of $6 million accounted for the majority of the decreased funding of total assets in 2006.

As of December 31, 2005, the Company had total assets of $309.5 million, an increase of $114.2 million from the previous year end. Increased deposits of $106.5 million and FHLB borrowings of $7.8 million funded the majority of the increase in total assets in 2005. The primary use of these funds was to fund loan growth. Net loans increased $102.2 million during the year ended December 31, 2005 to $227.9 million. A portion of the loan growth was also funded by an $828,000 decrease in the investment portfolio as the Company reallocated assets to a higher earning category.

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The Company’s investment portfolio, consisting primarily of Federal Agency bonds and mortgage backed securities, amounted to $36.5 million at December 31, 2006, as compared to the December 31, 2005 amount of $41.7 million. All securities are classified as available for sale and carried at current market values except for restricted equity securities, which are carried at cost.

The Company has 60% of its loan portfolio collateralized by real estate located in the Company’s primary market area of Dougherty County and surrounding counties in Georgia, and Houston, Lee and surrounding counties in Alabama. The Company’s real estate mortgage and construction portfolio consists of loans collateralized by one- to four-family residential properties (42%) and construction loans to build one- to four-family residential properties (16%), and nonresidential and multi-family properties consisting primarily of small business commercial, agricultural and rental properties (22%). The Company generally requires that loans collateralized by real estate not exceed the collateral values by the following percentages for each type of real estate loan as listed below:

One- to four-family residential properties	90	%
Construction loans on one- to four-family residential properties	85	%
Nonresidential and multi-family properties	85	%

The remaining 20% of the Company’s loan portfolio consists of commercial, consumer, and other loans. The Company requires collateral commensurate with the repayment ability and creditworthiness of the borrower.

The specific economic and credit risks associated with the Company’s loan portfolio, especially the real estate portfolio, include, but are not limited to, a general downturn in the economy which could affect unemployment rates in the Company’s market area, general real estate market deterioration, interest rate fluctuations, deteriorated or non-existing collateral, title defects, inaccurate appraisals, financial deterioration of borrowers, fraud, and any violation of banking protection laws. Construction lending can also present other specific risks to the lender such as whether developers can find builders to buy lots for home construction, whether the builders can obtain financing for the construction, whether the builders can sell the home to a buyer, and whether the buyer can obtain permanent financing. Currently, real estate values and employment trends in the Albany, Dothan and Auburn market areas are stable with no indications of a significant downturn in the general economy.

The Company attempts to reduce these economic and credit risks not only by adherence to loan to value guidelines, but also by investigating the creditworthiness of the borrower and monitoring the borrower’s financial position. Also, the Company establishes and periodically reviews its lending policies and procedures. Banking regulations limit exposure by prohibiting loan relationships that exceed 15% of the Bank’s statutory capital in the case of loans which are not fully secured by readily marketable or other permissible types of collateral.

Liquidity and Capital Resources

The purpose of liquidity management is to ensure that there are sufficient cash flows to satisfy demands for credit, deposit withdrawals, and other needs of the Company. Traditional sources of liquidity include asset maturities and growth in core deposits. A company may achieve its desired liquidity objectives from the management of assets and liabilities and through funds provided by operations. Funds invested in short-term marketable instruments and the continuous maturing of other earning assets are sources of liquidity from the asset perspective. The liability base provides sources of liquidity through deposit growth, the maturity structure of liabilities, and accessibility to market sources of funds.

Scheduled loan payments are a relatively stable source of funds, but loan payoffs and deposit flows fluctuate significantly because they are influenced by interest rates and general economic conditions and competition. The Company attempts to price its deposits to meet its asset/liability objectives consistent with local market conditions.

State and federal regulatory authorities monitor the liquidity and capital resources of the Company on a periodic basis. Under the OCC Agreements, the Banks were required to increase liquidity, which was accomplished by selling assets, and to review liquidity on a monthly basis. Management of the Company believes that its current liquidity position is satisfactory.

At December 31, 2006, the Company had loan commitments and standby letters of credit outstanding of $59.0 million, compared to $72.7 million in 2005. Since these commitments generally have fixed expiration dates and many will expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. If needed, the Banks have the ability to borrow funds on a short-term basis and purchase federal funds from other financial institutions. At December 31, 2006, the Banks had arrangements with correspondent banks for short-term advances of $7.8 million.

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During 2006, total stockholders’ equity increased $1.4 million to $26.8 million as of December 31, 2006, compared to $25.4 million as of December 31, 2005. The increase in stockholders’ equity during 2006 was due to an increase of $185,000 in earnings retained, $277,000 from unrealized net gains on securities available for sale and $68,000 from sale of treasury stock, $166,000 related to stock-based compensation, and $706,000 from exercise of stock warrants and stock options. Total stockholders’ equity decreased by a net amount of $437,000 during 2005. During 2005, total stockholders’ equity decreased $120,000 from earnings retained, $14,000 from treasury stock transactions, and $517,000 in unrealized net losses on securities available for sale, which was offset by $214,000 from the exercise of stock warrants and stock options.

The primary source of funds available to the Company is the payment of dividends to the Company by its subsidiary Banks. Banking regulations limit the amount of the dividends that may be paid by the Banks to the Company without prior approval of the regulatory agencies. Under the OCC Agreements, no dividends can be paid by the Banks to the Company without prior regulatory approval.

The minimum regulatory capital requirements and the actual capital ratios for the Company and the Banks as of December 31, 2006 are as follows:

	The Company Actual	Albany Bank & Trust Actual	AB&T National Bank Actual	Regulatory Requirements
Leverage capital ratio	9.37%	8.53%	8.54%	4.00%
Risk-based capital ratios:
Core capital	13.61%	12.50%	12.04%	4.00%
Total capital	14.88%	13.76%	13.31%	8.00%

These ratios may decline somewhat if assets were to grow, but will still remain in excess of the regulatory minimum requirements. In order to comply with the OCC Agreements, the Banks have to maintain a minimum 8% leverage capital ratio and a minimum 11% Core capital ratio.

Management believes that its liquidity and capital resources are adequate and will meet its foreseeable short and long-term needs. Management anticipates that it will have sufficient funds available to meet current loan commitments and to fund or refinance, on a timely basis, its other material commitments and liabilities.

Except for the withdrawal from the Charleston market and the efforts to comply with the OCC Agreements, management is not aware of any other known trends, events or uncertainties that will have or that are reasonably likely to have a material effect on its liquidity, capital resources or operations. Management is also not aware of any additional recommendations by the regulatory authorities which, if they were implemented, would have such an effect.

Effects of Inflation

The impact of inflation on banks differs from its impact on non-financial institutions. Banks, as financial intermediaries, have assets which are primarily monetary in nature and which tend to fluctuate in concert with inflation. A bank can reduce the impact of inflation if it can manage its rate sensitivity gap. This gap represents the difference between rate sensitive assets and rate sensitive liabilities. The Company, through its Asset/Liability committee, attempts to structure the assets and liabilities and manage the rate sensitivity gap, thereby seeking to minimize the potential effects of inflation. For information on the management of the Company’s interest rate sensitive assets and liabilities, see the “Asset/Liability Management” section.

4

Results of Operationsfor the Years Ended December 31, 2006, 2005 and 2004

Following is a summary of the Company’s operations for the periods indicated.

	Year Ended December 31,
	2006		2005			2004
	(Dollars in Thousands)
Interest income	$	23,035	$	14,882		$	9,412
Interest expense		11,590		6,085			3,046
Net interest income		11,445		8,797			6,366
Provision for loan losses		2,852		2,276			65
Other income		2,782		1,421			1,457
Other expenses		10,665		7,898			6,507
Pretax income		710		44			1,251
Income tax expense (benefit)		286		(69	)		395
Net income	$	424	$	113		$	856

Net income for 2006 was $424,000 as compared to the 2005 amount of $113,000 representing an increase of $311,000. Income taxes increased $355,000 to $286,000 in 2006. Pretax income increased $666,000 in 2006 to $710,000

For the year ended December 31, 2005, the Company realized earnings of $113,000 as compared to $856,000 for the prior year representing a decrease of $743,000. In 2005, the Company reported pretax income of $44,000 compared to pretax income of $1,251,000 in 2004, representing a decrease of $1,207,000 in pretax income for 2005.

Net Interest Income

The Company’s results of operations are determined by its ability to effectively manage interest income and expense, to minimize loan and investment losses, to generate noninterest income, and to control operating expenses. Since interest rates are determined by market forces and economic conditions beyond the control of the Company, its ability to generate net interest income is dependent upon its ability to obtain an adequate net interest spread between the rate paid on interest-bearing liabilities and the rate earned on interest-earning assets.

The yield on average interest-earning assets during 2006 was 7.68% compared to the 2005 level of 6.59%. The rates paid on average interest-bearing liabilities increased during the current year from the 2005 rate of 3.02% to 4.22%. The interest rate spread, which is the difference between the yield on earning assets and the cost of paying interest on liabilities, decreased 11 basis points to 3.46% in 2006 as compared to 3.57% 2005. The net interest margin, which is net interest income divided by average earning assets, decreased by 8 basis points in 2006. Management expects the net margin to remain near its current level during 2007. Net interest income for the year increased $2.6 million to $11.4 million in 2006 compared to $8.8 million in 2005. This increase was due primarily to an increase in the average volume of interest-earning assets. Average interest-earning assets increased $74.1 million to $299.9 million in 2006 compared to $225.8 million in 2005. The most significant increase in average interest-earning assets was in loans which increased $74.1 million to $250.5 million in 2006 compared to $176.3 million in 2005.

For the year ended December 31, 2005, the net interest margin decreased 18 basis points to 3.90% as compared to 4.08% in 2004. The yield on earning assets increased to 6.59% in 2005 from 6.03% in 2004. The cost of interest-bearing liabilities increased to 3.02% in 2005 from 2.16% in 2004.

Provision for Loan Losses

The provision for loan losses was $2,852,000 in 2006 as compared to $2,276,000 in 2005. The annual provision is based upon management’s evaluation of the loan portfolio. At December 31, 2006, the allowance for loan losses was $5.5 million or 2.44% of total outstanding loans. During the latter part of 2006 and through the first quarter of 2007, continuing reviews of the loan portfolio indicated weakness in several real estate based loans. Accordingly, the provision for loan losses was increased by $1.8 million to reflect the deterioration of these loans. The majority of this adjustment was due to a small number of loans having an aggregate principal balance less than $20 million. Management believes the allowance for loan losses is adequate to absorb possible losses on existing loans that may become uncollectible. This evaluation considers past due and classified loans, underlying collateral values, updated financial information and current economic conditions which may affect the borrower’s ability to repay. As of December 31, 2006, the Company had $641,000 in non-performing loans.

5

The provision for loan losses was $2,276,000 for the year ended December 31, 2005 as compared to $65,000 in 2004. The provision for loan losses is based upon management’s evaluation of the loan portfolio. At December 31, 2005, the allowance for loan losses was $3.0 million or 1.30% of total outstanding loans. During management’s normal review of the loan loss reserve in the fourth quarter of 2005, management determined that the Banks had a high percentage of loans secured by commercial and residential real estate. Based upon this information and the high level of growth in the portfolio during the year, management concluded that additional reserves were needed for these loans. Accordingly, an additional allowance was recorded to insure that there were sufficient amounts available for any potential future losses. It was determined that there were serious doubts as to the collectibility of the loans of two relationships. Based upon this information, the relationships were charged off. This charge-off resulted in a decrease to the allowance of $427,000 which had to be replenished. Management believes the allowance for loan losses is adequate to absorb possible losses on existing loans that may become uncollectible. This evaluation considers past due and classified loans, underlying collateral values, and current economic conditions which may affect the borrower’s ability to repay. As of December 31, 2005, the Company had $37,000 in non-performing loans.

Noninterest Income

Noninterest income consists of service charges on deposit accounts and other miscellaneous revenues and fees. During 2006, noninterest income increased $1,361,000 to $2,782,000 for the year ended December 31, 2006. Service charges on deposit accounts increased $206,000 during 2006. This increase in deposit fee income resulted from the growth in the deposit accounts during the year. The Banks offer other services to its customers which generate fee income such as the rental of safe deposit boxes, issuance of official checks, issuance of credit life insurance and merchant clearing services. Losses on sales of investment securities decreased $723,000, which accounted for a majority of the increase in noninterest income. In 2006, the Company received $254,000 in advisory fees from Atlantic under the terms of the separation agreement discussed above, whereas no such fees were received in 2005. Debit card fee income increased $49,000 in 2006 as compared to the prior year. The Company also provides customers with long term mortgage loans. These loans are funded by third party originators. The fees in this area increased $336,000 in 2006 to $901,000 due to the increased volume from the Charleston market during the year.

In 2005, noninterest income decreased $36,000 to $1,421,000 compared to the 2004 amount of $1,457,000. Service charges on deposit accounts increased by $121,000 to $1,038,000. Earnings from bank owned life insurance increased $102,000 in 2005 to $242,000 as compared to $140,000 in 2004. Financial Services generated $212,000 in fees during 2005, as compared to $89,000 in 2004. Additionally, mortgage fee income increased $392,000 to $565,000 from $173,000 in 2004 as a result of the increased volume from the Charleston market. These increases were offset by a loss of $775,000 on the sale of an investment in an equity fund in 2005.

