##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)



|x | Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------



For the quarterly period ended: March 31, 2004



| ̈ | Transition report under Section 13 or 15(d) of the Exchange Act
|- | ---------------------------------------------------------------



For the transition period from
 to



Commission file number: 0-25846



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CCF HOLDING COMPANY

(Exact name of Small Business Issuer as Specified in Its Charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Georgia                                                        |  | 58-2173616                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)



101 North Main
Street

Jonesboro, Georgia 30236

(Address of Principal Executive Offices)



(770) 478-8881

(Issuers Telephone Number, Including Area Code)



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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or 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 ̈



State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable
date: At May 10, 2004, 1,470,125 shares of the registrants common stock were outstanding.



Transitional Small Business Disclosure Format (check one):    Yes ̈No  x



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##### Table of Contents

FORM 10-QSB



INDEX



|                              |  |         |  |                                                                                                                          |  |     
|----------------------------- |  | ------- |  | ------------------------------------------------------------------------------------------------------------------------ |  | ----
|                              |  |         |  |                                                                                                                          |  | Page
|PART I.
FINANCIAL INFORMATION |  |        
|                              |  |         | 
|                              |  | Item 1. |  | Financial Statements:                                                                                                    |  |     
|                              |  |         | 
|                              |  |         |  | Consolidated Balance Sheets as of March 31, 2004 (unaudited) and December 31, 2003 (audited)                             |  | 1   
|                              |  |         | 
|                              |  |         |  | Consolidated Statements of Earnings For the Three Months Ended March 31, 2004 and March 31, 2003 (unaudited)             |  | 2   
|                              |  |         | 
|                              |  |         |  | Consolidated Statements of Comprehensive Income For the Three Months Ended March 31, 2004 and March 31, 2003 (unaudited) |  | 3   
|                              |  |         | 
|                              |  |         |  | Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2004 and March 31, 2003 (unaudited)           |  | 4   
|                              |  |         | 
|                              |  |         |  | Notes to Unaudited Consolidated Financial Statements                                                                     |  | 5   
|                              |  |         | 
|                              |  | Item 2. |  | Managements Discussion and Analysis or Plan of Operation                                                                |  | 7   
|                              |  |         | 
|                              |  | Item 3. |  | Controls and Procedures                                                                                                  |  | 10  
|                              | 
|PART II.
OTHER INFORMATION    |  |        
|                              |  |         | 
|                              |  | Item 1. |  | Legal Proceedings                                                                                                        |  | 11  
|                              |  |         | 
|                              |  | Item 2. |  | Changes in Securities and Small Business Issuer Purchases of Equity Securities                                           |  | 11  
|                              |  |         | 
|                              |  | Item 3. |  | Defaults Upon Senior Securities                                                                                          |  | 12  
|                              |  |         | 
|                              |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                      |  | 12  
|                              |  |         | 
|                              |  | Item 5. |  | Other Information                                                                                                        |  | 12  
|                              |  |         | 
|                              |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                                         |  | 12  
|                              | 
|Signatures                    |  | 13     
|                              | 
|Certificates                  |  |        



