U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year Commission file number
ended December 31, 1996
FIRST GEORGIA COMMUNITY CORP.
(Name of small business issuer in its charter)
Georgia 58-2261088
(State of Incorporation) (I.R.S. Employer
Identification No.)
155-B Lyons Street
P. O. Box 1534
Jackson, Georgia
30233
(Address of principal executive offices) (Zip Code)
(770) 504-1090
(Issuer's telephone number)
Securities Registered pursuant to Section 12(b) of the Exchange Act: None
Securities Registered pursuant to Section 12(g) of the Exchange Act: None
Check whether Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge, in definitive Proxy or
Information Statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]
Registrant's revenues for its fiscal year ended December 31, 1996 were
$461.00. Registrant was a developmental stage enterprise that as of
December 31, 1996 had no active business operations other than in
connection with its initial offering of the shares of its common stock.
The aggregate market value of the voting stock subscribed for by non-affiliates
of the Registrant at February 28, 1997 was $2,630,000 based on
the initial offering price of $10.00 per share, although there is no
established trading market.
The number of shares outstanding of Registrant's class of common stock at
February 28, 1997 was 1 share of common stock; the number of shares of
Registrant's common stock subscribed for at February 28, 1997 was 428,000
shares.
Documents Incorporated by Reference:
Transitional Small Business Disclosure Format (check one):
Yes No X
Page 1 of 36
Exhibit Index on Page 23
TABLE OF CONTENTS
PART I Page
ITEM 1. DESCRIPTION OF BUSINESS ......................... 3
ITEM 2. DESCRIPTION OF PROPERTIES........................ 12
ITEM 3. LEGAL PROCEEDINGS................................ 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS................................. 12
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS...................... 13
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION ............................ 13
ITEM 7. FINANCIAL STATEMENTS ............................ 14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE ............................ 14
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS ............................. 14
ITEM 10. EXECUTIVE COMPENSATION .......................... 18
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT ................ 21
ITEM 12. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS ............................ 22
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K ................ 22
SIGNATURES ................................................ 24
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(a) Business Development
First Georgia Community Corp. (the "Company"), Jackson, Georgia,
was incorporated as a Georgia business corporation for the purpose
of becoming a bank holding company by acquiring all of the common
stock of First Georgia Community Bank, Jackson, Georgia (the
"Bank") upon its formation. The Company filed applications to the
Board of Governors of the Federal Reserve System (the "Board") and
the Georgia Department of Banking and Finance (the "DBF") for prior
approval to become a bank holding company. The Company received
Board approval on December 24, 1996, and the DBF approval on
December 3, 1996. The Company will become a bank holding company
within the meaning of the federal Bank Holding Company Act (the
"Act") and the Georgia bank holding company law (the "Georgia Act")
upon the acquisition of all of the Common Stock of the Bank, which
is projected to occur by May 1, 1997.
The Bank will be the sole operating subsidiary of the Company. On
October 11, 1996, the Bank received the approval of its Articles of
Incorporation from the DBF, and its permit to begin business has
not been issued yet, since the Bank has not been capitalized due to
the pendency of the offering. The Bank expects to open for
business by the 3rd quarter of 1997. The deposits at the Bank will
be insured by the Federal Deposit Insurance Corporation (the
"FDIC"), initial approval by the FDIC having been obtained on
September 30, 1996.
In October, 1996, the Company registered 800,000 shares of its
common stock with the Securities and Exchange Commission under the
Securities Act of 1933. The registration statement became
effective on December 11, 1996, and the Company began its stock
offering a few days later. The stock offering is still under way,
and the Company expects to complete the offering by May 1, 1997.
As of February 28, 1997, the Company had subscriptions for 428,000
shares. The subscription agreements with full payment for the
subscribed stock are presently held in escrow by The Bankers Bank,
Atlanta, Georgia. Subscriptions for a minimum of 610,000 shares
are required in order to release the subscription agreements and
proceeds from escrow.
(b) Business of Issuer
The Bank intends to conduct a general commercial banking business
in its primary service area, emphasizing the banking needs of
individuals and small- to medium-sized businesses. The Company is
now conducting business from a temporary office located at 150
Covington Street, Jackson, Georgia 30233. The Company was a
developmental stage enterprise that as of December 31, 1996, had no
active business operations other than in connection with its
initial offering of the shares of its common stock.