Noninterest Expense

Noninterest expense for 2006 was $10,665,000 as compared to the 2005 amount of $7,898,000, representing an increase of $2,767,000 or 35%. Salaries and employee benefits comprised $1,847,000 of the increase. Of the salaries and employee benefits increase, the Charleston loan production office accounted for $1,117,000 due to increased staffing levels and operating the Charleston office for 11 months 2006 as compared to a partial year in 2005. The Company also recorded an expense of $265,000 in 2006 for a severance package for the Company’s former president. Administrative expenses increased $485,000 in 2006 over the prior year amount, represented primarily by an increase in consulting expenses of $367,000 of which $50,000 was attributable to compliance with the OCC Agreements. Legal and professional expenses increased $205,000 over the prior year amount. This increase was a result of legal fees for assistance in responding to regulatory and other legal matters. Management monitors noninterest expense on a regular basis and makes every attempt to maintain these expenses at the lowest possible levels.

In 2005, noninterest expense increased $1,391,000 to $7,898,000 from the prior year amount of $6,507,000. The majority of the increase was due to increased staffing levels and additional banking locations. Salaries and employee benefits comprised $529,000 of the increase, while equipment and occupancy expenses increased $269,000 over 2004.

Income Tax

Income tax expense for the current year was $286,000 compared to an income tax benefit of $69,000 in the previous year. The effective rate of tax on pretax income was 40% in 2006.

An income tax benefit of $69,000 was generated in 2005 as compared to income tax expense of $395,000 for 2004.

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Critical Accounting Policies

The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America and to general practices within the banking industry. The following is a description of the accounting policies applied by the Company which are deemed “critical”. Critical accounting policies are defined as policies that are very important to the presentation of the Company’s financial condition and results of operations, and that require managements most difficult, subjective, or complex judgments. The Company’s financial results could differ significantly if different judgments or estimates are applied in the application of the policies.

Allowance for Loan Losses

The allowance for loan losses is established through provisions for loan losses charged to operations. Loans are charged against the allowance for loan losses when management believes that the collection of principal is unlikely. Subsequent recoveries are added to the allowance. Management’s evaluation of the adequacy of the allowance for loan losses is based on a formal analysis that assesses the risk within the loan portfolio. This analysis includes consideration of historical performance, current economic conditions, the level of nonperforming loans, loan concentrations, and review of certain individual loans.

Management believes that the current allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance for loan losses may be necessary based on changes in economic conditions. In addition, the regulatory agencies, as an integral part of their examination process, periodically review the subsidiary Banks’ allowance for loan losses. Such agencies may require the Bank to recognize additions to the allowance for loan losses based on their judgments about information available to them at the time of their examination.

Considering current information and events regarding a borrower’s ability to repay its obligations, management considers a loan to be impaired when the ultimate collectibility of all amounts due, according to the contractual terms of the loan agreement is in doubt. When a loan is impaired, the amount of impairment is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate. If the loan is collateral-dependent, the fair value of the collateral is used to determine the amount of impairment. Impairment losses are included in the allowance for loan losses through a charge to the provision for loan losses.

Subsequent recoveries are credited to the allowance for loan losses. Cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreement. Cash receipts on impaired loans for which the accrual of interest has been discontinued are applied first to principal then to interest income.

The accounting for impaired loans described above applies to all loans, except for large pools of smaller-balance, homogeneous loans that are collectively evaluated for impairment, loans that are measured at fair value or the lower of cost or fair value, and debt securities. The allowance for loan losses for large pools of smaller-balance, homogeneous loans is established through consideration of such factors as changes in the nature and volume of the portfolio, overall portfolio quality, adequacy of the underlying collateral, loan concentrations, historical charge-off trends, and economic conditions that may affect the borrowers’ ability to pay.

Certain economic and interest rate factors could have a material impact on the determination of the allowance for loan losses. For instance, if the Federal Reserve lowered short term interest rates, lower rates would be earned on assets as loans are refinanced to lower current rates. The local economy may also operate independent of the overall national economy. While the national economy may be in a growth mode, local economic factors such as plant or military base closings, or layoffs at local manufacturers could place our local economies in a recessionary environment, thereby affecting our customers’ ability to repay loans.

Another factor that we have considered in the determination of the allowance for loan losses is the concentration in individual borrowers or industries. At December 31, 2006, the Company had 119 individual loan relationships that each exceeded $1 million, of which 26 exceeded $2 million.

A substantial portion of the loan portfolio is in the residential and commercial real estate sectors. Those loans are secured by real estate in the Albany, Dothan, Auburn and Charleston market areas. All of the other real estate owned is also located in those same markets. Therefore, the ultimate collectibility of a substantial portion of our loan portfolio and the recovery of a substantial portion of the carrying amount of other real estate owned are susceptible to changes in market conditions in the Company’s primary market areas.

The Company also monitors its exposure in the loan portfolio based upon industry classifications of its customers. At the present time, the dispersion of loans among different industries is such that there is no significant exposure to the Company in one particular industry. The composition of the loan portfolio is monitored by management and should it be determined that there is an exposure to the Company due to one particular industry, loans made to customers in that industry would be monitored more closely and appropriate adjustments made to the allowance for loan losses.

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Income Taxes

SFAS No. 109, “Accounting for Income taxes,” requires the asset and liability approach for financial accounting and reporting for deferred income taxes. The Company uses the asset and liability method of accounting for deferred income taxes and provides deferred income taxes for all significant income tax temporary differences. Note 11 in Notes to the Consolidated Financial Statements provides additional details concerning deferred income taxes.

As part of the process of preparing the consolidated financial statements, the Company is required to estimate the income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax exposure together with assessing temporary differences resulting from differing treatment of items such as depreciation and the provision for loan losses for tax and financial reporting purposes. These timing differences result in deferred tax assets and liabilities that are included in our consolidated balance sheet.

Management must also assess the likelihood that the deferred tax assets will be recovered from future taxable income. To the extent that this is determined unlikely, a valuation allowance must be established. Significant management judgment is required in determining the provision for income taxes, the deferred tax assets and liabilities, and any valuation allowance required for net deferred tax assets. If a valuation allowance is established or adjusted during a period, the appropriate expense is recorded in the tax provision in the income statement.

Long-Lived Assets, Including Intangibles

We evaluate long-lived assets, such as property and equipment, specifically identifiable intangibles and goodwill, when events or changes in circumstances indicate that the carrying value of such assets might not be recoverable. Factors that could trigger an impairment include significant underperformance relative to historical or projected future operating results, significant changes in the manner of our use of the acquired assets and significant negative industry or economic trends.

The determination of whether an impairment has occurred is based on an estimate of undiscounted cash flows attributable to the assets as compared to the carrying value of the assets. If an impairment has occurred, the amount of the impairment loss recognized would be determined by estimating the fair value of the assets and recording a loss if the fair value was less than the book value.

In determining the existence of impairment factors, our assessment is based on market conditions, operational performance and legal factors of our Company and its subsidiary banks. Our review of factors present and the resulting appropriate carrying value of our goodwill, intangibles, and other long-lived assets are subject to judgments and estimates that management is required to make. Future events could cause us to conclude that impairment indicators exist and that our goodwill, intangibles and other long-lived assets might be impaired.

Asset/Liability Management

The Company’s objective is to manage assets and liabilities to provide a satisfactory, consistent level of profitability within the framework of established cash, loan, investment, borrowing, and capital policies. Certain officers are charged with the responsibility for monitoring policies and procedures that are designed to ensure acceptable composition of the asset/liability mix. It is the overall philosophy of management to support asset growth primarily through growth of core deposits of all categories made by local individuals, partnerships, and corporations.

To monitor the Company’s asset/liability mix the Banks’ Boards of Directors reviews reports reflecting the interest rate-sensitive assets and interest rate-sensitive liabilities of the Banks on a quarterly basis. The objective of this policy is to monitor interest rate-sensitive assets and liabilities so as to minimize the impact of substantial movements in interest rates on earnings. An asset or liability is considered to be interest rate-sensitive if it will reprice or mature within the time period analyzed, usually one year or less. The interest rate-sensitivity gap is the difference between the interest-earning assets and interest-bearing liabilities scheduled to mature or reprice within such time period. A gap is considered positive when the amount of interest rate-sensitive assets exceeds the amount of interest rate-sensitive liabilities. A gap is considered negative when the amount of interest rate-sensitive liabilities exceeds the interest rate-sensitive assets. During a period of rising interest rates, a negative gap would tend to adversely affect net interest income, while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income, while a positive gap would tend to adversely affect net interest income. If the Company’s assets and liabilities were equally flexible and moved concurrently, the impact of any increase or decrease in interest rates on net interest income would be minimal.

A simple interest rate “gap” analysis by itself may not be an accurate indicator of how net interest income will be affected by changes in interest rates. Accordingly, the Company also evaluates how the repayment of particular assets and liabilities is impacted by changes in interest rates. Income associated with interest-earning assets and costs associated with interest-bearing liabilities may not be affected uniformly by changes in interest rates. In addition, the magnitude and duration of changes in interest rates may have a significant impact on net interest income. For example, although certain assets and liabilities may have similar maturities or periods of repricing, they may react in different degrees to changes in market interest rates. Interest rates on certain types of assets and liabilities fluctuate in advance of changes in general market rates, while interest rates on other types may lag behind changes in general market rates. In addition, certain assets, such as adjustable rate mortgage loans, have features (generally referred to as “interest rate caps and floors”) which limit changes in interest rates. Prepayment and early withdrawal levels also could deviate significantly from those assumed in calculating the interest rate gap. The ability of many borrowers to service their debts also may decrease during periods of rising interest rates.

8

Changes in interest rates also affect the Company’s liquidity position. The Company currently prices deposits in response to market rates and it is management’s intention to continue this policy. If deposits are not priced in response to market rates, a loss of deposits could occur which would negatively affect the Company’s liquidity position.

At December 31, 2006, the Company’s cumulative one-year interest rate-sensitivity gap ratio was .89%. The Company’s targeted ratio is 80% to 120% in this time horizon. This indicates that the Company’s interest-earning liabilities will reprice during this period at a slightly faster rate than its interest-bearing assets. The Company has a substantial amount of certificates of deposit repricing in the first half of 2007. It is management’s belief that as long as it pays the prevailing market rate on these type deposits, the Company’s liquidity, while not assured, will not be negatively affected.

The following table sets forth the distribution of the repricing of the Company’s interest-earning assets and interest-bearing liabilities as of December 31, 2006, the interest rate-sensitivity gap, the cumulative interest rate-sensitivity gap, the interest rate-sensitivity gap ratio and the cumulative interest rate-sensitivity gap ratio. The table also sets forth the time periods in which earning assets and liabilities will mature or may reprice in accordance with their contractual terms. However, the table does not necessarily indicate the impact of general interest rate movements on the net interest margin since the repricing of various categories of assets and liabilities is subject to competitive pressures and the needs of the Company’s customers. In addition, various assets and liabilities indicated as repricing within the same period may in fact, reprice at different times within such period and at different rates.

	At December 31, 2006
	Maturing or Repricing Within
	Zero to Three Months		Three Months to One Year			One to Three Years			Over Three Years		Total
	(Dollars in Thousands)
Earning assets:
Interest-bearing deposits in banks	$	214	$	—		$	—		$	—	$	214
Federal funds sold		6,400		—			—			—		6,400
Investment securities		496		2,473			13,640			22,349		38,958
Loans		140,487		14,847			39,582			30,715		225,631
		147,597		17,320			53,222			53,064		271,203
Interest-bearing liabilities:
Interest-bearing demand deposits (1)		35,736		—			15,170			—		50,906
Savings (1)		—		—			10,335			—		10,335
Certificates less than $100,000		14,115		30,145			13,871			1,723		59,854
Certificates, $100,000 and over		31,822		52,657			8,114			4,384		96,977
Guaranteed preferred beneficial interests
in junior subordinated debentures		4,124		—			—			—		4,124
Other borrowings		—		17,000			10,000			—		27,000
		85,797		99,802			57,490			6,107		249,196
Interest rate sensitivity gap	$	61,800	$	(82,482	)	$	(4,268	)	$	46,957	$	22,007
Cumulative interest rate sensitivity gap	$	61,800	$	(20,682	)	$	(24,950	)	$	22,007
Interest rate sensitivity gap ratio		1.72		.17			.93			8.69
Cumulative interest rate sensitivity gap ratio		1.72		.89			.90			1.09

(1) The Company has found that NOW checking accounts and savings deposits are generally not sensitive to changes in interest rates and, therefore, it has placed such liabilities in the “One to Three Years” category.