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##### Table of Contents

PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



CCF HOLDING COMPANY AND SUBSIDIARY

Consolidated Balance Sheets



|                                                                                                                                                      |  |                |             |                  |            
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ----------- | ---------------- | -----------
|                                                                                                                                                      |  | March 31, 2004 |             | December 31,2003
|                                                                                                                                                      |  | (Unaudited)    |             | (Audited)       
|Assets                                                                                                                                                |  |                |             |                  |            
|Cash and due from banks                                                                                                                               |  | $              | 10,284,014  |                  | 10,294,292 
|Interest-bearing deposits in other financial institutions                                                                                             |  |                | 1,710,804   |                  | 1,349,804  
|Federal funds sold                                                                                                                                    |  |                | 21,198,827  |                  | 2,361,632  
|                                                                                                                                                      |  |                |             |                  |            
|Cash and cash equivalents                                                                                                                             |  |                | 33,193,645  |                  | 14,005,728 
|                                                                                                                                                      |  |               
|Interest-bearing time deposits in other financial institutions                                                                                        |  |                | 1,089,010   |                  | 1,386,075  
|Investment securities available for sale                                                                                                              |  |                | 38,407,416  |                  | 36,524,205 
|Federal Home Loan Bank stock, at cost                                                                                                                 |  |                | 750,000     |                  | 750,000    
|Loans, net                                                                                                                                            |  |                | 247,054,207 |                  | 228,334,366
|Premises and equipment, net                                                                                                                           |  |                | 7,577,104   |                  | 7,185,756  
|Accrued interest receivable                                                                                                                           |  |                | 1,122,050   |                  | 1,123,890  
|Cash surrender value of life insurance                                                                                                                |  |                | 4,686,946   |                  | 4,620,438  
|Other assets                                                                                                                                          |  |                | 1,778,197   |                  | 1,729,205  
|                                                                                                                                                      |  |                |             |                  |            
|Total assets                                                                                                                                          |  | $              | 335,658,575 |                  | 295,659,663
|                                                                                                                                                      |  |                |             |                  |            
|Liabilities and Shareholders Equity                                                                                                                  |  |                |             |                  |            
|Deposits:                                                                                                                                             |  |                |             |                  |            
|Noninterest-bearing deposits                                                                                                                          |  | $              | 30,457,262  |                  | 27,855,720 
|Interest bearing demand deposits                                                                                                                      |  |                | 99,082,565  |                  | 90,383,872 
|Savings accounts                                                                                                                                      |  |                | 7,908,012   |                  | 7,689,032  
|Time deposits less than $100,000                                                                                                                      |  |                | 108,756,959 |                  | 89,623,330 
|Time deposits greater than $100,000                                                                                                                   |  |                | 41,134,410  |                  | 34,084,868 
|                                                                                                                                                      |  |                |             |                  |            
|Total deposits                                                                                                                                        |  |                | 287,339,208 |                  | 249,636,822
|                                                                                                                                                      |  |               
|Securities sold under agreement to repurchase                                                                                                         |  |                | 1,654,016   |                  | 3,220,798  
|Federal Home Loan Bank advances                                                                                                                       |  |                | 15,000,000  |                  | 15,000,000 
|Subordinated debentures                                                                                                                               |  |                | 8,500,000   |                  | 4,000,000  
|Accrued interest payable and other liabilities                                                                                                        |  |                | 2,850,066   |                  | 4,136,044  
|                                                                                                                                                      |  |                |             |                  |            
|Total liabilities                                                                                                                                     |  |                | 315,343,290 |                  | 275,993,664
|                                                                                                                                                      |  |                |             |                  |            
|Commitments                                                                                                                                           |  |                |             |                  |            
|Shareholders Equity:                                                                                                                                 |  |                |             |                  |            
|Preferred stock, no par value; 1,000,000 shares authorized; none issued and outstanding                                                               |  |                |            |                  |           
|Common stock, $.10 par value, 4,000,000 shares authorized; 1,470,125 issued and outstanding in 2004; 1,467,957 shares issued and outstanding
in 2003. |  |                | 146,911     |                  | 146,862    
|Additional paid-in capital                                                                                                                            |  |                | 9,050,860   |                  | 9,030,932  
|Retained earnings                                                                                                                                     |  |                | 10,781,221  |                  | 10,286,108 
|Accumulated other comprehensive income                                                                                                                |  |                | 336,293     |                  | 202,097    
|                                                                                                                                                      |  |                |             |                  |            
|Total shareholders equity                                                                                                                            |  |                | 20,315,285  |                  | 19,665,999 
|                                                                                                                                                      |  |                |             |                  |            
|Total liabilities & shareholders equity                                                                                                              |  | $              | 335,658,575 |                  | 295,659,663
|                                                                                                                                                      |  |                |             |                  |            



See accompanying notes to unaudited
consolidated financial statements.



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##### Table of Contents

CCF HOLDING COMPANY AND SUBSIDIARY

Consolidated Statements of Earnings

(Unaudited)