The Company is authorized to engage in any activity permitted by
law to a corporation, subject to applicable Federal regulatory
restrictions on the activities of bank holding companies. The
Company was formed for the purpose of becoming a holding company to
own 100% of the stock of the Bank. The holding company structure
provides the Company with greater flexibility than the Bank. While
the Company has no present plans to engage actively in any
nonbanking business activities, management anticipates studying the
feasibility of establishing or acquiring subsidiaries to engage in
other business activities to the extent permitted by law.
The principal business of the Bank will be to accept deposits from
the public and to make loans and other investments in and around
Butts County, Georgia, as well as the geographically adjacent
counties, its primary service area.
The Bank will offer a full range of deposit services that are
typically available from financial institutions. The Bank plans to
offer personal and business checking accounts, interest-bearing
checking accounts, savings accounts, money market funds and various
types of certificates of deposit. The Bank also plans to offer
installment loans, real estate loans, second mortgage loans,
commercial loans and home equity lines of credit. In addition, the
Bank intends to provide such services as official bank checks and
money orders, Mastercard and VISA credit cards, safe deposit boxes,
traveler's checks, bank by mail, direct deposit of payroll and
social security checks, and US Savings Bonds. All deposit accounts
are insured by the FDIC up to the maximum amount currently
permitted by law.
The Bank's lending philosophy will be to make loans, taking into
consideration the safety of the Bank's depositors' funds, the
preservation of the Bank's liquidity, the interest of the Company's
shareholders, and the welfare of the community. Interest income
from the Bank's lending operations will be the principal component
of the Bank's income, so therefore prudent lending will be
essential for the prosperity of the Bank.
The principal sources of income for the Bank will be interest and
fees collected on loans, interest and dividends collected on other
investments, and mortgage brokerage fees. The principal expenses
of the Bank will be interest paid on deposits, employee
compensation, office expenses, and other overhead expenses.
The Bank's business plan for its initial years of operation will
rely principally upon local advertising and promotional activity
and upon personal contacts by its directors, officers and
shareholders to attract business and to acquaint potential
customers with the Bank's personalized services. The Bank intends
to emphasize a high degree of personalized client service in order
to be able to provide for each customer's banking needs. The
Bank's marketing approach will emphasize the advantages of dealing
with an independent, locally-owned and managed state chartered bank
to meet the particular needs of individuals, professionals and
small-to-medium-size businesses in the community. All banking
services will be continually evaluated with regard to their
profitability and efforts will be made to modify the Bank's
business plan if the Bank does not prove successful. The Bank will
not initially offer trust or permissible securities services.
Supervision and Regulation
Regulation of the Bank. The operations of the Bank will be subject
to state and federal statutes applicable to state chartered banks
whose deposits are insured by the FDIC and the regulations of the
DBF and the FDIC. Such statutes and regulations relate to, among
other things, required reserves, investments, loans, mergers and
consolidations, issuances of securities, payment of dividends,
establishment of branches and other aspects of the Bank's
operations. Under the provisions of the Federal Reserve Act, the
Bank will be subject to certain restrictions on any extensions of
credit to the Company or, with certain exceptions, other
affiliates, and on the taking of such stock or securities as
collateral on loans to any borrower. In addition, the Bank will be
prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit or the providing of any
property or service.
The Bank, as a state chartered bank, will be permitted to branch
only to the extent that banks are permitted to branch under Georgia
law. In January 1996, the Georgia legislature passed a bill
designed to eliminate Georgia's current intra-county branching
restrictions. The new legislation provides that effective after
July 1, 1996, banks in Georgia, with prior approval of the DBF (and
the appropriate federal regulatory authority), may establish
additional branches in up to three new counties in the state per
year. On July 1, 1998, full statewide branching goes into effect
as Georgia banks may establish new branches in any county in the
state with prior approval of the appropriate regulatory
authorities.
The FDIC adopted final risk-based capital guidelines for all FDIC
insured state chartered banks that are not members of the Federal
Reserve System effective December 31, 1990. As of December 31,
1992, all banks are required to maintain a minimum ratio of total
capital to risk weighted assets of 8 percent (of which at least 4
percent must consist of Tier 1 capital). Tier 1 capital of state
chartered banks (as defined in regulations) generally consists of
(i) common stockholders equity; (ii) noncumulative perpetual
preferred stock and related surplus; and (iii) minority interests
in the equity accounts of consolidated subsidiaries.