9

SELECTED FINANCIAL INFORMATION AND STATISTICAL DATA

The tables and schedules on the following pages set forth certain significant financial information and statistical data with respect to: the distribution of assets, liabilities and stockholders’ equity of the Company, the interest rates experienced by the Company; the investment portfolio of the Company; the loan portfolio of the Company, including types of loans, maturities, and sensitivities of loans to changes in interest rates and information on nonperforming loans; summary of the loan loss experience and reserves for loan losses of the Company; types of deposits of the Company and the return on equity and assets for the Company. This selected financial data is derived in part from, and should be read in conjunction with, the Consolidated Financial Statements and the related Notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

(In thousands, except per share and other data)	2006			2005			2004			2003			2002
Summary of Operations:
Interest income	$	23,035		$	14,882		$	9,412		$	7,268		$	6,316
Interest expense		11,590			6,085			3,046			2,634			2,703
Net interest income		11,445			8,797			6,366			4,634			3,613
Provision for loan losses		2,852			2,276			65			409			442
Other income		2,782			1,421			1,457			1,065			899
Other expense		10,665			7,898			6,507			4,352			3,216
Income before income tax expense		710			44			1,251			938			854
Income tax expense		286			-69			395			288			287
Net income	$	424		$	113		$	856		$	650		$	567
Net interest income on a taxable-equivalent basis	$	11,504		$	8,853		$	6,436		$	4,704		$	3,666
Selected Average Balances:
Total assets	$	325,504		$	249,463		$	174,288		$	127,733		$	100,833
Earning assets		299,871			225,840			156,058			120,837			94,903
Loans		250,494			176,266			115,200			94,121			70,764
Deposits		263,224			187,193			131,459			100,432			81,598
Stockholders’ equity		26,465			25,939			17,806			10,185			9,456
Selected Year End Balances:
Total assets	$	296,936		$	309,457		$	195,290		$	158,729		$	109,186
Earning assets		271,628			280,768			174,134			143,187			102,432
Loans		225,631			230,908			127,185			109,589			81,712
Allowance for loan losses		5,507			3,000			1,528			2,118			821
Deposits		237,553			245,569			139,039			123,222			86,004
Stockholders’ equity		26,792			25,395			25,832			13,298			9,743
Common Share Data:
Outstanding at year end		3,020,735			2,913,505			2,887,555			1,677,042			1,431,021
Weighted average outstanding		2,965,525			2,908,758			2,116,920			1,460,293			1,439,314
Diluted weighted average outstanding		3,028,683			3,064,743			2,280,198			1,666,143			1,510,241
Per Share Ratios:
Net income - basic	$	0.14		$	0.04		$	0.40		$	0.44		$	0.39
Net income - diluted		0.14			0.04			0.38			0.39			0.38
Dividends declared		0.08			0.08			0.08			0.08			—
Book value		8.76			8.90			6.17			7.93			6.81
Tangible book value		7.91			7.82			8.02			6.38			6.81
Profitability Ratios:
Return on average assets		0.13	%		0.05	%		0.49	%		0.51	%		0.56	%
Return on average equity		1.60	%		0.44	%		4.81	%		6.38	%		6.00	%
Net interest margin		3.82	%		3.90	%		4.08	%		3.83	%		3.83	%
Efficiency ratio		74.96	%		77.29	%		83.18	%		76.36	%		71.28	%
Liquidity Ratios:
Total loans to total deposits		94.98	%		94.03	%		91.47	%		88.94	%		95.01	%
Average loans to average earning assets		83.53	%		78.05	%		73.82	%		77.89	%		74.56	%
Noninterest-bearing deposits to total deposits		8.20	%		9.26	%		11.73	%		13.97	%		7.83	%
Capital Adequacy Ratios:
Average equity to average assets		8.13	%		10.40	%		10.22	%		7.97	%		9.38	%
Dividend payout ratio		56.32	%		205.91	%		20.00	%		13.52	%		NA	%
Asset Quality Ratios:
Net charge-offs to average loans		0.14	%		0.46	%		0.57	%		0.41	%		0.34	%
Nonperforming loans to total loans		0.28	%		0.02	%		0.06	%		1.45	%		0.04	%
Nonperforming assets to total assets		0.22	%		0.01	%		0.06	%		1.00	%		0.18	%
Allowance for loan losses to total loans		2.44	%		1.30	%		1.20	%		1.93	%		1.00	%
Allowance for loan losses to nonperforming loans		859	%		8108	%		1886	%		133	%		2648	%

10

Average Balances and Net Income Analysis

The following table sets forth the amount of the Company’s interest income or interest expense for each category of interest-earning assets and interest-bearing liabilities and the average interest rate for total interest-earning assets and total interest-bearing liabilities, net interest spread and net yield on average interest-earning assets.

	Year Ended December 31,
	2006								2005								2004
	Average Balance			Interest Income/ Expense		Average Yield/Rate Paid			Average Balance			Interest Income/ Expense		Average Yield/Rate Paid			Average Balance			Interest Income/ Expense		Average Yield/Rate Paid
ASSETS
Interest-earning assets:
Loans, net of unearned interest	$	250,494		$	20,871		8.33	%	$	176,266		$	12,986		7.37	%	$	115,200		$	7,933		6.89	%
Investment securities:
Taxable		42,285			1,823		4.31	%		43,168			1,670		3.87	%		33,076			1,349		4.08	%
Nontaxable		1,446			39		2.70	%		1,495			38		2.54	%		1,702			46		2.70	%
Interest-bearing deposits in banks		424			21		4.95	%		416			16		3.85	%		412			5		1.21	%
Federal funds sold		5,222			281		5.38	%		4,495			172		3.83	%		5,668			80		1.41	%
Total interest-earning assets	$	299,871		$	23,035		7.68	%	$	225,840		$	14,882		6.59	%	$	156,058		$	9,413		6.03	%
Noninterest-earning assets:
Cash	$	6,640							$	6,468							$	4,907
Allowance for loan losses		(3,435	)							(1,891	)							(1,837	)
Unrealized gain (loss) on
available for sale securities		(1,340	)							(947	)							(214	)
Other assets		23,768								19,993								15,374
Total noninterest-earning assets		25,633								23,623								18,230
Total assets	$	325,504							$	249,463							$	174,288
LIABILITIES AND STOCKHOLDERS’ EQUITY
Interest-bearing liabilities:
Savings and interest-bearing
Demand deposits	$	65,150		$	1,776		2.73	%	$	53,459		$	805		1.51	%	$	42,012		$	269		0.64	%
Time deposits		176,252			8,158		4.63	%		113,180			3,890		3.44	%		75,463			1,963		2.60	%
Other borrowings		33,520			1,656		4.94	%		34,992			1,390		3.97	%		23,776			815		3.43	%
Total interest-bearing liabilities		274,922			11,590		4.22	%		201,631			6,085		3.02	%		141,251			3,047		2.16	%
Noninterest-bearing liabilities and
stockholders’ equity:
Demand deposits	$	21,822							$	20,554							$	13,984
Other liabilities		2,295								1,339								1,247
Stockholders’ equity		26,465								25,939								17,806
Total noninterest-bearing liabilities
and stockholders’ equity		50,582								47,832								33,037
Total liabilities and
stockholders’ equity	$	325,504							$	249,463							$	174,288
Interest rate spread							3.46	%							3.57	%							3.87	%
Net interest income				$	11,445							$	8,797							$	6,366
Net interest margin							3.82	%							3.90	%							4.08	%

11

Rate and Volume Analysis

The following table reflects the changes in net interest income resulting from changes in interest rates and from asset and liability volume. The change in interest attributable to rate has been determined by applying the change in rate between years to average balances outstanding in the later year. The change in interest due to volume has been determined by applying the rate from the earlier year to the change in average balances outstanding between years. Thus, changes that are not solely due to volume have been consistently attributed to rate.

	Year Ended December 31,
	2006 vs. 2005
	(Dollars in Thousands)
			Changes Due To
	Increase (Decrease)		Rate			Volume
Increase (decrease) in:
Income from earning assets:
Interest and fees on loans	$	7,885	$	2,416		$	5,469
Interest on securities:
Taxable		153		187			(34	)
Tax exempt		1		2			(1	)
Interest-bearing deposits in banks		5		5			—
Interest on federal loans		109		81			28
Total interest income		8,153		2,691			5,462
Expense from interest-bearing liabilities:
Interest on savings and interest-bearing demand deposits		971		795			176
Interest on time deposits		4,268		2,100			2,168
Interest on other borrowings		266		325			(59	)
Total interest expense		5,505		3,220			2,285
Net interest income	$	2,648	$	(529	)	$	3,177

	Year Ended December 31,
	2005 vs. 2004
	(Dollars in Thousands)
				Changes Due To
	Increase (Decrease)			Rate			Volume
Increase (decrease) in:
Income from earning assets:
Interest and fees on loans	$	5,053		$	848		$	4,205
Interest on securities:
Taxable		321			(91	)		412
Tax exempt		(8	)		(2	)		(6	)
Interest-bearing deposits in banks		11			11			—
Interest on federal loans		92			108			(16	)
Total interest income		5,469			874			4,595
Expense from interest-bearing liabilities:
Interest on savings and interest-bearing demand deposits		536			463			73
Interest on time deposits		1,927			946			981
Interest on other borrowings		575			190			385
Total interest expense		3,038			1,599			1,439
Net interest income	$	2,431		$	(725	)	$	3,156

12

INVESTMENT PORTFOLIO

Types of Investments

The carrying amounts of available-for-sale securities at the dates indicated are summarized as follows:

	December 31,
	2006		2005		2004
	(Dollars in Thousands)
U. S. Treasury	$	995	$	994	$	1,536
U. S. Government and sponsored agencies		25,705		29,482		23,546
State and municipal securities		925		1,504		1,448
Mortgage-backed securities		7,945		7,585		8,719
Equity Securities		954		2,125		7,269
Total securities	$	36,524	$	41,690	$	42,518

Maturities

The amounts of investment securities in each category as of December 31, 2006 are shown in the following table according to contractual maturity classifications (1) one year or less, (2) after one year through five years, (3) after five years through ten years, and (4) after ten years.

	U. S. Treasury and Other U. S. Government Agencies and Corporations (Dollars in Thousands)					State and Political Subdivisions (Dollars in Thousands)					Equity Securities (Dollars in Thousands)
	Amount		Yield (1)			Amount		Yield (1)			Amount		Yield (1)
Maturity:
One year or less	$	2,969		3.33	%	$	—		—	%	$	—		—	%
After one year through five years		23,257		3.92			589		3.87			—		—
After five years through ten years		932		4.76			—		—			—		—
After ten years		7,447		4.84			336		5.92			994		5.26
	$	34,605		4.11	%	$	925		4.59	%	$	994		5.26	%

(1) Yields were computed using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, on a ratable basis over the life of each security. The weighted average yield for each maturity range was computed using the acquisition price of each security in that range.

LOAN PORTFOLIO

Types of Loans

The amounts of loans outstanding at the indicated dates are shown in the following table according to the type of loan.

	December 31,
	2006		2005		2004		2003		2002
	(Dollars in Thousands)
Commercial	$	36,571	$	38,145	$	29,170	$	23,776	$	14,553
Real estate - construction		35,454		37,049		12,443		9,938		12,379
Real estate - farmland		1,753		866		802		2,738		2,416
Real estate - mortgage, commercial		47,017		37,197		72,885		59,143		40,743
Real estate - mortgage, residential		96,519		107,289		—		—		—
Consumer installment loans and other		8,068		10,233		11,550		13,795		11,457
		225,382		230,779		126,850		109,390		81,548
Net deferred loan fees and costs		249		129		336		199		165
		225,631		230,908		127,186		109,589		81,713
Less allowance for loan losses		5,507		3,000		1,529		2,118		822
Net loans	$	220,124	$	227,908	$	125,657	$	107,471	$	80,891

13

Maturities and Sensitivities of Loans to Changes in Interest Rates

Commercial and construction loans are shown in the following table according to contractual maturity classifications (1) one year or less, (2) after one year through five years, and (3) after five years.

	December 31,
	2006		2005		2004		2003		2002
	(Dollars in Thousands)
Commercial:
One year or less	$	17,724	$	20,229	$	20,266	$	14,755	$	9,260
After one year through five years		18,396		17,629		8,882		8,774		5,293
After five years		451		287		22		247		—
		36,571		38,145		29,170		23,776		14,553
Construction:
One year or less		29,890		31,090		12,443		9,938		12,379
After one year through five years		5,564		5,959		—		—		—
After five years		—		—		—		—		—
		35,454		37,049		12,443		9,938		12,379
	$	72,025	$	75,194	$	41,613	$	33,714	$	26,932

The following table summarizes the above loans at December 31, 2006 with the due dates after one year, which have predetermined and floating or adjustable interest rates.

	(Dollars in Thousands)
Predetermined interest rates	$	8,168
Floating or adjustable interest rates		16,243
	$	24,411

Risk Elements

Information with respect to nonaccrual, past due and restructured loans are as follows:

	December 31,
	2006		2005		2004		2003		2002
	(Dollars in Thousands)
Nonaccrual loans	$	641	$	37	$	81	$	1,590	$	31
Loans contractually past due ninety
days or more as to interest or
principal payments and still accruing		—		—		—		—		—
Restructured loans		—		—		—		—		—
Loans, now current about which there
are serious doubts as to the ability of
the borrower to comply with loan
repayment terms		—		—		—		—		—

It is the policy of the Banks to discontinue the accrual of interest income when, in the opinion of management, collection of such interest becomes doubtful. A loan is placed on nonaccrual status when (1) there is a significant deterioration in the financial condition of the borrower and full repayment of principal and interest is not expected and (2) the principal or interest is more than ninety days past due, unless the loan is both well-secured and in the process of collection.

Loans classified for regulatory purposes as loss, doubtful, substandard, or special mention that have not been included in the table above represent loans with potential weaknesses and a greater risk for losses. These loans are identified and evaluated on a case-by-case basis. Management monitors and reviews these loans on a regular basis to insure that any potential losses on these loans are promptly recorded.