|                                                                                 |  |                              |           |      |          
|-------------------------------------------------------------------------------- |  | ---------------------------- | --------- | ---- | ---------
|                                                                                 |  | Three Months Ended March 31,
|                                                                                 |  | 2004                         |           | 2003
|Interest and dividend income:                                                    |  |                              |           |      |          
|Interest and fees on loans                                                       |  | $                            | 4,064,569 |      | 3,581,042
|Interest bearing deposits in other financial institutions and federal funds sold |  |                              | 23,179    |      | 46,693   
|Interest and dividends on taxable investment securities                          |  |                              | 266,697   |      | 229,712  
|Interest on nontaxable investment securities                                     |  |                              | 40,035    |      | 44,193   
|                                                                                 |  |                              |           |      |          
|Total interest and dividend income                                               |  |                              | 4,394,480 |      | 3,901,640
|                                                                                 |  |                              |           |      |          
|Interest expense:                                                                |  |                              |           |      |          
|Deposit accounts                                                                 |  |                              | 1,103,283 |      | 1,199,966
|Other borrowings                                                                 |  |                              | 138,524   |      | 96,425   
|                                                                                 |  |                              |           |      |          
|Total interest expense                                                           |  |                              | 1,241,807 |      | 1,296,391
|                                                                                 |  |                              |           |      |          
|Net interest income                                                              |  |                              | 3,152,673 |      | 2,605,249
|                                                                                 |  |                             
|Provision for loan losses                                                        |  |                              | 290,000   |      | 135,000  
|                                                                                 |  |                              |           |      |          
|Net interest income after provision for loan losses                              |  |                              | 2,862,673 |      | 2,470,249
|                                                                                 |  |                              |           |      |          
|Other income:                                                                    |  |                              |           |      |          
|Service charges on deposit accounts                                              |  |                              | 261,596   |      | 216,408  
|Gain on sale of loans                                                            |  |                              |          |      | 16,433   
|Gain on sale of investment securities                                            |  |                              | 1,087     |      | 34,468   
|Other                                                                            |  |                              | 150,441   |      | 166,335  
|                                                                                 |  |                              |           |      |          
|Total other income                                                               |  |                              | 413,124   |      | 433,644  
|                                                                                 |  |                              |           |      |          
|Other expenses:                                                                  |  |                              |           |      |          
|Salaries and employee benefits                                                   |  |                              | 1,464,861 |      | 1,208,932
|Occupancy                                                                        |  |                              | 410,827   |      | 398,110  
|Other                                                                            |  |                              | 536,801   |      | 470,434  
|                                                                                 |  |                              |           |      |          
|Total other expenses                                                             |  |                              | 2,412,489 |      | 2,077,476
|                                                                                 |  |                             
|Earnings before income taxes                                                     |  |                              | 863,308   |      | 826,417  
|                                                                                 |  |                             
|Income tax expense                                                               |  |                              | 280,000   |      | 265,480  
|                                                                                 |  |                              |           |      |          
|Net earnings                                                                     |  | $                            | 583,308   |      | 560,937  
|                                                                                 |  |                              |           |      |          
|Basic earnings per share                                                         |  | $                            | 0.40      |      | 0.38     
|                                                                                 |  |                              |           |      |          
|Diluted earnings per share                                                       |  | $                            | 0.36      |      | 0.35     
|                                                                                 |  |                              |           |      |          
|Weighted average shares outstanding  basic                                      |  |                              | 1,467,962 |      | 1,467,957
|                                                                                 |  |                              |           |      |          
|Weighted average shares outstanding  diluted                                    |  |                              | 1,556,981 |      | 1,586,650
|                                                                                 |  |                              |           |      |          

See accompanying notes to unaudited consolidated financial statements.



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##### Table of Contents

CCF HOLDING COMPANY AND SUBSIDIARY

Consolidated Statements of Comprehensive Income

(Unaudited)



|                                                                    |  |                             |         |   |      |         |  
|------------------------------------------------------------------- |  | --------------------------- | ------- | - | ---- | ------- | -
|                                                                    |  | Three Months EndedMarch 31, |        
|                                                                    |  | 2004                        |         |   | 2003 |        
|Net earnings                                                        |  | $                           | 583,308 |   |      | 560,937 |  
|                                                                    |  |                             |         |   |      |         |  
|Other comprehensive income:                                         |  |                             |         |   |      |         |  
|Unrealized holding gains (losses) on investments available for sale |  |                             | 207,543 |   |      | (27,695 | )
|Associated taxes                                                    |  |                             | (72,640 | ) |      | 9,958   |  
|Reclassification adjustment for gains included in earnings          |  |                             | (1,087  | ) |      | (34,468 | )
|Associated taxes                                                    |  |                             | 380     |   |      | 12,742  |  
|                                                                    |  |                             |         |   |      |         |  
|Total other comprehensive income (loss)                             |  |                             | 134,196 |   |      | (39,463 | )
|                                                                    |  |                             |         |   |      |         |  
|Total comprehensive income                                          |  | $                           | 717,504 |   |      | 521,474 |  
|                                                                    |  |                             |         |   |      |         |  



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CCF HOLDING COMPANY AND SUBSIDIARY

Consolidated Statements of Cash Flows

(Unaudited)