In addition, the FDIC adopted a minimum ratio of Tier 1 capital to
total assets of banks. This capital measure is generally referred
to as the leverage capital ratio. The FDIC has established a
minimum leverage capital ratio of 3 percent if the FDIC determines
that the institution is not anticipating or experiencing
significant growth and has well-diversified risk, including no
undue interest rate exposure, excellent asset quality, high
liquidity, good earnings and, in general, is considered a strong
banking organization, rated Composite 1 under the Uniform Financial
Institutions Rating System. Other financial institutions are
expected to maintain leverage capital at least 100 to 200 basis
points above the minimum level. Management intends to operate the
Bank so as to exceed the minimum Tier 1, risk-based and leverage
capital ratios.
Bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations, including
a proposal to add an interest rate risk component to risk-based
capital requirements.
The Federal Deposit Insurance Corporation Improvement Act of
1991, enacted in December 1991 ("FDICIA"), specifies, among other
things, the following five capital standard categories for
depository institutions: (i) well capitalized, (ii) adequately
capitalized, (iii) undercapitalized, (iv) significantly under-capitalized
and (v) critically undercapitalized. FDICIA imposes
progressively more restrictive constraints on operations,
management and capital distributions depending on the category in
which an institution is classified. Each of the federal banking
agencies has issued final uniform regulations that became effective
December 19, 1992, which, among other things, define the capital
levels described above. Under the final regulations, a bank is
considered "well capitalized" if it (i) has a total risk-based
capital ratio of 10% or greater, (ii) has a Tier 1 risk-based
capital ratio of 6% or greater, (iii) has a leverage ratio of 5% or
greater, and (iv) is not subject to any order or written directive
to meet and maintain a specific capital level for any capital
measure. An "adequately capitalized" bank is defined as one that
has (i) a total risk-based capital ratio of 8% or greater, (ii) a
Tier 1 risk-based capital ratio of 4% or greater and (iii) a
leverage ratio of 4% or greater, and an "undercapitalized" bank is
defined as one that has (i) a total risk-based capital ratio of
less than 8%, (ii) a Tier 1 risk-based capital ratio of less than
4%, and (iii) a leverage ratio of less than 4%. A bank is
considered "significantly undercapitalized" if the bank has (i) a
total risk-based capital ratio of less than 6%, (ii) a Tier 1 risk-based
capital ratio of less than 3%, and (iii) a leverage ratio of
less than 3%, and "critically undercapitalized" if the bank has a
ratio of tangible equity to total assets equal to or less than 2%.
The applicable federal regulatory agency for a bank that is "well
capitalized" may reclassify it as an "adequately capitalized" or
"undercapitalized" institution and subject it to the supervisory
actions applicable to the next lower capital category, if it
determines that the Bank is in an unsafe or unsound condition or
deems the bank to be engaged in an unsafe or unsound practice and
not to have corrected the deficiency.
"Undercapitalized" depository institutions, among other
things, are subject to growth limitations, are prohibited, with
certain exceptions, from making capital distributions, are limited
in their ability to obtain funding from a Federal Reserve Bank and
are required to submit a capital restoration plan. The federal
banking agencies may not accept a capital plan without determining,
among other things, that the plan is based on realistic assumptions
and is likely to succeed in restoring the depository institution's
capital. In addition, for a capital restoration plan to be
acceptable, the depository institution's parent holding company
must guarantee that the institution will comply with such capital
restoration plan and provide appropriate assurances of performance.
If a depository institution fails to submit an acceptable plan,
including if the holding company refuses or is unable to make the
guarantee described in the previous sentence, it is treated as if
it is "significantly undercapitalized". Failure to submit or
implement an acceptable capital plan also is grounds for the
appointment of a conservator or a receiver. "Significantly
undercapitalized" depository institutions may be subject to a
number of additional requirements or restrictions, including the
requirement to issue additional voting stock to become adequately
capitalized and requirements to reduce total assets and cessation
of receipt of deposits from correspondent banks. "Critically
undercapitalized" institutions, among other things, are prohibited
from making any payments of principal and interest on subordinated
debt, and are subject to the appointment of a receiver or
conservator.