14

SUMMARY OF LOAN LOSS EXPERIENCE

The following table summarizes average loan balances for the year determined using the daily average balances during the period of banking operations; changes in the allowance for loan losses arising from loans charged off and recoveries on loans previously charged off; additions to the allowance which have been charged to operating expense; and the ratio of net charge-offs during the period to average loans.

	December 31,
	2006			2005			2004			2003			2002
Average amount of loans outstanding	$	250,494		$	176,266		$	115,200		$	94,121		$	70,764
		(Dollars in Thousands)
Balance of reserve for possible loan losses
at beginning of period	$	3,000		$	1,528		$	2,118		$	821		$	618
Charge-offs:
Commercial, financial and agricultural		380			246			394			168			228
Real estate		40			102			11			100			—
Consumer		218			687			386			121			43
Recoveries:
Commercial, financial and agricultural		158			26			42			—			30
Real estate		40			—			—			—			—
Consumer		95			205			94			8			1
Net charge-offs		345			804			655			381			240
Additions to reserve charged to operating expenses		2,852			2,276			65			409			443
Addition to reserve as a result of acquisition		—			—			—			1,269			—
Balance of reserve for possible loan losses	$	5,507		$	3,000		$	1,528		$	2,118		$	821
Ratio of net loan charge-offs to average loans		0.14	%		.46	%		.57	%		.40	%		.34	%

Allowance for Loan Losses

The allowance for loan losses is maintained at a level that is deemed appropriate by management to adequately cover all known and inherent risks in the loan portfolio. Management’s evaluation of the loan portfolio includes a periodic review of loan loss experience, current economic conditions which may affect the borrower’s ability to pay and the underlying collateral value of the loans.

Management has made no allocations of its allowance for loan losses to specific categories of loans. Based on management’s best estimate, the allocation of the allowance for loan losses to types of loans, as of the indicated dates, is as follows:

	December 31,
	2006					2005					2004					2003					2002
	Amount		Percent of Loans in Category To Total Loans			Amount		Percent of Loans in Category To Total Loans			Amount		Percent of Loans in Category To Total Loans			Amount		Percent of Loans in Category To Total Loans			Amount		Percent of Loans in Category To Total Loans
	(Dollars in Thousands)
Commercial, financial,
industrial and
agricultural	$	845		16	%	$	1,883		17	%	$	1,011		23	%	$	1,399		22	%	$	156		18	%
Real estate		4,284		80			912		79			291		68			406		66			474		68
Consumer		195		4			205		4			226		9			313		12			182		14
Unallocated		183		—			—		—			—		—			—		—			9		—
	$	5,507		100	%	$	3,000		100	%	$	1,528		100	%	$	2,118		100	%	$	821		100	%

15

DEPOSITS

Average amount of deposits and average rate paid thereon, classified as to noninterest-bearing demand deposits, interest-bearing demand and savings deposits and time deposits for the periods indicated are presented below.

	Year Ended December 31,
	2006					2005					2004
	Amount		Rate			Amount		Rate			Amount		Rate
	(Dollars in Thousands)
Noninterest bearing demand deposits	$	21,822		—	%	$	20,554		—	%	$	13,984		—	%
Interest-bearing demand and savings deposits		65,150		2.73			53,459		1.51			42,012		0.64
Time deposits		176,252		4.63			113,180		3.44			75,463		2.60
Total deposits	$	263,224				$	187,193				$	131,459

The Company has a large, stable base of time deposits, with some dependence on volatile deposits of $100,000 or more. The time deposits are primarily certificates of deposit and individual retirement accounts obtained from individual customers.

The amounts of time certificates of deposit issued in amounts of $100,000 or more as of December 31, 2006, are shown below by category, which is based on time remaining until maturity of (i) three months or less, (ii) over three through twelve months and (iii) over twelve months.

	(Dollars in Thousands)
Three months or less	$	31,822
Over three through twelve months		52,657
Over twelve months		12,498
Total	$	96,977

RETURN ON ASSETS AND STOCKHOLDERS’ EQUITY

The following table shows return on assets (net income divided by average total assets), return on equity (net income divided by average stockholders’ equity), dividend payout ratio (dividends declared per share divided by net income per share) and stockholders’ equity to asset ratio (average stockholders’ equity divided by average total assets) for the periods indicated is presented below.

	Year Ended December 31,
	2006			2005			2004
Return on assets		.13	%		.05	%		.49	%
Return on equity		1.60			.44			4.81
Dividends payout		56.32			205.92			20.00
Equity to assets ratio		8.13			10.40			10.22

 

Impact of Inflation

The consolidated financial statements and related consolidated financial data presented herein have been prepared in accordance with generally accepted accounting principles and practices within the banking industry which require the measurement of financial position and operating results in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, virtually all the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution’s performance than the effects of general levels of inflation.

16

CORPORATE INFORMATION

The Company’s common stock is traded on the NASDAQ Capital Market under the symbol “ALBY.” The following table shows the high and low sales price for the Company’s common stock as reported on the NASDAQ Capital market for the periods indicated.

	High and Low Sales Price Per Share				Dividends Declared (per share)
	High		Low
2006:
First Quarter	$	11.50	$	9.75	$	0.02
Second Quarter		11.20		10.01		0.02
Third Quarter		12.50		10.24		0.02
Fourth Quarter		13.43		11.98		0.02

	High and Low Sales Price per Share				Dividends Declared
	High		Low
2005:
First Quarter	$	13.59	$	11.00	$	0.02
Second Quarter		12.40		10.96		0.02
Third Quarter		12.25		11.09		0.02
Fourth Quarter		12.50		10.13		0.02

The Company’s common stock was held by approximately 173 shareholders of record at December 31, 2006.

Dividends

The Banks are subject to restrictions on the payment of dividends under federal banking laws, the regulations of the OCC and the Federal Deposit Insurance Corporation, and the OCC Agreements. The Banks are not currently permitted to pay dividends to the Company without prior regulatory approval. The Company is subject to limits on payment of dividends under Georgia law and by the rules, regulations and policies of federal banking authorities. No assurance can be given that any dividends will be declared by the Company in the future, or if declared, what the amount should be or whether such dividends would continue. Future dividend policy will depend on the Banks’ earnings, capital position, financial condition and other factors.

17

Performance Graph

The following Performance Graph compares the yearly percentage change in cumulative total shareholder return on the Company’s common stock to the cumulative total return on the Nasdaq Stock Market (U.S.) Index and the SNL NASDAQ Bank Stock Index for the last five years.

	2001	2002	2003	2004	2005	2006
COMMUNITY CAPITAL BANCSHARES, INC.	100	138	150	146	138	160
INDEPENDENT BANK INDEX	100	124	168	193	199	230
NASDAQ INDEX	100	69	103	113	115	126

18

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors

Community Capital Bancshares, Inc.

Albany, Georgia

We have audited the accompanying consolidated balance sheets of Community Capital Bancshares, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Community Capital Bancshares, Inc. and Subsidiaries as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with U. S. generally accepted accounting principles.

/s/ Mauldin & Jenkins, LLC

Albany, Georgia

April 16, 2007

19

This Page is Intentionally Left Blank.

20

COMMUNITY CAPITAL BANCSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2006 AND 2005

	2006			2005
Assets
Cash and due from banks	$	7,407,953		$	6,930,791
Federal funds sold		6,400,000			8,671,000
Securities available for sale, at fair value		36,524,082			41,690,377
Restricted equity securities, at cost		2,433,541			2,425,850
Loans		225,630,416			230,908,429
Less allowance for loan losses		5,506,743			3,000,207
Loans, net		220,123,673			227,908,222
Premises and equipment		6,757,642			7,892,071
Premises and equipment held for sale		3,021,531			—
Goodwill		2,333,509			2,333,509
Core deposit premium		239,626			281,818
Other assets		11,694,000			11,323,540
	$	296,935,557		$	309,457,178
Liabilities and Stockholders’ Equity
Deposits
Noninterest-bearing	$	19,479,966		$	22,744,631
Interest-bearing		218,072,656			222,824,147
Total deposits		237,552,622			245,568,778
Other borrowings		27,000,000			33,000,000
Guaranteed preferred beneficial interests in junior
subordinated debentures		4,124,000			4,124,000
Other liabilities		1,466,928			1,369,532
Total liabilities		270,143,550			284,062,310
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value not stated; 2,000,000 shares
authorized; no shares issued		—			—
Common stock, par value $1; 10,000,000 shares authorized;
3,074,210 and 2,973,356 issued and outstanding		3,074,210			2,973,356
Capital surplus		23,031,714			22,245,618
Retained earnings		1,653,923			1,468,598
Accumulated other comprehensive loss		(568,170	)		(845,383	)
		27,191,677			25,842,189
Less cost of treasury stock, 53,475 and 59,851 shares		399,670			447,321
Total stockholders’ equity		26,792,007			25,394,868
	$	296,935,557		$	309,457,178

See Notes to Consolidated Financial Statement.

21

COMMUNITY CAPITAL BANCSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

	2006			2005			2004
Interest income
Loans	$	20,870,788		$	12,985,455		$	7,932,760
Taxable securities		1,822,442			1,669,370			1,348,955
Nontaxable securities		39,290			37,926			45,698
Deposits in banks		21,051			16,031			5,537
Federal funds sold		280,847			172,848			79,578
Total interest income		23,034,418			14,881,630			9,412,528
Interest expense
Deposits		9,934,176			4,695,007			2,231,636
Other borrowed money		1,655,605			1,390,111			814,801
Total interest expense		11,589,781			6,085,118			3,046,437
Net interest income		11,444,637			8,796,512			6,366,091
Provision for loan losses		2,851,500			2,276,000			65,000
Net interest income after provision for loan losses		8,593,137			6,520,512			6,301,091
Other income
Service charges on deposit accounts		1,243,417			1,037,741			916,688
Financial service fees		216,887			211,795			89,248
Mortgage origination fees		901,142			564,955			172,949
Gain (loss) on sale of investment securities		(51,652	)		(774,800	)		54,335
Increase in cash surrender value of
bank owned life insurance policies		250,144			241,945			140,300
Other operating income		222,056			140,116			83,611
Total other income		2,781,994			1,421,752			1,457,131
Other expenses
Salaries and employee benefits		5,492,562			3,645,348			3,116,370
Equipment and occupancy expenses		1,317,231			1,251,632			982,243
Marketing expenses		184,502			203,111			213,889
Data processing expenses		697,224			617,190			495,213
Administrative expenses		1,101,400			616,335			385,664
Legal and professional fees		577,714			372,390			357,691
Directors fees		283,725			248,300			239,400
Amortization of intangible assets		42,192			48,108			52,079
Stationery and supply expenses		234,990			186,727			153,951
Other operating expenses		733,081			708,746			510,475
Total other expenses		10,664,621			7,897,887			6,506,975
Income before income tax expense (benefit)		710,510			44,377			1,251,247
Income tax expense (benefit)		286,164			(68,922	)		395,175
Net income	$	424,346		$	113,299		$	856,072
Basic earnings per share	$	0.14		$	0.04		$	0.40
Diluted earnings per share	$	0.14		$	0.04		$	0.38

See Notes to Consolidated Financial Statements.

22

COMMUNITY CAPITAL BANCSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

	2006		2005			2004
Net income	$	424,346	$	113,299		$	856,072
Other comprehensive income (loss):
Net unrealized holding gains (losses) arising during period,
net of tax benefits (expense) of $(125,245), $529,517 and $159,729		243,123		(1,027,886	)		(310,062	)
Reclassification adjustment for (gains) losses included in net income,
net of tax (benefit) $(17,564), $(263,432) and $18,474		34,090		511,368			(35,861	)
Total other comprehensive income (loss)		277,213		(516,518	)		(345,923	)
Comprehensive income (loss)	$	701,559	$	(403,219	)	$	510,149

See Notes to Consolidated Financial Statements.

23

COMMUNITY CAPITAL BANCSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

	Common Stock						Capital
	Shares			Par Value			Surplus
Balance, December 31, 2003		1,741,191		$	1,741,191		$	11,075,397
Net income		—			—			—
Issuance of common stock, net of stock issue costs		1,150,000			1,150,000			10,626,490
Stock issued upon exercise of warrants and options		58,998			58,998			353,988
Stock redeemed in connection with bank acquisition		(3,713	)		(3,713	)		(44,560	)
Dividends declared, $.08 per share		—			—			—
Net treasury stock transactions		—			—			34,326
Other comprehensive loss		—			—			—
Balance, December 31, 2004		2,946,476			2,946,476			22,045,641
Net income		—			—			—
Stock issued upon exercise of warrants and options		26,880			26,880			186,809
Dividends declared, $.08 per share		—			—			—
Net treasury stock transactions		—			—			13,168
Other comprehensive loss		—			—			—
Balance, December 31, 2005		2,973,356			2,973,356			22,245,618
Net income		—			—			—
Stock issued upon exercise of warrants and options		100,854			100,854			605,287
Stock-based compensation		—			—			160,611
Dividends declared, $.08 per share		—			—			—
Net treasury stock transactions		—			—			20,198
Other comprehensive income		—			—			—
Balance, December 31, 2006		3,074,210		$	3,074,210		$	23,031,714

See Notes to Consolidated Financial Statements.