|                                                                                  |  |                              |             |   |      |             |  
|--------------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ---- | ----------- | -
|                                                                                  |  | Three Months Ended March 31, |            
|                                                                                  |  | 2004                         |             |   | 2003 |            
|Cash flows from operating activities:                                             |  |                              |             |   |      |             |  
|Net earnings                                                                      |  | $                            | 583,308     |   |      | 560,937     |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                              |             |   |      |             |  
|Provision for loan losses                                                         |  |                              | 290,000     |   |      | 135,000     |  
|Depreciation, amortization, and accretion, net                                    |  |                              | 164,037     |   |      | 210,244     |  
|Net gain on sale of investment securities                                         |  |                              | (1,087      | ) |      | (34,468     | )
|Net loss on sale of other real estate                                             |  |                              | 41,009      |   |      |            |  
|Net gain on sale of loans                                                         |  |                              |            |   |      | (16,434     | )
|Net gain on sale of premises and equipment                                        |  |                              |            |   |      | (4,700      | )
|Increase in cash surrender value of life insurance                                |  |                              | (66,508     | ) |      | (69,711     | )
|Decrease in accrued interest receivable                                           |  |                              | 1,840       |   |      | 21,250      |  
|Increase in other assets                                                          |  |                              | (286,991    | ) |      | (176,269    | )
|(Decrease) increase in other liabilities                                          |  |                              | (1,285,976  | ) |      | 487,987     |  
|                                                                                  |  |                              |             |   |      |             |  
|Net cash (used in) provided by operating activities                               |  |                              | (560,368    | ) |      | 1,113,836   |  
|                                                                                  |  |                              |             |   |      |             |  
|                                                                                  |  |                             
|Cash flows from investing activities:                                             |  |                              |             |   |      |             |  
|Proceeds from maturing investment securities- available for sale                  |  |                              | 8,095,800   |   |      | 17,173,106  |  
|Purchases of investment securities-available for sale                             |  |                              | (10,562,486 | ) |      | (13,156,681 | )
|Proceeds from sales of investment securities-available for sale                   |  |                              | 1,000,000   |   |      | 505,766     |  
|Proceeds from sales of real estate owned                                          |  |                              | 196,991     |   |      | 386,770     |  
|Loan originations, net                                                            |  |                              | (23,016,795 | ) |      | (13,689,773 | )
|Proceeds from sale of other assets owned                                          |  |                              |            |   |      | 199,025     |  
|Proceeds from sale of loans                                                       |  |                              | 4,006,954   |   |      | 5,232,245   |  
|Purchases of premises and equipment                                               |  |                              | (539,562    | ) |      | (261,161    | )
|                                                                                  |  |                              |             |   |      |             |  
|Net cash used in investing activities                                             |  |                              | (20,819,098 | ) |      | (3,610,703  | )
|                                                                                  |  |                              |             |   |      |             |  
|                                                                                  |  |                             
|Cash flows from financing activities:                                             |  |                              |             |   |      |             |  
|Net increase in savings and demand deposit accounts                               |  |                              | 11,519,215  |   |      | 3,333,302   |  
|Net increase (decrease) in certificates of deposit                                |  |                              | 26,183,169  |   |      | (737,820    | )
|Net decrease in securities sold under agreements to repurchase                    |  |                              | (1,566,782  | ) |      | (205,270    | )
|Proceeds from the issuance of trust preferred securities                          |  |                              | 4,500,000   |   |      |            |  
|Dividends paid                                                                    |  |                              | (88,196     | ) |      | (73,338     | )
|Common stock issued through exercise of options                                   |  |                              | 19,977      |   |      | 7,773       |  
|Common stock repurchased                                                          |  |                              |            |   |      | (12,248     | )
|                                                                                  |  |                              |             |   |      |             |  
|Net cash provided by financing activities                                         |  |                              | 40,567,383  |   |      | 2,312,399   |  
|                                                                                  |  |                              |             |   |      |             |  
|Increase (decrease) in cash and cash equivalents                                  |  |                              | 19,187,917  |   |      | (184,468    | )
|                                                                                  |  |                             
|Cash and cash equivalents at beginning of period                                  |  |                              | 14,005,728  |   |      | 22,698,187  |  
|                                                                                  |  |                              |             |   |      |             |  
|Cash and cash equivalents at end of period                                        |  | $                            | 33,193,645  |   |      | 22,513,719  |  
|                                                                                  |  |                              |             |   |      |             |  
|Supplemental disclosure of cash flow information:                                 |  |                              |             |   |      |             |  
|Interest paid                                                                     |  | $                            | 1,199,805   |   |      | 1,217,724   |  
|                                                                                  |  |                              |             |   |      |             |  
|Income taxes paid                                                                 |  | $                            | 560,000     |   |      | 27,500      |  
|                                                                                  |  |                              |             |   |      |             |  

See accompanying notes to unaudited consolidated financial statements.



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##### Table of Contents

CCF HOLDING COMPANY AND SUBSIDIARY

Notes to Consolidated Financial Statements

(Unaudited)



|1. | Basis of Presentation
|-- | ---------------------



The consolidated financial statements for the three-month periods ended March 31, 2004 and 2003 are not audited and reflect all adjustments (consisting only of normal
recurring accruals) which are, in the opinion of management, necessary for a fair presentation of the financial position, operating results, and cash flows for the interim periods. Accordingly, they do not include all information and disclosures
required by generally accepted accounting principles for complete financial statements.