Under FDICIA, the FDIC is permitted to provide financial
assistance to an insured bank before appointment of a conservator
or receiver only if (i) such assistance would be the least costly
method of meeting the FDIC's insurance obligations, (ii) grounds
for appointment of a conservator or a receiver exist or are likely
to exist, (iii) it is unlikely that the bank can meet all capital
standards without assistance and (iv) the bank's management has
been competent, has complied with applicable laws, regulations,
rules and supervisory directives and has not engaged in any insider
dealing, speculative practice or other abusive activity.
The Bank will be subject to FDIC deposit insurance assessments
for the Bank Insurance Fund ("BIF"). The FDIC has implemented a
risk-based assessment system whereby banks are assessed on a
sliding scale depending on their placement in nine separate
supervisory categories. Recent legislation provides that BIF
insured institutions, such as the Bank, will share the Financial
Corporation ("FICO") bond service obligation. Previously, only
Savings Association Insurance Fund ("SAIF") insured institutions
were obligated to contribute to the FICO bond service. The BIF
deposit insurance premium for the Bank will initially be 4.3 cents
per $100 of BIF insured deposits.
On April 19, 1995, the federal bank regulatory agencies
adopted uniform revisions to the regulations promulgated pursuant
to the Community Reinvestment Act (the "CRA"), which are intended
to set standards for financial institutions. The revised
regulation contains three evaluation tests: (a) a lending test
which will compare the institution's market share of loans in low
and moderate income areas to its market share of loans in its
entire service area and the percentage of a bank's outstanding
loans to low and moderate income areas or individuals, (b) a
services test which will evaluate the provision of services that
promote the availability of credit to low and moderate income
areas, and (c) an investment test, which will evaluate an
institution's record of investments in organizations designed to
foster community development, small and minority owned businesses
and affordable housing lending, including state and local
government housing or revenue bonds. The regulation is designed to
reduce the paperwork requirements of the current regulations and
provide regulatory agencies, institutions, and community groups
with a more objective and predictable manner with which to evaluate
the CRA performance of financial institutions. The rule became
effective on January 1, 1996 when evaluation under streamlined
procedures began for institutions with total assets of less than
$250 million that are owned by a holding company with total assets
of less than $1 billion.
Congress and various federal agencies (including, in addition
to the bank regulatory agencies, the Department of Housing and
Urban Development, the Federal Trade Commission and the Department
of Justice (collectively, the "Federal Agencies") responsible for
implementing the nation's fair lending laws have been increasingly
concerned that prospective home buyers and other borrowers are
experiencing discrimination in their efforts to obtain loans. The
Department of Justice has filed suit against financial institutions
which it determined had discriminated, seeking fines and
restitution for borrowers who allegedly suffered from
discriminatory practices. Most, if not all, of these suits have
been settled (some for substantial sums) without a full
adjudication on the merits.
On March 8, 1994, the Federal Agencies, in an effort to
clarify what constitutes discrimination in lending and to specify
the factors the agencies will consider in determining if lending
discrimination exists, announced a joint policy statement detailing
specific discriminatory practices prohibited under the Equal Credit
Opportunity Act and the Fair Housing Act. In the policy statement,
three methods of establishing discrimination in lending were
identified: (a) overt evidence of discrimination, when a lender
blatantly discriminates on a prohibited basis, or (b) where there
is no showing that the treatment was motivated by intent to
discriminate against a person, and (c) evidence of disparate
impact, when a lender applies a practice uniformly to all
applicants, but the practice has a discriminatory effect on a
protected class, even where such practices are neutral on their
face and are applied equally, unless the practice can be justified
on the basis of business necessity.
Regulation of the Company. The Company is a bank holding company
with the meaning of the Federal Bank Holding Company Act (the
"Act") and the Georgia bank holding company law (the "Georgia
Act"). As a bank holding company, the Company is required to file
with the Federal Reserve Board (the "Board") an annual report and
such additional information as the Board may require pursuant to
the Act. The Board may also make examinations of the Company and
each of its subsidiaries. Bank holding companies are required by
the Act to obtain approval from the Board prior to acquiring,
directly or indirectly, ownership or control of more than 5% of the
voting shares of a bank.