24

							Treasury Stock
	Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Shares			Cost			Total Stockholders’ Equity
Balance, December 31, 2003	$	915,679		$	17,058			64,149		$	(451,684	)	$	13,297,641
Net income		856,072			—			—			—			856,072
Issuance of common stock, net of stock issue costs		—			—			—			—			11,776,490
Stock issued upon exercise of warrants and options		—			—			—			—			412,986
Stock redeemed in connection with bank acquisition		—			—			—			—			(48,273	)
Dividends declared, $.08 per share		(183,148	)		—			—			—			(183,148	)
Net treasury stock transactions		—			—			(5,228	)		31,577			65,903
Other comprehensive loss		—			(345,923	)		—			—			(345,923	)
Balance, December 31, 2004		1,588,603			(328,865	)		58,921			(420,107	)		25,831,748
Net income		113,299			—			—			—			113,299
Stock issued upon exercise of warrants and options		—			—			—			—			213,689
Dividends declared, $.08 per share		(233,304	)		—			—			—			(233,304	)
Net treasury stock transactions		—			—			930			(27,214	)		(14,046	)
Other comprehensive loss		—			(516,518	)		—			—			(516,518	)
Balance, December 31, 2005		1,468,598			(845,383	)		59,851			(447,321	)		25,394,868
Net income		424,346			—			—			—			424,346
Stock issued upon exercise of warrants and options														706,141
Stock-based compensation		—			—			—			—			160,611
Dividends declared, $.08 per share		(239,021	)		—			—			—			(239,021	)
Net treasury stock transactions		—			—			(6,376	)		47,651			67,849
Other comprehensive income		—			277,213			—			—			277,213
Balance, December 31, 2006	$	1,653,923		$	(568,170	)		53,475		$	(399,670	)	$	26,792,007

25

COMMUNITY CAPITAL BANCSHARES, INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

	2006			2005			2004
OPERATING ACTIVITIES
Net income	$	424,346		$	113,299		$	856,072
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		467,282			437,140			425,768
Amortization of core deposit premiums		42,192			48,108			52,079
Provision for loan losses		2,851,500			2,276,000			65,000
Provision for deferred taxes		(672,188	)		(393,883	)		533,294
Net (gain) loss on sale of securities available for sale		51,652			774,800			(54,335	)
Increase (decrease) in income taxes payable		(122,636	)		326,739			(38,952	)
Increase in interest receivable		(209,821	)		(1,096,979	)		(94,006	)
Increase (decrease) in interest payable		182,685			349,271			(31,907	)
Stock-based compensation		160,611			—			—
Other operating activities		418,824			(611,409	)		(447,485	)
Net cash provided by operating activities		3,594,447			2,223,086			1,265,528
INVESTING ACTIVITIES
Purchase of property and equipment		(2,475,122	)		(2,178,876	)		(1,837,318	)
Net (increase) decrease in federal funds sold		2,271,000			(7,308,000	)		1,321,000
Net (increase) decrease in loans		4,933,049			(104,527,146	)		(18,250,857	)
Proceeds from maturities of securities available for sale		4,555,362			1,277,340			5,781,067
Proceeds from sales of securities available for sale		3,081,400			6,608,456			8,006,143
Proceeds from sale of fixed assets		108,000			—			—
Purchases of securities available for sale		(2,109,788	)		(9,022,221	)		(25,889,469	)
Purchase of bank owned life insurance		—			—			(6,218,300	)
Net cash provided by (used in) investing activities		10,363,901			(115,150,447	)		(37,087,734	)
FINANCING ACTIVITIES
Net increase (decrease) in deposits		(8,016,155	)		106,529,535			15,816,746
Dividends paid to shareholders		(239,021	)		(233,304	)		(154,215	)
Proceeds from exercise of stock warrants and options		706,141			213,689			412,986
Net increase (decrease) in other borrowings		(6,000,000	)		7,847,457			9,133,899
Proceeds from issuance of common stock, net		—			—			11,776,490
Treasury stock transactions, net		67,849			(14,046	)		65,903
Net cash provided by (used in) financing activities		(13,481,186	)		114,343,331			37,051,809
Net increase in cash and due from banks		477,162			1,415,970			1,229,603
Cash and due from banks at beginning of year		6,930,791			5,514,821			4,285,218
Cash and due from banks at end of year	$	7,407,953		$	6,930,791		$	5,514,821
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest	$	11,407,096		$	5,735,847		$	3,078,344
Income taxes	$	1,061,451		$	—		$	—
NONCASH TRANSACTIONS
Unrealized gains (losses) on securities available for sale	$	420,021		$	782,600		$	(526,775	)
Transfer to premises and equipment held for sale	$	3,021,531		$	—		$	—
See Notes to Consolidated Financial Statements.

26

COMMUNITY CAPITAL BANCSHARES, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

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

Basis of Presentation and Accounting Estimates

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

In preparing the consolidated financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near-term relate to the determination of the allowance for loan losses, the valuation of foreclosed real estate, goodwill, intangible assets, deferred tax assets and contingent assets and liabilities. The determination of the adequacy of the allowance for loan losses is based on estimates that are susceptible to significant changes in the economic environment and market conditions. In connection with the determination of the estimated losses on loans and the valuation of foreclosed real estate, management obtains independent appraisals for significant collateral. Intangible assets, primarily goodwill and core deposit premiums, are evaluated annually for impairment.

Cash, Due from Banks and Cash Flows

For purposes of reporting cash flows, cash and due from banks include cash on hand, cash items in process of collection and amounts due from banks. Cash flows from loans, federal funds sold, borrowings, deposits and treasury stock transactions are reported net.

The Banks are required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank, based on a percentage of deposits. The total of those reserve balances was approximately $491,000 and $547,000 at December 31, 2006 and 2005, respectively.

27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Securities

All debt securities and equity securities with a readily determinable fair value are classified as available for sale and recorded at fair value with unrealized gains and losses excluded from earnings and reported in accumulated other comprehensive income, net of the related deferred tax effect. Equity securities without a readily determinable fair value are recorded at cost.

The amortization of premiums and accretion of discounts are recognized in interest income using methods approximating the interest method over the life of the securities. Realized gains and losses, determined on the basis of the cost of specific securities sold, are included in earnings on the settlement date. Declines in the fair value of securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Loans

Loans are reported at their outstanding principal balances less unearned income, net deferred fees and costs on originated loans, and the allowance for loan losses. Interest income is accrued on the outstanding principal balance. Loan origination fees, net of certain direct loan origination costs, are deferred and recognized as an adjustment of the related loan yield over the life of the loan using a method which approximates a level yield.

The accrual of interest on loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due or at the time the loan is 90 days past due, unless the loan is well-secured and in the process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged off at an earlier date if the collection of principal or interest is considered doubtful. All interest accrued but not collected for loans that are placed on nonaccrual or charged off is reversed against interest income, unless management believes that the accrued interest is recoverable through the liquidation of collateral. Interest income on nonaccrual loans is recognized on the cash-basis or cost-recovery method, until the loans are returned to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

A loan is considered impaired when it is probable, based on current information and events, the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Impaired loans are measured by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. The amount of impairment, if any, and any subsequent changes are included in the allowance for loan losses. Interest on accruing impaired loans is recognized as long as such loans do not meet the criteria for nonaccrual status.

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses charged to expense. Loan losses are charged against the allowance when management believes the collectibility of the principal is unlikely. Subsequent recoveries are credited to the allowance.

The allowance is an amount that management believes will be adequate to absorb estimated losses relating to specifically identified loans, as well as probable credit losses inherent in the balance of the loan portfolio. The allowance for loan losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectibility of loans in light of historical experience, the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, concentrations and current economic conditions that may affect the borrower’s ability to pay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant review as more information becomes available. This evaluation does not include the effects of expected losses on specific loans or groups of loans that are related to future events or expected changes in economic conditions. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Banks’ allowance for loan losses, and may require the Banks to make additions to the allowance based on their judgment about information available to them at the time of their examinations.

The allowance consists of specific and general components. The specific component relates to loans that are classified as either doubtful, substandard or special mention. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows, collateral value or observable market price of the impaired loan is lower than the carrying value of that loan. The general component covers non-classified loans and is based on historical loss experience adjusted for qualitative factors, including an unallocated component maintained to cover uncertainties that could affect management’s estimate of probable losses. This unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

Premises and Equipment

Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation computed principally by the straight-line method over the estimated useful lives of the assets:

	Years
Buildings		39
Furniture and equipment		3-12

Premises and Equipment Held for Sale

The Company has entered into a definitive agreement to sell its assets in Charleston, South Carolina. This property is now included in our balance sheet under the caption, Premises and equipment held for sale and is recorded at cost. This transaction is expected to close during the second quarter of 2007.

29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Foreclosed Assets

Foreclosed assets acquired through or in lieu of loan foreclosure are held for sale and initially recorded at fair value. Any write-down to fair value at the time of transfer to foreclosed assets is charged to the allowance for loan losses. Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount or fair value less costs to sell. Costs of improvements are capitalized, whereas costs relating to holding foreclosed assets and subsequent adjustments to the value are expensed. The carrying amount of foreclosed assets at December 31, 2006 and 2005 was $750,883 and $462,906, respectively.

Goodwill and Intangible Assets

Goodwill represents the excess of cost over the estimated fair value of the net assets purchased in a business combination. Goodwill is required to be tested annually for impairment, or whenever events occur that may indicate that the recoverability of the carrying amount is not probable. In the event of an impairment the amount by which the carrying amount exceeds the fair value will be charged to earnings. The Company performed its annual test of impairment in the third quarter of 2006 and determined that there was no impairment of the carrying value.

Intangible assets consist of core deposit premiums acquired in connection with the business combination. The core deposit premium is being amortized over the average remaining life of the acquired customer deposits, or 8 years. Amortization periods will be reviewed annually in connection with an annual evaluation of the intangibles.

Income Taxes

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

Stock-Based Compensation

On January 1, 2006, Community Capital Bancshares adopted the fair value recognition provisions of FASB Statement No. 123(R), Share-Based Payment (SFAS 123(R)), using the modified prospective-transition method. Under that transition method, compensation cost recognized beginning in 2006 includes: (a) the compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of FASB Statement Note 123, and (b) the compensation cost for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). Results for prior periods have not been restated.

As a result of adopting Statement 123(R) on January 1, 2006, the Company’s income before income taxes and net income for the year ended December 31, 2006 were $160,611 and $131,559 lower, respectively, than if it had continued to account for share-based compensation under Opinion 25. Basic and diluted earnings per share for the year ended December 31, 2006 would have been $0.19 and $0.18, respectively, if the Company had not adopted Statement 123(R), compared to reported basic and diluted earnings per share of $0.14 and $0.14, respectively, for the same time period in 2006.

30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock-Based Compensation (Continued)

Prior to the adoption of Statement 123(R), the Company presented all tax benefits of deductions resulting from the exercise of stock options as operating cash flows in the Statement of Cash Flows. Statement 123(R) requires the cash flows resulting from the tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows.

The following table illustrates the effect on net income and earnings per share as if the Company had applied the fair value recognition provisions of FASB Statement No. 123, to stock-based employee compensation for the years ended December 31, 2005 and 2004.

	2005			2004
Net income, as reported	$	113,299		$	856,072
Deduct: Total stock-based compensation expense determined
under fair value method, net of related tax effects		(117,118	)		(138,583	)
Pro forma net income	$	(3,819	)	$	717,489
Earnings per share:
Basic - as reported	$	.04		$	.40
Basic - pro forma	$	*		$	.33
Diluted - as reported	$	.04		$	.38
Diluted - pro forma	$	*		$	.32

* Less than $.002 per share

Earnings Per Share

Basic earnings per share are computed by dividing net income by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings per share are computed by dividing net income by the sum of the weighted-average number of shares of common stock outstanding and dilutive potential common shares. Potential common shares consist of stock options and warrants.

Presented below is a summary of the components used to calculate basic and diluted earnings per share:

	Years Ended December 31,
	2006		2005		2004
Net income	$	424,346	$	113,299	$	856,072
Weighted average number of common shares outstanding		2,965,525		2,908,758		2,116,920
Effect of dilutive options		63,158		155,985		163,278
Weighted average number of common shares outstanding used to calculate dilutive earnings per share		3,028,683		3,064,743		2,280,198

At December 31, 2006, 2005 and 2004, potential common shares of 25,282, 184,660 and 29,261, respectively, were not included in the calculation of diluted earnings per share because the exercise of such shares would be anti-dilutive.

31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income.

Trust Department

The Company’s subsidiary, Albany Bank & Trust, as fiduciary or agent, provides trust services to their customers. Property, other than cash deposits held by Albany Bank & Trust in its fiduciary capacity, is not accounted for in the accompanying financial statements.

Recent Accounting Standards

In July 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109. This interpretation addresses the accounting for uncertainty in income taxes recognized in a Company’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. It prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the financial statements tax positions taken or expected to be taken in a tax return. It requires that only benefits from tax positions that are more-likely-than-not of being sustained upon examination should be recognized in the financial statements. These benefits would be recorded at amounts considered to be the maximum amounts more-likely-than-not of being sustained. At the time these positions become more-likely-than-not to be disallowed, their recognition would be reversed. This interpretation is effective for fiscal years beginning after December 15, 2006 and is not expected to have a material impact on the Company’s financial condition or results of operations.