The results of operations for the three-month period ended March 31, 2004, are not necessarily indicative of the results for the entire year ending December 31, 2004.



|2. | Stock Compensation Plans
|-- | ------------------------



Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation, encourages all entities to adopt a fair value based method of
accounting for employee stock compensation plans, whereby compensation expense is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. However, it also allows an
entity to continue to measure compensation cost for those plans using the intrinsic value based method of accounting prescribed by Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, whereby compensation
cost is the excess, if any, of the quoted market price of the stock at the grant date (or other measurement date) over the amount an employee must pay to acquire the stock. Under Opinion No. 25, stock options issued under the Companys stock
option plan have no intrinsic value at the grant date and, as such, no compensation cost is recognized. The Company has elected to continue with the accounting methodology in Opinion No. 25 and, as such, has provided pro forma disclosures of net
earnings and earnings per share and other disclosures, as if the fair value method of accounting had been applied. Had compensation cost for the plan been determined based upon the fair value of the options at the grant dates, the Companys net
earnings and net earnings per share for the period ended March 31, 2004, and 2003, would have been reduced to the pro forma amounts indicated below:



|                           |  |             |  |      |         |      |        
|-------------------------- |  | ----------- |  | ---- | ------- | ---- | -------
|                           |  |             |  | 2004 |         | 2003
|Net earnings               |  | As reported |  | $    | 583,308 |      | 560,937
|                           |  | Pro forma   |  | $    | 579,695 |      | 556,819
|                           |  |             | 
|Basic earnings per share   |  | As reported |  | $    | .40     |      | .38    
|                           |  | Pro forma   |  | $    | .40     |      | .38    
|                           |  |             | 
|Diluted earnings per share |  | As reported |  | $    | .38     |      | .35    
|                           |  | Pro forma   |  | $    | .36     |      | .35    



The difference between the net
earnings as reported and pro forma is the expense associated with the option grants, which would have been earned in the period. This expense was calculated based on the number of options vested during the period multiplied by the fair value of the
respective option at the time of grant, net of tax effect. No options have been granted since December 31, 2003.



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3. Accounting Policies



Reference is made to the accounting policies of the Company described in the notes to the
consolidated financial statements contained in the Companys Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003, filed with the Securities and Exchange Commission.



4. Reclassification



Certain amounts in the prior period financial statements have been reclassified to conform
to the presentation used in the current period unaudited consolidated financial statements.



5. Earnings per share



Basic earnings per share are based on the weighted average number of common shares outstanding during the period while the effects of potential shares outstanding during
the period are included in diluted earnings per share. The reconciliation of the amounts used in the computation of both basic earnings per share and diluted earnings per share for each period is presented as follows:



For the three-months ended March 31, 2004



|                                           |  |             |         |              |           |                 |   |       |  
|------------------------------------------ |  | ----------- | ------- | ------------ | --------- | --------------- | - | ----- | -
|                                           |  | NetEarnings |         | CommonShares |           | Per ShareAmount |  
|Basic earnings per share                   |  | $           | 583,308 |              | 1,467,962 |                 | $ | 0.40  |  
|Effect of dilutive common stock issuances: |  |             |         |              |           |                 |   |       |  
|Stock options                              |  |             |        |              | 162,806   |                 |   | (0.04 | )
|                                           |  |             |         |              |           |                 |   |       |  
|Diluted earnings per share                 |  | $           | 583,308 |              | 1,630,768 |                 | $ | 0.36  |  
|                                           |  |             |         |              |           |                 |   |       |  



For the three-months
ended March 31, 2003



|                                           |  |             |         |              |           |                 |   |       |  
|------------------------------------------ |  | ----------- | ------- | ------------ | --------- | --------------- | - | ----- | -
|                                           |  | NetEarnings |         | CommonShares |           | Per ShareAmount |  
|Basic earnings per share                   |  | $           | 560,937 |              | 1,467,957 |                 | $ | 0.38  |  
|Effect of dilutive common stock issuances: |  |             |         |              |           |                 |   |       |  
|Stock options                              |  |             |        |              | 119,693   |                 |   | (0.03 | )
|                                           |  |             |         |              |           |                 |   |       |  
|Diluted earnings per share                 |  | $           | 560,937 |              | 1,586,650 |                 | $ | 0.35  |  
|                                           |  |             |         |              |           |                 |   |       |  



6.
Dividends Payable



On March 17, 2004, the Company declared a $0.06
dividend per share to shareholders of record on April 2, 2004, with a payment date of April 19, 2004.



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##### Table of Contents

Item 2. Managements Discussion and Analysis or Plan of Operation



CCF Holding Company (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 report on Form 10-QSB), in its reports to stockholders 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 these important factors are not exclusive. 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.