The Act also prohibits bank holding companies, with certain
exceptions, from acquiring more than 5% of the voting shares of any
company that is not a bank and from engaging in any nonbanking
business (other than a business closely related to banking as
determined by the Board) or from managing or controlling banks and
other subsidiaries authorized by the Act or furnishing services to,
or performing services for, its subsidiaries without the prior
approval of the Board. The Board is empowered to differentiate
between activities that are initiated de novo by a bank holding
company or a subsidiary and activities commenced by acquisition of
a going concern. The Company has no present intention to engage in
nonbanking activities.
As a bank holding company, the Company is subject to capital
adequacy guidelines as established by the Board. The Board
established risk based capital guidelines for bank holding
companies effective March 15, 1989. Beginning on December 31,
1992, the minimum required ratio for total capital to risk weighted
assets became 8 percent (of which at least 4 percent must consist
of Tier 1 capital). Tier 1 capital (as defined in regulations of
the Board) consists of common and qualifying preferred stock and
minority interests in equity accounts of consolidated subsidiaries,
less goodwill and other intangible assets required to be deducted
under the Board's guidelines. The Board's guidelines apply on a
consolidated basis to bank holding companies with total
consolidated assets of $150 million or more. For bank holding
companies with less than $150 million in total consolidated assets
(such as the Company), the guidelines will be applied on a bank
only basis, unless the bank holding company is engaged in
nonbanking activity involving significant leverage or has
significant amount of debt outstanding that is held by the general
public. The Board has stated that risk based capital guidelines
establish minimum standards and that bank holding companies
generally are expected to operate well above the minimum standards.
The Company is also a bank holding company within the meaning of
the Georgia Act, which provides that, without the prior written
approval of the DBF, it is unlawful (i) for any bank holding
company to acquire direct or indirect ownership or control of more
than 5% of the voting shares of any bank, (ii) for any bank holding
company or subsidiary thereof, other than a bank, to acquire all or
substantially all of the assets of a bank, or (iii) for any bank
holding company to merge or consolidate with any other bank holding
company.
It is also unlawful for any company to acquire direct or indirect
ownership or control of more than 5% of the voting shares of any
bank in Georgia unless such bank has been in existence and
continuously operating or incorporated as a bank for a period of
five years or more prior to the date of application to the DBF for
approval of such acquisition. Bank holding companies themselves
are prohibited from acquiring another bank until the initial bank
in the bank holding company has been incorporated for a period of
twenty-four months.
The Reigle-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Interstate Banking Act"), subject to certain
restrictions, allows adequately capitalized and managed bank
holding companies to acquire existing banks across state lines,
regardless of state statutes that would prohibit acquisitions by
out-of-state institutions. Further, effective June 1, 1997, a bank
holding company may consolidate interstate bank subsidiaries into
branches and a bank may merge with an unaffiliated bank across
state lines to the extent that the applicable states have not
"opted out" of interstate branching prior to such effective date.
Some states may elect to permit interstate mergers prior to June 1,
1997. The Interstate Banking Act generally prohibits an interstate
acquisition (other than the initial entry into a state by a bank
holding company) that would result in either the control of more
than (i) 10% of the total amount of insured deposits in the United
States, or (ii) 30% of the total insured deposits in the home state
of the target bank, unless such 30% limitation is waived by the
home state on a basis which does not discriminate against out-of-state
institutions. As a result of this legislation, the Company
may become a candidate for acquisition by, or may itself seek to
acquire, banking organizations located in other states.
The Reigle Community Development and Regulatory Improvement Act of
1994 (the "Improvement Act") provides for the creation of a
community development financial institutions' fund to promote
economic revitalization in community development. Banks and thrift
institutions are allowed to participate in such community
development banks. The Improvement Act also contains (i)
provisions designed to enhance small business capital formation and
to enhance disclosure with regard to high cost mortgages for the
protection of consumers, and (ii) more than 50 regulatory relief
provisions that apply to banks and thrift institutions, including
the coordination of examinations by various federal agencies,
coordination of frequency and types of reports financial
institutions are required to file and reduction of examinations for
well capitalized institutions.