In September 2006, the FASB issued SFAS 157, Fair Value Measurements. The standard provides guidance for using fair value to measure assets and liabilities. It defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and expands disclosures about fair value measurement. Under the standard, fair value refers to the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. It clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, the standard establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. Under the standard, fair value measurements would be separately disclosed by level within the fair value hierarchy. Statement 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact the adoption of this statement could have on its financial condition, results of operations and cash flows.

32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SECURITIES

The amortized cost and fair value of securities available for sale with gross unrealized gains and losses are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2006:
U. S. Government securities	$	1,027,148	$	—	$	(31,858	)	$	995,290
U. S. Government sponsored agencies		26,243,990		5,290		(544,754	)		25,704,526
State and municipal securities		929,366		6,820		(11,212	)		924,974
Mortgage-backed securities		8,183,356		9,300		(247,364	)		7,945,292
Other debt securities		—		—		—			—
Total debt securities		36,383,860		21,410		(835,188	)		35,570,082
Equity securities		1,001,077		—		(47,077	)		954,000
Total securities	$	37,384,937	$	21,410	$	(882,265	)	$	36,524,082
December 31, 2005:
U. S. Government securities	$	1,033,901	$	—	$	(40,271	)	$	993,630
U. S. Government sponsored agencies		30,292,329		207		(810,214	)		29,482,322
State and municipal securities		1,530,838		2,197		(28,685	)		1,504,350
Mortgage-backed securities		7,862,088		—		(277,012	)		7,585,076
Other debt securities		1,250,000		—		—			1,250,000
Total debt securities		41,969,156		2,404		(1,156,182	)		40,815,378
Equity securities		1,002,097		—		(127,098	)		874,999
Total securities	$	42,971,253	$	2,404	$	(1,283,280	)	$	41,690,377

The amortized cost and fair value of debt securities available for sale as of December 31, 2006 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
Due within one year	$	2,998,940	$	2,968,955
Due from one to five years		24,372,415		23,845,967
Due from five to ten years		499,594		474,065
Due after ten years		329,555		335,803
Mortgage-backed securities		8,183,356		7,945,292
	$	36,383,860	$	36,570,082

Securities with a carrying value of $15,300,000 and $14,879,000 at December 31, 2006 and 2005, respectively, were pledged to secure public deposits and for other purposes required or permitted by law. As of December31, 2006 and 2005, investment securities with a carrying value of $4,885,985 and $5,818,850, respectively, were pledged to secure advances from the FHLB.

33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2. SECURITIES (Continued)

Gains and losses on sales of securities available for sale consist of the following:

	Years Ended December 31,
	2006			2005			2004
Gross gains	$	7,000		$	6,351		$	95,442
Gross losses		(58,652	)		(781,151	)		(41,107	)
Net realized gains (losses)	$	(51,652	)	$	(774,800	)	$	54,335

The following tables show the gross unrealized losses and fair value of securities aggregated by category and length of time that securities have been in a continuous unrealized loss position at December 31, 2006 and 2005.

	Less Than 12 Months				Over 12 Months				Total
Description of Securities	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
December 31, 2006:
U.S. Government securities	$	—	$	—	$	1,027,148	$	31,858	$	1,027,148	$	31,858
U. S. Government sponsored
agencies		1,493,525		6,474		22,673,853		538,280		24,167,378		544,754
State and municipal securities		79,143		412		540,736		10,800		619,879		11,212
Mortgage-backed securities		—		—		6,607,741		247,364		6,607,741		247,364
Total debt securities		1,572,668		6,886		30,849,478		828,302		32,422,146		835,188
Equity securities		—		—		954,000		47,077		954,000		47,077
Total securities	$	1,572,668	$	6,886	$	31,803,478	$	875,379	$	33,376,146	$	882,265
December 31, 2005:
U.S. Government securities	$	—	$	—	$	1,033,901	$	40,271	$	1,033,901	$	40,271
U. S. Government sponsored
agencies		10,851,715		178,367		16,085,984		631,847		26,937,699		810,214
State and municipal securities		294,554		8,394		957,599		20,291		1,252,153		28,685
Mortgage-backed securities		1,422,384		36,915		6,162,690		240,097		7,585,074		277,012
Total debt securities		12,568,653		223,676		24,240,174		932,506		36,808,827		1,156,182
Equity securities		—		—		875,000		127,098		875,000		127,098
Total securities	$	12,568,653	$	223,676	$	25,115,174	$	1,059,604	$	37,683,827	$	1,283,280

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. At December 31, 2006, seventy debt securities have unrealized losses with aggregate depreciation of $882,266 from the Company’s amortized cost basis. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred and industry analysts’ reports. As management has the ability to hold securities until maturity, or for the foreseeable future and due to the fact that the unrealized losses related primarily to changes in interest rates and do not affect the expected cash flows of the underlying collateral or issuer, no declines are deemed to be other than temporary.

34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. LOANS

The composition of loans is summarized as follows:

	December 31,
	2006			2005
Commercial	$	36,570,906		$	38,145,071
Real estate - construction		35,453,908			37,049,069
Real estate - farmland		1,752,995			866,002
Real estate - mortgage, commercial		47,016,878			37,197,070
Real estate - mortgage, residential		96,518,924			107,289,238
Consumer and other		8,067,979			10,233,019
		225,381,590			230,779,469
Net deferred loan fees and costs		248,826			128,960
		225,630,416			230,908,429
Allowance for loan losses		(5,506,743	)		(3,000,207	)
Loans, net	$	220,123,673		$	227,908,222

Changes in the allowance for loan losses are as follows:

	Years Ended December 31,
	2006			2005			2004
Balance, beginning of year	$	3,000,207		$	1,528,209		$	2,117,555
Provision for loan losses		2,851,500			2,276,000			65,000
Loans charged off		(637,732	)		(1,035,866	)		(790,597	)
Recoveries of loans previously charged off		292,768			231,864			136,251
Balance, end of year	$	5,506,743		$	3,000,207		$	1,528,209

The following is a summary of information pertaining to impaired loans and nonaccrual loans:

	As of and for the Years Ended December 31,
	2006		2005		2004
Impaired loans without a valuation allowance	$	—	$	—	$	—
Impaired loans with a valuation allowance		1,293,000		218,000		279,679
Total impaired loans	$	1,293,000	$	218,000	$	279,679
Valuation allowance related to impaired loans	$	388,000	$	96,390	$	109,539
Average investment in impaired loans	$	671,000	$	378,000	$	934,840
Interest income recognized on impaired loans	$	56,000	$	—	$	108,992

35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3. LOANS (Continued)

Loans on nonaccrual status amounted to $641,371 and $36,828 at December 31, 2006 and 2005, respectively. There were no loans past due ninety days or more and still accruing interest.

In the ordinary course of business, the Company has granted loans to certain related parties, including executive officers, directors and their affiliates. The interest rates on these loans were substantially the same as rates prevailing at the time of the transaction and repayment terms are customary for the type of loan. Changes in related party loans for the year ended December 31, 2006 are as follows:

Balance, beginning of year	$	3,148,166
Advances		1,428,716
Repayments		(2,748,514	)
Balance, end of year	$	1,828,368

NOTE 4. PREMISES AND EQUIPMENT

Premises and equipment are summarized as follows:

	December 31,
	2006			2005
Land	$	2,043,195		$	3,023,195
Buildings		4,319,263			4,132,837
Furniture and equipment		3,086,455			2,963,099
Construction in progress		—			93,165
		9,448,913			10,212,296
Accumulated depreciation		(2,691,271	)		(2,320,225	)
	$	6,757,642		$	7,892,071

Leases

The Company leases the Lee County office under a noncancelable operating lease agreement from Carr Farms, LLP. The lease had an initial lease term of 3 years with an option for a 1 year, 2 years or 3 years renewal on the Lee County office.

The Company also leases the operations center under a noncancelable operating lease from Carter Commercial Properties, LLP. The lease had an initial lease term of 5 years with one five year renewal option.

Rental expense under all operating leases amounted to $107,970, $83,647 and $75,570 for each of the years ended December31, 2006, 2005 and 2004, respectively.

36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4. PREMISES AND EQUIPMENT (Continued)

Leases (Continued)

Future minimum lease commitments on noncancelable operating leases, excluding any renewal options, are summarized as follows:

2007	$	55,500
2008		11,400
2009		11,400
	$	78,300

NOTE 5. INTANGIBLE ASSETS

Following is a summary of information related to intangible assets:

	As of December 31, 2006				As of December 31, 2005
	Gross Amount		Accumulated Amortization		Gross Amount		Accumulated Amortization
Amortized intangible assets
core deposit premiums	$	397,253	$	157,627	$	397,253	$	115,435

The estimated amortization expense for each of the next five years is as follows:

2007	$	40,731
2008		35,718
2009		37,924
2010		35,164
2011		39,147

Changes in the carrying amount of goodwill are as follows:

	For the Years Ended December 31,
	2006		2005		2004
Beginning balance	$	2,333,509	$	2,333,509	$	2,117,166
Increase in goodwill based on final calculation of fair
market value of assets and liabilities acquired		—		—		216,343
Ending balance	$	2,333,509	$	2,333,509	$	2,333,509

37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. DEPOSITS

The aggregate amount of time deposits in denominations of $100,000 or more at December 31, 2006 and 2005 was $96,976,772 and $113,198,091, respectively. The scheduled maturities of time deposits at December 31, 2006 are as follows:

2007	$	128,690,531
2008		18,378,657
2009		3,669,354
2010		2,799,278
2011		3,307,337
	$	156,845,157

The Company had brokered time deposits of $18,039,000 at December 31, 2006, all maturing within the next twelve months.

NOTE 7. OTHER BORROWINGS

Other borrowings consist of the following:

	December 31,
	2006		2005
Federal Home Loan Bank advances with interest and
principal payments due at various maturity dates
through 2008 and interest rates ranging from 3.35%
to 5.51% at December 31, 2006 (weighted average
interest rate is 4.23% at December 31, 2006).	$	27,000,000	$	33,000,000

Contractual maturities of other borrowings as of December 31, 2006 are as follows:

2007	$	17,000,000
2008		10,000,000
	$	27,000,000

The advances from the Federal Home Loan Bank are secured by certain qualifying loans of approximately $60,539,000, Federal Home Loan Bank stock of approximately $1,664,000 and $4,873,000 in investment securities.

The Company and subsidiaries have available unused lines of credit with various financial institutions totaling $7,800,000 at December 31, 2006.

38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. GUARANTEED PREFERRED BENEFICIAL INTERESTS IN JUNIOR

SUBORDINATED DEBENTURES

In March 2003, the Company formed a wholly-owned Connecticut statutory business trust, Community Capital Statutory Trust I (“Statutory Trust I”) for the sole purpose of issuing trust preferred securities and investing the proceeds in floating rate junior subordinated deferrable interest debentures issued by the Company. These debentures qualify as Tier I capital under Federal Reserve Board guidelines. All of the common securities of Statutory Trust I are owned by the Company. The proceeds from the issuance of the common securities and the trust preferred securities were used by Statutory Trust I to purchase $4,124,000 of junior subordinated debentures of the Company, which carry a floating rate based on a three-month LIBOR plus 315 basis points. The debentures represent the sole asset of Statutory Trust I. The trust preferred securities accrue and pay distributions at a floating rate of three-month LIBOR plus 315 basis points per annum of the stated liquidation value of $1,000 per capital security. The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of: (i) accrued and unpaid distributions required to be paid on the trust preferred securities; (ii) the redemption price with respect to any trust preferred securities called for redemption by Statutory Trust I and (iii) payments due upon a voluntary or involuntary dissolution, winding up or liquidation of Statutory Trust I. The trust preferred securities are mandatorily redeemable upon maturity of the debentures in March 2033, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the debentures purchased by Statutory Trust I in whole or in part, on or after March 26, 2008. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the principal amount, plus any unpaid accrued interest.

NOTE 9. EMPLOYEE BENEFIT PLANS

Profit Sharing Plan

The Company has a 401(k) Employee Profit-Sharing Plan available to all eligible employees, subject to certain minimum age and service requirements. The contributions expensed were $114,358, $110,181 and $82,009 for the years ended December 31, 2006, 2005 and 2004, respectively.

Deferred Compensation Plan

During 2004, the Company established a deferred compensation plan providing for death and retirement benefits for certain officers. The estimated amounts to be paid under the compensation plan have been partially funded through the purchase of life insurance policies on the officers. Accrued deferred compensation of $134,000 and $187,951 is included in other liabilities as of December 31, 2006 and 2005, respectively. Cash surrender values of $6,632,389 and $6,382,245 on the insurance policies is included in other assets at December 31, 2006 and 2005, respectively.

Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan enables eligible employees to purchase shares of the Company’s common stock through payroll deductions. During 2005, the Company exhausted the shares reserved for issuance under this plan. As a result, the Employee Stock Purchase Plan was terminated effective September 30, 2005. Under the Employee Stock Purchase Plan, employee payroll deductions were combined with matching contributions made by the Company and used to purchase shares of the Company’s common stock on behalf of the employee at the end of the quarter. The shares were purchased in the open market at prevailing prices at the time of the purchase or were purchased from the Company at fair market value. If an employee terminated employment with the Company or any affiliate or the employee no longer satisfied the eligibility requirements, the employee’s payroll deductions made under the plan that had not been used to purchase shares of the Company’s common stock were returned to that employee and any matching credits were forfeited. On May 15, 2006, the Stockholders approved a new stock purchase plan authorizing up to 50,000 shares under this plan. Participation in the new plan commenced in the second quarter of 2006. At December 31, 2006, 6,376 shares had been purchased and 43,624 shares remained available for purchase under this plan.