Comparison of Financial Condition at March 31, 2004 and December 31, 2003



Assets - The Companys total assets increased by 13.5%, or $40.0 million, between December 31, 2003, and March 31, 2004. Net loans receivable increased
8.2% to $247 million at March 31, 2004, up $18.7 million from $228.3 million at December 31, 2003. The Companys loan growth includes approximately $9.1 million in commercial and commercial real estate loans and $1.7 million in construction
real estate loans, partially offset by a decrease in the outstanding balances of indirect and other consumer loans of $1.8 million. The increase in the loan growth during the first quarter is a reflection of current loan demand in our market
combined with the production generated by three loan officers added to our staff during the last quarter of 2003.



Federal funds sold increased $18.8 million in the three-month period ending March 31, 2004. This increase was due to a campaign to raise certificates of deposit to be
used to support loan growth and provide additional funds needed to improve the Banks liquidity position.



Liabilities - Total deposits during the three-months ended March 31, 2004, grew to $287.3 million, an increase of $37.7 million, or 15.1%, from $249.6 million at December 31, 2003. Deposit growth in transaction
accounts, which include non-interest bearing demand deposit accounts, NOW accounts and money market accounts, increased to $129.5 million, an increase of $11.3 million or 9.6% from $118.2 million at December 31, 2003. Heritage Bank, a commercial
bank chartered by the State of Georgia and a



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wholly owned subsidiary of the Company (the Bank), continues to stress transaction account growth in its
marketing strategy. Time deposits increased during the three-month period from $123.7 million at December 31, 2003, to $149.9 million at March 31, 2004, an increase of 21.1%, or $26.2 million. This increase was necessary to fund loan growth and
improve the Banks liquidity position. Certificates of deposit were raised locally through a campaign, which generated $10 million in time deposits. This was supplemented by $23 million in certificates of deposits generated nationally from
financial institutions, partially offset by liquidations in the normal course of business. These certificates are of one year or less in maturity and provide funding at a lower rate than local certificate campaign require. Repurchase accounts
decreased during the period by $1.6 million, or 48.7%, from $3.2 million at December 31, 2003, to $1.7 million at March 31, 2004.



On March 30, 2004, the Company completed its second offering of subordinated debentures. This increased the balance of subordinated debentures from $4.0 million at
December 31, 2003, to $8.5 million at March 31, 2004. See Part II, Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities elsewhere in this report.



Shareholders Equity - Shareholders equity increased $649,000, or 3.3%,
from $19.7 million at December 31, 2003, to $20.3 million at March 31, 2004. This increase was the result of the net income of $583,000 in the first quarter of 2004, as well as an increase in the accumulated other comprehensive income of $134,000,
which was partially offset by the declaration of a $0.06 per share dividend totaling $88,000. The ratio of shareholders equity as a percentage of total assets was 6.1% at March 31, 2004. At December 31, 2003, the ratio was 6.7%. Book value per
share increased from $13.39 at December 31, 2003, to $13.83 at March 31, 2004. This increase is primarily attributable to the net income for the first quarter of 2004.



Comparison of Operating Results for the Three-months Ended March 31, 2004 and March 31, 2003



Net Earnings- The Company had net earnings of $583,000 for the three-month period
ended March 31, 2004, compared to net earnings of $561,000 in the same three-month period in 2003. This represents an increase in net earnings of $22,000, or 4.0%.



Net Interest Income - Net interest income for the three-month period ended March 31, 2004, increased from $2.6 million in 2003, to
$3.2 million for the same period in 2003. Interest expense decreased $55,000 from $1.3 million in the period ending March 31, 2003, to $1.2 million for the three-month period ended March 31, 2004. The decrease is due primarily to the overall decline
in interest rates and the continuing repricing of certificates of deposits during the last twelve-month period. This was partially offset by the increase in the Federal Home Loan Bank (FHLB) interest expense on advances from $96,000 in the period
ending March 31, 2003, to $139,000 in the period ending March 31, 2004. FHLB advances increased from $5 million at March 31, 2003, to $15 million at March 31, 2004. The Bank borrowed the additional $10 million in July 2003 to provide funding for
loan growth. The recovery from the declines in interest rates, when combined with the shift in deposit categories, increased the margin in the quarter ending March 31, 2004, to 4.30%, from 4.25% in the quarter ended March 31, 2003. In the
short-term, due to a negative gap, the Bank would experience a decline in net interest income during a rising rate environment. The effect of such a decline, if it occurs, would be minimal, as most of the Banks deposits and loans have already
repriced.



Provision for Loan Losses - The Banks provision for
loan losses increased for the three-month period ended March 31, 2004, to $290,000 from $135,000 in the period ending March 31, 2003.The loan loss reserve balance at March 31, 2004, was $2.9 million or 1.16% of loans outstanding. For the
period ending March 31, 2003, the loan loss reserve was $2.8 million or 1.41% of loans outstanding. The balance in the loan loss reserve did not increase substantially despite the increased allocations discussed above due primarily to the charge off
of two commercial loans in the third quarter of 2003 that had been restructured



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and carried as non-performing since September 2002. One of these loans continues to pay as agreed under the restructure,
but will now be handled as a recovery. The second loan was charged-off as a part of a negotiated settlement.