Bank holding companies may be compelled by bank regulatory
authorities to invest additional capital in the event a subsidiary
bank experiences either significant loan losses or rapid growth of
loans or deposits. In addition, the Company may be required to
provide additional capital to any additional banks it acquires as
a condition to obtaining the approvals and consents of regulatory
authorities in connection with such acquisitions.
The Company is and the Bank will be subject to the Federal Reserve
Act, Section 23A, which limits a bank's "covered transactions"
(generally, any extension of credit) with any single affiliate to
no more than 10% of a bank's capital and surplus. Covered
transactions with all affiliates combined are limited to no more
than 20% of a bank's capital and surplus. All covered and exempt
transactions between a bank and its affiliates must be on terms and
conditions consistent with safe and sound banking practices, and a
bank and its subsidiaries are prohibited from purchasing low
quality assets from the bank's affiliates. Finally, Section 23A
requires that all of a bank's extensions of credit to an affiliate
be appropriately secured by collateral. The Company is and the
Bank will also be subject to Section 23B of the Federal Reserve
Act, which further limits transactions among affiliates. Sections
22(b) and 22(h) of the Federal Reserve Act and implementing
regulations also prohibit extensions of credit by a state non-member bank
(such as the Bank) to its directors, officers and
controlling shareholders on terms which are more favorable than
those afforded other borrowers, and impose limits on the amounts of
loans to individual affiliates and all affiliates as a group.
The United States Congress and the Georgia General Assembly
periodically consider and adopt legislation that results in, and
could further result in, deregulation, among other matters, of
banks and other financial institutions. Such legislation could
modify or eliminate geographic restrictions on banks and bank
holding companies and current prohibitions restricting competition
with other financial institutions, including mutual funds,
securities brokerage firms, insurance companies, banks from other
states and investment banking firms. The effect of any such
legislation on the business of the Company or the Bank cannot be
accurately predicted. The Company cannot predict what legislation
might be enacted or what other implementing regulations might be
adopted, and if enacted or adopted, the effect thereof.
Competition
The banking business is highly competitive. The Bank will compete
with other commercial banks in its primary service area.
Banks generally compete with other financial institutions through
the banking products and services offered, the pricing of services,
the level of service provided, the convenience and availability of
services, and the degree of expertise and the personal manner in
which services are offered. The Bank expects to encounter strong
competition from most of the financial institutions in the Bank's
primary service area. In the conduct of certain areas of its
banking business, the Bank will also compete with credit unions,
consumer finance companies, insurance companies, money market
mutual funds and other financial institutions, some of which are
not subject to the same degree of regulation and restrictions
imposed upon the Bank. Many of these competitors have
substantially greater resources and lending limits than the Bank
will have and offer certain services, such as trust services, that
the Bank will not provide initially. Management believes that
competitive pricing and personalized service will provide it with
a method to compete effectively in the primary service area.
Employees
Upon commencement of operations, the Bank is expected to have
approximately 14 full-time employees. The Company is not expected
to have any employees who will not also be employees of the Bank.
The Company is not and the Bank will not be a party to any
collective bargaining agreement, and management believes the Bank
will enjoy satisfactory relations with its employees.
ITEM 2. DESCRIPTION OF PROPERTIES
The operations of the Company are temporarily being conducted in a
1,000 square foot office located at 155-B Lyons Street in Jackson,
Butts County, Georgia. The temporary office is leased by the
Company under a short term lease. The Company acquired a 2.5 acre
tract of land located at 150 Covington Street, Jackson, Georgia, in
January, 1997 for $395,000, as the site for its main office. The
Bank has not commenced banking activities.
The Bank's permanent quarters will consist of a two-story main
office with approximately 9,085 square feet of finished space to be
constructed by the Bank at the 150 Covington Street site. The main
office plans provide for five inside teller stations and four
outside drive-up teller stations. Construction is expected to be
completed by the 3rd quarter of 1997.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings which
management believes would have a material effect upon the
operations or financial condition of the Company. The Bank has not
commenced banking activities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the
Company's fourth quarter of the fiscal year ended December 31,
1996.