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. STOCK OPTIONS AND WARRANTS

On March 11, 1999, the Company’s shareholders approved the 1998 Stock Incentive Plan under which options to purchase 303,574 shares of its common stock may be granted to directors, officers and employees. Both incentive stock options and nonqualified stock options may be granted under the plan. The exercise price of an incentive stock option may not be less than the fair market value of the Company’s common stock on the date of the grant nor less than 110% of the fair market value if the participant owns more than 10% of the outstanding common stock. Nonqualified stock options may be made exercisable at a price no less than 85% of the fair market value of the Company’s common stock on the date that the option is granted. Additionally, the exercise price of any option granted to an individual who is, on the last day of the taxable year, the chief executive officer of the Company or one of the four other highest compensated officers of the Company may not be less than the fair market value of the Company’s common stock on the date of grant. The term of any incentive stock option may not exceed ten years from the date of grant; however, any incentive stock option granted to a participant who owns more than 10% of the Company’s common stock will not be exercisable after the expiration of five years from the date the option is granted. Subject to any further limitations in a stock option agreement, in the event of a participant’s termination of employment, the term of an incentive stock option will expire, terminate and become unexercisable no later than three months after the date of the termination of employment; provided, however, that if termination of employment is due to death or disability, a one-year period shall be substituted for the three-month period. On December 31, 2006, there were 72,608 shares available for grant under the 1998 Plan.

On April 24, 2000, the Board of Directors adopted the 2000 Outside Directors Stock Option Plan under which nonqualified stock options to purchase up to 21,429 shares of the Company’s common stock may be granted to directors who are not employees of the Company or any of its affiliates and to the Chairman of the Board of Directors, regardless of whether he is an employee of the Company. The plan provides for an annual grant of a nonqualified stock option to purchase 142 shares of the Company’s common stock to each existing non-employee director and a nonqualified stock option to purchase 285 shares of the Company’s common stock to the Chairman of the Board of Directors as of the date of each annual shareholders’ meeting. Options granted pursuant to this plan are generally nontransferable 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 the Company. 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 the Company or any affiliate, the options expire, terminate and become unexercisable no later than 90 days after the date the participant ceases to provide services to the Company. On December 31, 2006, there were 7,364 shares available for grant under this Plan.

Under a nonqualified stock option agreement with Charles M. Jones, III on November 15, 1999, the Company granted Mr. Jones a nonqualified stock option to purchase 21,428 shares of the Company’s common stock at an exercise price of $7.35 per share, as adjusted to reflect the Company’s ten-for-seven stock split effective in January 2001. This was a stand-alone option award that was made outside of the 1998 Stock Incentive Plan. This option vested in 20% equal increments over five years beginning on the first anniversary of the grant date and is currently fully vested. The option expires on the tenth anniversary of the grant date or, if earlier, 90 days after Mr. Jones ceases to be a director of the Company or any affiliate.

40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. STOCK OPTIONS AND WARRANTS (Continued)

On February 23, 2003, the Company granted five members of management options to purchase an aggregate of 50,000 shares of the Company’s common stock at an exercise price of $10.18 per share. These were stand-alone option awards that were made outside of the 1998 Stock Incentive Plan. 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 the Company or any of its affiliates. The options will become fully vested if there is a change in control of the Company. The options will expire on the tenth anniversary of the grant date or, if earlier, 90 days after the optionee ceases to be an employee of the Company or any affiliate.

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 Officer of the Comptroller of the Currency, Community Capital directors may be directed to exercise or forfeit their warrants. At December 31, 2006 and 2005, there were 182,780 and 206,208 warrants outstanding, respectively.

A summary of the status of the employee stock option plans as of December 31, 2006 and 2005 and activity during the periods is as follows:

	Year Ended December 31, 2006							Year Ended December 31, 2005
	Number			Weighted-Average Exercise Price		Aggregate Intrinsic Value		Number			Weighted-Average Exercise Price		Aggregate Intrinsic Value
Under option, beginning of
the period		374,621		$	9.81	$	408,000		305,435		$	9.33	$	699,000
Granted		58,296			10.64				86,182			11.20
Exercised		(77,424	)		7.00				(5,596	)		10.06
Forfeited		(129,483	)		11.73				(11,400	)		10.94
Under option, end of the period		226,010		$	9.73	$	633,000		374,621		$	9.81	$	408,000
Unvested at the end of the period		84,700		$	10.89	$	139,000		168,190		$	11.43	$	—
Vested and exercisable at the
end of the period		141,310		$	9.03	$	495,000		206,431		$	8.32	$	532,000
Weighted-average fair value per
option of options granted during
the year						$	4.11						$	3.76

41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10. STOCK OPTIONS AND WARRANTS (Continued)

Information pertaining to options outstanding at December 31, 2006 is as follows:

	Options Outstanding								Options Exercisable
Range of Exercise Prices	Number		Weighted Average Contractual Life in Years		Weighted- Average Exercise Price		Aggregate Intrinsic Value		Number		Weighted- Average Exercise Price		Aggregate Intrinsic Value
Below to $ 7.0000		45,407		2.22	$	7.00				45,407	$	7.00
$ 7.0001 to $ 8.0000		21,713		2.87	$	7.35				21,713	$	7.35
$ 8.0001 to $ 9.0000		1,847		5.32	$	8.15				1,847	$	8.15
$ 9.0001 to $10.0000		714		2.28	$	9.10				714	$	9.10
$10.0001 to $11.0000		117,847		8.14	$	10.54				54,847	$	10.52
$11.0001 and above		38,482		7.88	$	11.88				16,782	$	11.93
Total		226,010		4.51	$	9.73	$	633,000		141,310	$	9.03	$	495,000

At December 31, 2006, there was approximately $350,000 of unrecognized compensation cost related to stock-based payments, which is expected to be recognized over a weighted-average period of 2.15 years.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Years Ended December 31,
	2006		2005
Dividend yield		0.78%		.78%
Expected life		10 years		10 years
Expected volatility		19.31 - 20.85%		14.83% - 15.96%
Risk-free interest rate		4.47 - 5.11%		4.40%

42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. INCOME TAXES

The components of income tax expense (benefit) are as follows:

	Years Ended December 31,
	2006			2005			2004
Current	$	958,352		$	324,961		$	(138,119	)
Deferred		(672,188	)		(393,883	)		533,294
	$	286,164		$	(68,922	)	$	395,175

The Company’s income tax expense differs from the amounts computed by applying the federal income tax statutory rates to income before income taxes. A reconciliation of the differences is as follows:

	Years Ended December 31,
	2006			2005			2004
Tax provision at statutory federal rate	$	241,573		$	15,088		$	425,424
Tax-exempt income, net		(9,979	)		(10,456	)		(17,123	)
Bank owned life insurance		(85,049	)		(82,261	)		(47,702	)
Incentive stock option expense		29,051			—			—
Other		110,568			8,707			34,576
Income tax expense (benefit)	$	286,164		$	(68,922	)	$	395,175

The components of the net deferred tax asset included in other assets are as follows:

	Years Ended December 31,
Deferred tax assets:	2006		2005
Loan loss reserves	$	1,372,847	$	512,472
Organizational and pre-opening expenses		—		23,581
Net operating losses		—		65,487
Deferred compensation		45,682		63,903
Securities available for sale		292,685		435,494
Non-qualified option expense		25,556		—
Write down of repossessed assets		38,692		41,672
Nonaccrual loan interest		13,239		—
		1,788,701		1,142,609
Deferred tax liabilities:
Core deposit premiums		81,473		95,818
Premium on purchased loans		—		2,378
Depreciation		321,757		229,075
Deferred loan costs, net		84,567		43,813
		487,797		371,084
Net deferred tax assets	$	1,300,904	$	771,525

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12. COMMITMENTS AND CONTINGENCIES

Loan Commitments

The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amount recognized in the balance sheets.

The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. A summary of the Company’s commitments is as follows:

	2006		2005
Commitments to extend credit	$	57,958,000	$	71,362,000
Standby letters of credit		1,020,000		1,292,550
	$	58,978,000	$	72,654,550

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the customer. Collateral held varies, but may include accounts receivable, crops, livestock, inventory, property and equipment, residential real estate and income-producing commercial properties.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those letters of credit are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. Collateral held varies as specified above and is required in instances which the Company deems necessary.

At December 31, 2006 and 2005, the carrying amount of liabilities related to the Company’s obligation to perform under standby letters of credit was insignificant. The Company has not been required to perform on any standby letters of credit, and the Company has not incurred any losses on standby letters of credit for the years ended December 31, 2006 and 2005.

Contingencies

In the normal course of business, the Company is involved in various legal proceedings. In the opinion of management, any liability resulting from such proceedings would not have a material adverse effect on the Company’s financial statements.

44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13. CONCENTRATIONS OF CREDIT

Concentration by Geographic Location:

The Company originates primarily commercial, commercial real estate, residential real estate and consumer loans to customers in Dougherty and Lee counties, Georgia; Houston and Lee counties, Alabama; and surrounding counties. The ability of the majority of the Company’s customers to honor their contractual obligations is dependent on the local and metropolitan economies of Albany, Georgia, and Dothan, Alabama.

Eighty percent of the Company’s loan portfolio is concentrated in loans secured by real estate. A substantial portion of these loans are in the Company’s primary market areas. In addition, a substantial portion of the other real estate owned is located in those same markets. Accordingly, the ultimate collectibility of the Company’s loan portfolio and recovery of the carrying amount of other real estate owned are susceptible to changes in market conditions in the Company’s market areas. The other significant concentrations of credit by type of loan are set forth in Note 3.

The Company, as a matter of policy, does not generally extend credit to any single borrower or group of related borrowers in excess of 15% of each Bank’s statutory capital, or approximately $2,062,500 for Albany Bank and Trust and $1,500,000 for AB&T National Bank.

NOTE 14. REGULATORY MATTERS

On July 27, 2006, the Banks entered into formal written agreements with the Office of the Comptroller of the Currency (the “Agreements”). Under the Agreements, the Banks agreed to maintain a higher capital level and agreed to review the CEO, President, Senior Loan Officer and other management of the Banks to ensure that the Banks have appropriate management in place to ensure compliance with all laws and to manage the day-to-day operations of the Banks. The Banks also committed to improve their information technology systems, reduce their credit risk, and review and enhance their lending policies and systems with regard to credit and collateral documentation, loan review and related records, and loan portfolio management. Under its Agreement, Albany also agreed to review and enhance its internal controls and its conflict of interest policy and overdraft policy, and committed to improve its record production and maintenance for transactions with insiders. The Agreements include additional commitments regarding allowances for loan and lease losses, interest rate risk, liquidity, internal audit, each Bank’s investments, and each Bank’s transactions with its affiliates, including Community Capital Bancshares, Inc.

Prior to entering into the Agreements, the Banks had already taken significant steps to address many of the above issues, and management of the Banks is committed to ensuring that all of the requirements of the Agreements are met. The Banks continue monthly reporting as required by the agreements.

The Banks are subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval. Due to the formal agreements discussed above, no dividends may be paid by the Banks without prior regulatory approval.

The Company and Banks are 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 consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Banks must meet specific capital guidelines that involve quantitative measures of the Company’s and Banks’ assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14. REGULATORY MATTERS (Continued)

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Banks to maintain minimum amounts and ratios of total and Tier I capital to risk-weighted assets, as defined and of Tier I capital to average assets. Management believes, as of December 31, 2006, the Company and the Banks met all capital adequacy requirements to which they are subject.

As of December 31, 2006, the most recent notification from the regulators categorized the Banks as being in compliance with the capital requirements of the formal agreements.

The Company and Banks’ actual capital amounts and ratios are presented in the following table.

	Actual					For Capital Adequacy Purposes*					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)
December 31, 2006:
Total Capital to Risk Weighted Assets:
Albany Bank and Trust	$	19,915		13.76	%	$	11,579		8	%	$	14,474		10	%
AB&T National Bank	$	8,874		13.31	%	$	5,323		8	%	$	6,667		10	%
Tier I Capital to Risk Weighted Assets:
Albany Bank and Trust	$	18,086		12.50	%	$	5,790		4	%	$	8,684		6	%
AB&T National Bank	$	8,025		12.04	%	$	2,667		4	%	$	4,000		6	%
Tier I Capital to Average Assets:
Albany Bank and Trust	$	18,086		8.53	%	$	8,483		4	%	$	10,604		5	%
AB&T National Bank	$	8,025		8.54	%	$	3,758		4	%	$	4,697		5	%
December 31, 2005:
Total Capital to Risk Weighted Assets:
Albany Bank and Trust	$	16,521		10.08	%	$	13,118		8	%	$	16,397		10	%
AB&T National Bank	$	8,427		12.97	%	$	5,199		8	%	$	6,499		10	%
Tier I Capital to Risk Weighted Assets:
Albany Bank and Trust	$	14,522		8.86	%	$	6,559		4	%	$	9,838		6	%
AB&T National Bank	$	7,612		11.71	%	$	2,600		4	%	$	3,899		6	%
Tier I Capital to Average Assets:
Albany Bank and Trust	$	14,522		6.64	%	$	8,745		4	%	$	10,932		5	%
AB&T National Bank	$	7,612		9.73	%	$	3,130		4	%	$	3,912		5	%

* Under agreements entered into by the Banks and the regulators, each Bank has agreed to maintain the following capital levels:

(a) Tier I capital equal to at least 11% of risk-weighted assets;

(b) Tier I capital equal to at least 8% of adjusted total assets.