Based on the Banks internal calculation the allowance for loan losses is adequate but additional provisions, which exceed budgeted provisions, may be required during the remainder of 2004 due to the growth in
loans experienced in the last six months. Management will continue to monitor and adjust the allowance as necessary during the year based on growth in the loan portfolio, loss experience, workout of non-performing loans, condition of borrowers, and
continued monitoring of local economic conditions, as well as, any other external factors.



Non-performing loans totaled $4.3 million at March 31, 2004, which equaled 1.7% of loans outstanding. This compares to $933,000, or 0.46% at March 31, 2003. The increase in non-performing loans is primarily due to the
Bank purchasing the note of another lender in January 2004 totaling $1.4 million which is secured by a lien on commercial real estate that also secures another note held by the Bank. The note already held by the Bank in the amount of $1.3 million
was reported as a non-performing asset in the Companys press release dated January 12, 2004. Based on current appraisals of this property, the Bank does not expect a substantial loss although the Bank can offer no assurances. Both notes are
currently non-performing on the Banks books. In addition to the above mentioned relationship, the Bank has another lending relationship totaling $1.3 million that has been in a workout status for several months that was moved to non-performing
late during the first quarter of 2004. This relationship is also secured by real estate and based on appraisals the Bank expects little, if any loss.



Other Income - Service charges on deposit accounts increased $45,000, or 20.9% from $216,000 at March 31, 2003 to $262,000 for the same three-month period ending
March 31, 2004. Other income for the three-month period ending March 31, 2003, includes a net gain of $34,000 on the sale of an investment security and net gains of $16,000 were recognized on sale of loans. In contrast, the period ending March 31,
2004, had net gains of $1,000 on the sale of investment securities. Additionally, other income for each period includes income on bank owned life insurance of $70,000.



Other Expenses - Other expenses for the three-month period ended March 31, 2004, increased $335,000, or 16.1%, from $2.1 million for
the three-month period ended March 31, 2003, to $2.4 million for the same period in 2004. Salaries and employee benefits increased to $1.5 million for the three-month period ended March 31, 2004, compared to $1.2 million during the same three-month
period in 2003, an increase of $256,000 or 21.2%. Salaries increased $135,000, or 15.7%, for the period ending March 31, 2004, due in part to the opening of the Heritage Plaza branch on Highways 20 & 81 in McDonough Georgia in August 2003.
Additional increases in salaries are due to annual raises, which averaged 3%, and the hiring of three loan production officers in the last quarter of 2003. Expenses related to employee group insurance increased $34,000, or 44.3%, for the period
ending March 31, 2004, over the period ending March 31, 2003. The increase in expenses related to the deferred compensation benefit was due to a change in accounting. The Bank had been accounting for the expense based on the amount payable to the
participant as of the end of the reporting period. Under the revised accounting, required by the Banks regulators, the aggregate liability must be recognized over the expected service period of the employee. As a result of the change in
accounting, the Bank recognized an increase in expense of $48,000.



Liquidity - The Banks short-term liquidity was 18.03% on March 31, 2004. The Bank is required to maintain minimum levels of liquid assets as defined by the State of Georgia and the Federal Deposit Insurance Corporation
regulations. The Bank continues to search for deposits and other means of meeting its loan demand. The Bank adjusts its liquidity level as appropriate to meet its asset/liability objectives. The primary sources of funds are deposits, amortization
and prepayments of loans and mortgage-backed securities, maturity of investments, and funds provided from operations. As an alternative to supplement



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liquidity needs, the Bank has the ability to borrow from the Federal Home Loan Bank of Atlanta and other correspondent
banks. These commitments totaled $52.3 million at March 31, 2004, with $15.0 million drawn. Scheduled loan amortization and maturing investment securities are a relatively predictable source of funds, however, deposit flow and loan prepayments are
greatly influenced by, among other things, market interest rates, economic conditions, and competition. The Banks liquidity, represented by cash, cash equivalents, and securities available for sale, is a product of its operating, investing,
and financing activities.



Capital Ratios Quantitative measures
established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. As of March 31, 2004, the most
recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management
believes have changed the Banks capital category.



As of March 31, 2004,
total risk based capital ratios were 10.03% for the Bank and 11.98% for the consolidated company. Tier 1 capital to risk weighted assets was 8.93% for the Bank and 10.17% for the consolidated company. The Tier 1 capital to average asset ratio
(leverage ratio) was 7.52% for the Bank and 8.59% for the consolidated company.



Item 3. Controls And Procedures



Within the 90-day
period prior to the date of this report, the Company, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design
and operation of the Companys disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that material
information relating to the Company, including our consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which this quarterly report was being prepared. There were no significant changes
in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation.