<PAGE>
PART II
ITEM 5. MARKET FOR ISSUER'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
As of December 31, 1996, there was one shareholder of record of the
Company's common stock. There is no established trading market for
the Company's common stock. The Company expects to issue at least
660,000 shares of its common stock in May, 1997, pursuant to the
offering referred to in Item 1 above. Upon issuance of such stock,
the Company expects to have approximately 800 shareholders. The
Company does not anticipate paying dividends on its common stock in
the immediate future. At present, the only source of funds from
which the Company could pay dividends would be dividends paid to
the Company by the Bank after it commences business. Certain
regulatory requirements restrict the amount of dividends that can
be paid to the Company by the Bank without obtaining the prior
approval of the DBF. No assurance can be given that dividends will
be declared by the Company, or if declared, what the amount of the
dividends will be or whether such dividends, once declared, would
continue.
ITEM 6. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OR PLAN OF
OPERATIONS
The Company was incorporated on August 7, 1996, for the purpose of
becoming a bank holding company for the Bank. At December 31,
1996, the Company was in the development stage and had no earnings
from operations except for interest earned on subscription funds
held in escrow. The Company filed applications to the Board of
Governors of the Federal Reserve System (the "Board") and the
Georgia Department of Banking and Finance (the "DBF") for prior
approval to become a bank holding company. The Company received
Board approval on December 24, 1996, and DBF approval on
December 3, 1996. The Company will become a bank holding company
within the meaning of the federal Bank Holding Company Act and the
Georgia bank holding company law upon the acquisition of all of the
Common Stock of the Bank, which is projected to occur by May 1,
1997. The Company expects the bank to open for business during the
3rd quarter of 1997. The Company's plan of operations for 1997
consists primarily of gaining market share in the Bank's primary
service area.
The Bank will offer a full range of commercial banking services to
individual, professional and business customers in its primary
service area. These services will include personal and business
checking accounts and savings and other time certificates of
deposit. The transaction accounts and time certificates will be at
rates competitive with those offered in the Bank's primary service
area. Customer deposits with the Bank will be insured to the
maximum extent provided by law through the FDIC. The Bank plans to
issue credit cards to act as a merchant depository for cardholder
drafts under both Visa and Mastercard. The Bank intends to offer
night depository and bank-by-mail services and to sell traveler's
checks (issued by an independent entity) and cashier's checks. The
Bank does not anticipate offering trust and fiduciary services
initially and will rely on trust and fiduciary services offered by
correspondent banks until the Bank determines that it is profitable
to offer such services directly.
Initially, the Bank anticipates deriving its income principally
from interest charged on loans and, to a lesser extent, from
interest earned on investments, from fees received in connection
with the origination of loans and from other services. The Bank's
principal expenses are anticipated to be interest expense on
deposits and operating expenses.
Management believes the Company and Bank can satisfy future cash
requirements indefinitely, and will not have to raise additional
capital during the first twelve months of operations. The Bank
intends to accept deposits and make loans and investments in
accordance with an asset and liability management framework that
emphasizes appropriate levels of liquidity and interest rate risk.
Management expects to complete construction of its banking facility
during the 3rd quarter of 1997. Land and construction costs are
currently estimated at $1,805,000. In addition, furnishings and
equipment are expected to cost approximately $260,000.
Following commencement of banking operations, the Company's two (2)
full time employees will become employees of the Bank. Management
expects the Bank to employ approximately 14 employees by the end of
1997. Significant increases in the number of employees above this
level are not expected in the foreseeable future.
ITEM 7. FINANCIAL STATEMENTS
The consolidated financial statements, notes thereto and
independent auditors' report thereon are attached hereto as Exhibit
99.1 and incorporated herein by reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There are no changes in or disagreements with accountants on
accounting and financial disclosure.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
The following table sets forth the name of each director and
Executive Officer of the Company, his or her age, and a brief
description of their principal occupation and business experience
for the preceding five years. Except as otherwise indicated, each
director has been or was engaged in his or her present or last
physical occupation, in the same or similar position for more than
five years. All of the individuals listed below are directors of
the Company and will serve as directors of the Bank.
<TABLE>
<S> <C> <C>
Name Age Principal Occupation
John L. Coleman 51 Mr. Coleman is the President, Chief
Executive Officer and a Director of
the Company and will hold the same
positions with the Bank. From 1994
until July, 1996, Mr. Coleman acted
as Regional Retail Manager Northwest
Georgia-Bartow County and Senior
Banking Executive for NationsBank
Bartow County in Cartersville,
Georgia. From 1986 to 1994, Mr.