46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair value is based on discounted cash flows or other valuation techniques. These techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. SFAS No. 107, Disclosures about Fair Value of Financial Instruments, excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments:

Cash, Due From Banks, Interest-Bearing Deposits at Other Financial Institutions and Federal Funds Sold: The carrying amount of cash, due from banks, interest-bearing deposits at other financial institutions and federal funds sold approximates fair value.

Securities: Fair value of securities is based on available quoted market prices. The carrying amount of equity securities with no readily determinable fair value approximates fair value.

Loans: The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted contractual cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. The fair value of impaired loans is estimated based on discounted contractual cash flows or underlying collateral values, where applicable.

Deposits: The carrying amount of demand deposits, savings deposits, and variable-rate certificates of deposit approximates fair value. The fair value of fixed-rate certificates of deposit is estimated based on discounted contractual cash flows using interest rates currently being offered for certificates of similar maturities.

Federal Funds Purchased, Other Borrowings and Subordinated Debentures: The carrying amount of variable rate borrowings and federal funds purchased approximates fair value.The fair value of fixed rate other borrowings is estimated based on discounted contractual cash flows using the current incremental borrowing rates for similar type borrowing arrangements.

Accrued Interest: The carrying amount of accrued interest approximates fair value.

Off-Balance-Sheet Instruments: The carrying amount of commitments to extend credit and standby letters of credit approximates fair value. The carrying amount of the off-balance-sheet financial instruments is based on fees charged to enter into such agreements.

47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

The carrying amount and estimated fair value of the Company’s financial instruments were as follows:

	December 31, 2006				December 31, 2005
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(Dollars in Thousands)
Financial assets:
Cash, due from banks, interest-
bearing deposits at other financial
institutions and federal funds sold	$	13,807,953	$	13,807,953	$	15,601,791	$	15,601,791
Securities		38,957,623		38,957,623		44,116,227		44,116,227
Loans		220,123,673		219,716,355		227,908,222		227,077,777
Accrued interest receivable		2,442,335		2,442,335		2,232,514		2,232,514
Financial liabilities:
Deposits		237,552,622		240,339,106		245,568,778		245,369,499
Other borrowings and subordinated debentures		31,124,000		30,350,928		37,124,000		36,904,695
Accrued interest payable		791,014		791,014		608,328		608,328

NOTE 16. PARENT COMPANY FINANCIAL INFORMATION

The following information presents the condensed balance sheets as of December 31, 2006 and 2005 and statements of income and cash flows of Community Capital Bancshares, Inc. for the periods ended December 31, 2006, 2005 and 2004.

CONDENSED BALANCE SHEETS

	2006		2005
Assets
Cash	$	1,442,065	$	4,541,943
Investment in subsidiaries		28,115,562		24,031,267
Premises and equipment		427,698		550,620
Other assets		1,286,207		736,614
Total assets	$	31,271,532	$	29,860,444
Liabilities
Guaranteed preferred beneficial interests in junior subordinated debentures	$	4,124,000	$	4,124,000
Other liabilities		355,525		341,576
Total liabilities		4,479,525		4,465,576
Stockholders’ equity		26,792,007		25,394,868
Total liabilities and stockholders’ equity	$	31,271,532	$	29,860,444

48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. PARENT COMPANY FINANCIAL INFORMATION (Continued)

CONDENSED STATEMENTS OF INCOME

	2006			2005			2004
Income
Management fees	$	2,145,000		$	1,632,000		$	880,008
Other		409			4,152			494
		2,145,409			1,636,152			880,502
Expenses
Interest expense		357,762			282,340			251,770
Salaries and employees benefits		1,466,178			1,073,067			1,002,219
Legal and professional		287,786			150,068			112,851
Occupancy expenses		273,932			272,368			59,967
Other operating expenses		624,426			379,762			290,325
		3,010,084			2,157,605			1,717,132
Loss before income tax benefit and equity
in undistributed income of subsidiaries		(864,675	)		(521,453	)		(836,630	)
Income tax benefit		231,939			164,618			262,484
Loss before equity in undistributed
income of subsidiaries		(632,736	)		(356,835	)		(574,146	)
Equity in undistributed income of subsidiaries		1,057,082			470,134			1,430,218
Net income	$	424,346		$	113,299		$	856,072

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. PARENT COMPANY FINANCIAL INFORMATION(Continued)

CONDENSED STATEMENTS OF CASH FLOWS

	2006			2005			2004
OPERATING ACTIVITIES
Net income	$	424,346		$	113,299		$	856,072
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation		117,880			104,793			—
Provision for deferred taxes		14,052			(66,176	)		—
Stock-based compensation		160,611			—			—
Undistributed income of subsidiaries		(1,057,082	)		(470,134	)		(1,430,218	)
(Increase) decrease in taxes receivable		(833,418	)		122,556			193,703
Other operating activities		295,409			(59,916	)		142,565
Net cash used in operating activities		(878,202	)		(255,578	)		(237,878	)
INVESTING ACTIVITIES
Contribution of capital to subsidiary bank		(2,750,000	)		—			(5,000,000	)
Cash paid for purchased subsidiary		—			—			(1,659,059	)
Purchase of property and equipment		(114,645	)		(55,509	)		(134,567	)
Proceed from sale of fixed assets		108,000			—			—
Net cash used in investing activities		(2,756,645	)		(55,509	)		(6,793,626	)
FINANCING ACTIVITIES
Dividends paid to shareholders		(239,021	)		(230,994	)		(154,215	)
Proceeds from issuance of common stock, net		—			—			11,776,490
Treasury stock transactions, net		67,849			(14,046	)		65,903
Proceeds from note payable		—			—			1,250,000
Repayment of note payable		—			—			(1,750,000	)
Proceeds from exercise of stock warrants
and options		706,141			213,689			412,986
Net cash provided by (used in) financing activities		534,969			(31,351	)		11,601,164
Net increase (decrease) in cash		(3,099,878	)		(342,438	)		4,569,660
Cash at beginning of period		4,541,943			4,884,381			314,721
Cash at end of year	$	1,442,065		$	4,541,943		$	4,884,381

50

Community Capital Bancshares, Inc.

DIRECTORS AND OFFICERS

DIRECTORS

Charles M. Jones, III Chairman, Community Capital Bancshares, Inc. Chief Executive Officer, Consolidated Loan and Mortgage Companies	Keith G. Beckham President, AB&T National Bank	Bennett D. Cotten, Jr. Orthopedic Surgeon Southwest Georgia Orthopedic and Sports Medicine
Glenn A. Dowling Podiatrist, Managing Partner Ambulatory Surgery Center and Albany Podiatry Associates	Mary Helen Dykes Retired	Van Cise Knowles Retired
C. Richard Langley Attorney Langley & Lee	William F. McAfee Business Owner - Bill McAfee Leasing, a commercial truck lessor	John H. Monk, Jr. President & CEO, Community Capital Bancshares, Inc. President & CEO, Albany Bank & Trust
Mark M. Shoemaker Medical Doctor Albany Anesthesia Assoc	Jane Anne Sullivan Business owner, Buildings Exchange, a real estate holding company	John P. Ventulett, Jr. Executive Insurance Agent J. Smith Lanier Insurors, Inc.
Lawrence B. Willson Vice President and farm manager, Sunnyland Farms, Inc.	James D. Woods Medical Doctor Drs. Adams and Woods, M.D., P.C
OFFICERS
John H. Monk, Jr. President & Chief Executive Officer	Glenn E. Creech Senior Vice President, Senior Credit Officer	David J. Baranko Executive Vice President, Chief Financial Officer and Secretary
Stan W. Edmonds Vice President - Finance	Misty L. Bruce Director of Human Resources	Justin K. Strickland Marketing Officer

Form 10-K

A copy of the Company’s 2006 Annual Report on Form 10-K, filed with the Securities and Exchange Commission, is available at no charge to each shareholder upon written request to:

David J. Baranko

Community Capital Bancshares, Inc.

P.O. Box 71269

Albany, Georgia 31708-1269

General Counsel Powell Goldstein, LLP Atlanta, Georgia           Independent Auditors Mauldin & Jenkins, LLC Albany, Georgia

51

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MX.6/S-;?LK/P3P#EC\ MS6W[*S\$\'+'YFMOV5GX(B!X.6/S-;?LK/P3P#EC\S6W[*S\$\'+'YFMOV5GX(B!X.6/S-;?LK/P3P M#EC\S6W[*S\$\'+'YF MMOV5GX(B!X.6/S-;?LK/P3P#EC\S6W[*S\$\'+'YFMOV5GX(B!X.6/S-;?LK/P3P#EC\S6W[*S\%1IJ>&EIV04L4<,$8X61Q +M#6M'D`&P1$'_]D_ ` end EX-21.1 4 ex21-1.htm EXHIBIT 21.1

EXHIBIT 21.1

SUBSIDIARIES OF COMMUNITY CAPITAL

Albany Bank & Trust

AB&T National Bank

Community Capital Statutory Trust I

Community Capital Technology Services, Inc.

Community Aviation, LLC

EX-23.1 5 ex23-1.htm EXHIBIT 23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated April 16, 2007 accompanying the consolidated financial statements included in the Annual Report of Community Capital Bancshares, Inc. on Form 10-K for the year ended December 31, 2006. We hereby consent to the incorporation by reference of said report in the Registration Statements of Community Capital Bancshares, Inc. on Form S-8, effective July 29, 2002 (file no. 333-97287), Form S-8, effective May 28, 2003 (file no. 333-105602) and on Form S-8, effective June 30, 2006 (file no. 333-135489).

	/s/ MAULDIN & JENKINS, LLC
Albany, Georgia
April 16, 2007

EX-31.1 6 ex31-1.htm EXHIBIT 31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Monk, Jr., certify that:

1.	I have reviewed this annual report on Form 10-K of Community Capital Bancshares, Inc. (the “Registrant”);
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;
4.	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) for the Registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report based on such evaluation; and
	c)	disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;
5.	The Registrant’s other certifying officers and I have disclosed, base on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 16, 2007	/s/ John H. Monk, Jr.
	John H. Monk, Jr.
	President and Chief Executive Officer

EX-31.2 7 ex31-2.htm EXHIBIT 31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David J. Baranko, certify that:

1.	I have reviewed this annual report on Form 10-K of Community Capital Bancshares, Inc. (the “Registrant”);
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;
4.	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) for the Registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report based on such evaluation; and
	c)	disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;
5.	The Registrant’s other certifying officers and I have disclosed, base on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 16, 2007	/s/ David J. Baranko
	David J. Baranko
	Chief Financial Officer

EX-32.1 8 ex32-1.htm EXHIBIT 32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that this Annual Report on Form 10-K for the year ended December 31, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This 16th day of April, 2007.

/s/ John H. Monk, Jr.                            

John H. Monk, Jr.

President and Chief Executive Officer

/s/ David J. Baranko                               

David J. Baranko

Chief Financial Officer

-----END PRIVACY-ENHANCED MESSAGE-----

EX-21.1

EXHIBIT 21.1

SUBSIDIARIES OF COMMUNITY CAPITAL

Albany Bank & Trust

AB&T National Bank

Community Capital Statutory Trust I

Community Capital Technology Services, Inc.

Community Aviation, LLC

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We have issued our report dated April 16, 2007 accompanying the consolidated financial statements included in the Annual Report of Community Capital Bancshares, Inc. on Form 10-K for the year ended December 31, 2006. We hereby consent to the incorporation by reference of said report in the Registration Statements of Community Capital Bancshares, Inc. on Form S-8, effective July 29, 2002 (file no. 333-97287), Form S-8, effective May 28, 2003 (file no. 333-105602) and on Form S-8, effective June 30, 2006 (file no. 333-135489).

	/s/ MAULDIN & JENKINS, LLC
Albany, Georgia
April 16, 2007

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John H. Monk, Jr., certify that:

1.	I have reviewed this annual report on Form 10-K of Community Capital Bancshares, Inc. (the “Registrant”);
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;
4.	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) for the Registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report based on such evaluation; and
	c)	disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;
5.	The Registrant’s other certifying officers and I have disclosed, base on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 16, 2007	/s/ John H. Monk, Jr.
	John H. Monk, Jr.
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David J. Baranko, certify that:

1.	I have reviewed this annual report on Form 10-K of Community Capital Bancshares, Inc. (the “Registrant”);
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this annual report;
4.	The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)) for the Registrant and have:
	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)	evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as the end of the period covered by this report based on such evaluation; and
	c)	disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrants most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of this report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;
5.	The Registrant’s other certifying officers and I have disclosed, base on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of Registrant’s board of directors (or persons performing the equivalent functions):
	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 16, 2007	/s/ David J. Baranko
	David J. Baranko
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that this Annual Report on Form 10-K for the year ended December 31, 2006 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This 16th day of April, 2007.

/s/ John H. Monk, Jr.                            

John H. Monk, Jr.

President and Chief Executive Officer

/s/ David J. Baranko                               

David J. Baranko

Chief Financial Officer