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PART II. OTHER INFORMATION



Item 1. Legal Proceedings



None.



Item 2. Changes in Securities and Small Business Issuer Purchases of Equity Securities



On March 30, 2004, the Company, through a subsidiary, completed a private placement of $4,500,000 of floating rate trust preferred securities (the Capital
Securities).



In that offering:



| | (1) | The Company organized CCF Capital Trust II, a Delaware statutory trust (the Trust). The Trust is governed by an Amended and Restated Trust Agreement dated March 30,
2004, by and among the Company, as Depositor, Wilmington Trust Company, as Property and Delaware Trustee (the Trustee), and the administrators of the Trust named in the Amended and Restated Trust Agreement.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | The Company issued and sold to the Trust approximately $4,500,000 in aggregate principal amount of its unsecured junior subordinated debentures, which were issued under a Junior
Subordinated Indenture dated as of March 30, 2004, by and between the Company and Wilmington Trust Company, as Trustee (the Indenture).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | The Trust issued and sold to outside investors $4,640,000 of Capital Securities with a maturity date of March 30, 2034 and a liquidation value of $50,000 per Capital Security.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | The Trust issued and sold to the Company $140,000 of its common securities, making the Company the only holder of the Trusts common securities.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | The Trust used the proceeds from the sale of the Capital Securities and the common securities to purchase the junior subordinated debentures from the Company.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Under a Guarantee Agreement dated as of March 30, 2004, by and between the Company, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee, the Company fully and
unconditionally guaranteed the payments of all amounts due on the Capital Securities, except that the Companys guarantee is limited to the extent the Trust actually has funds available for payment of distributions and does not apply where the
Trust does not have sufficient funds to make payments on the preferred capital securities.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Both the junior subordinated debentures that the Company issued and the Capital Securities and common securities that the Trust issued bear interest at a floating rate equal to the prime rate of interest as announced
in the Money Rates section of Eastern Edition of The Wall Street Journal plus 12.5 basis points, payable quarterly on the last business day of each March, June, September and December, with a maturity of December 31, 2034. When the Company makes
principal and interest payments to the Trust, as the holder of the junior subordinated debenture, the Trust, in turn makes payment of principal and interest to holders of the Capital Securities and common securities.



The Company received $4,500,000 of gross proceeds from the transaction, and $4,385,125 in net
proceeds. The Capital Securities were issued and sold only to accredited investors, as such term is defined in Rule 501(a) promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the
Securities Act). The Company and the Trust relied on the exemption from registration provided by Section 4(2) of the Securities Act in reliance upon Rule 506 of Regulation D there under.



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Item 3. Defaults Upon Senior Securities



None.



Item 4. Submission of Matters to a Vote of Security Holders



None.



Item 5. Other Information



None.



Item 6. Exhibits and Reports on Form 8-K



(a) Exhibits



| | 10.1 | Amended and Restated Trust Agreement dated as of March 30, 2004, by and among the Company, as Depositor, Wilmington Trust Company, as Property and Delaware Trustee
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 10.2 | Guarantee Agreement dated as of March 30, 2004, by and between the Company, as Guarantor, and Wilmington Trust Company, as Guarantee Trustee
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------



| | 10.3 | Junior Subordinated Indenture dated as of March 30, 2004, by and between the Company and Wilmington Trust Company, as Trustee
| | ---- | -----------------------------------------------------------------------------------------------------------------------------



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



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



| | 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Reports on Form 8-K
| | --- | -------------------



On January 15, 2004, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K, which included as an exhibit thereto the
Companys press release dated January 13, 2004 providing its then current expectations for its financial performance for the quarter ended December 31, 2003, including total assets, net income, basic earnings per share, net interest margin,
efficiency ratios, total loans (at end of period), non-performing loans (at end of period), loan loss provision, loan loss reserve (at end of period) and consolidated equity (at end of period). The information contained in the Current Report on Form
8-K was furnished to the Securities and Exchange Commission pursuant to Item 12 of Form 8-K.



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CCF HOLDING COMPANY AND SUBSIDIARY



SIGNATURES



In accordance with the requirements of the
Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



CCF HOLDING COMPANY



|                   |  |     |  |                        
|------------------ |  | --- |  | -----------------------
|Date: May 14, 2004 |  | BY: |  | /s/David B. Turner     
|                   |  |     |  | David B. Turner        
|                   |  |     |  | President and          
|                   |  |     |  | Chief Executive Officer
|                   |  |    
|Date: May 14, 2004 |  | BY: |  | /s/ Mary Jo Rogers     
|                   |  |     |  | Mary Jo Rogers         
|                   |  |     |  | Sr. Vice President and 
|                   |  |     |  | Chief Financial Officer



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