Coleman was President and Senior
Lender of C&S Bank and NationsBank,
Bartow County Division, in
Cartersville, and acted in a similar
position at C&S Bank, Jackson
Division, in Jackson, Georgia, from
1982 to 1986. From 1967 to 1982,
Mr. Coleman worked in various
management positions for C&S Bank in
LaGrange, Georgia, and Atlanta,
Georgia.
D. Richard Ballard 49 Since 1967, Mr. Ballard has been
affiliated with Haisten Funeral
Home, Inc. in Jackson, Georgia, and
is currently the President/CEO. Mr.
Ballard is also the President/CEO of
Haisten Funeral Home of Henry
County, Inc.
Charles W. Carter 60 Since 1968, Mr. Carter has been
affiliated with Carter Builders
Supply in Jackson, and is currently
the President. Mr. Carter was an
advisory director of C & S Bank and
NationsBank in Jackson from 1978
until 1994.
<PAGE>
Alfred D. Fears, Jr. 39 Mr. Fears' primary occupation is as
an attorney, and he has been
practicing law in Jackson, Georgia
since 1981. He also owns and
operates an apartment rental
business in Jackson. Mr. Fears is
also the Secretary and Chief
Accounting Officer of the Company
(until the Bank is chartered).
William B. Jones 51 From 1966 to 1976, Mr. Jones was a
teacher, coach and school
superintendent in Jackson, Georgia.
Since 1977, Mr. Jones has practiced
law in Jackson, Georgia, and has
been active in the food and
petroleum distribution business.
Mr. Jones is currently President of
Jones Petroleum Co., Meriwether
Properties, Inc. and Jones &
Hudgins, and Vice President of
Jones & Owenby, Inc. He also served
on the Advisory Board of NationsBank
in Jackson.
Harry Lewis 44 Mr. Lewis owns and operates an
automobile dealership in Jackson,
Georgia, which he has operated since
1983. He is also affiliated with
Playtime Learning Center, Inc., and
is currently President. Mr. Lewis
is also the Treasurer and Chief
Financial Officer of the Company
(until the Bank is chartered).
Joey McClelland 49 Since 1989, Mr. McClelland has acted
as Executive Director of Marketing
and Logistics Consulting, providing
design and implementation consulting
services to international business
operations. Prior to 1989, Mr.
McClelland held numerous management
level positions in related marketing
fields.
Dr. Alexander Pollack 42 Since 1986, Dr. Pollack has been
self-employed in Jackson, Georgia,
as a general surgeon. In addition,
Dr. Pollack is Chairman of the Board
of Directors of Golden Health Care,
Inc.
Robert Ryan 58 Since 1983, Mr. Ryan has been
President of Atlanta South 75 Inc.
From 1960 to 1983, Mr. Ryan held
various management positions with
Unocal Corporation, Los Angeles,
California. Mr. Ryan served on the
Board of Directors of Speedway
Corporation and the Association of
Christian Truckers.
James H. Warren 58 Since 1971, Mr. Warren has been
self-employed as a general
contractor and developer. He is
President of Sure Power, Inc.,
Secretary-Treasurer of Brushy
Mountain Hydro-Electric Power, Inc.
and Alternator & Starter House,
Inc., and a partner in Fenwyck
Development Co.
George L. Weaver 48 Mr. Weaver has been President of
Central Georgia EMC since 1984.
From 1971 to 1984, Mr. Weaver held
various management positions with
Central Georgia EMC. Mr. Weaver
served on the Advisory Board of
NationsBank of Georgia, N.A. in
Jackson, and as Vice Chairman of the
Board of Directors of Federated
Rural Electric Insurance Corp. He
presently serves as a director of
Southeastern Data Corporation (past
Chairman of the Board) and Georgia
Rural Electric Service Corporation
(past Chairman of the Board). Mr.
Weaver also serves as President of
the Georgia Rural Electric Managers
Association and as a member of the
Rural Electric Management
Development Council.
</TABLE>
All of the Company's directors have served in such capacity since
the inception of the Company in 1996. There are no arrangements or
understandings between the Company and any person pursuant to which
any of the above persons have been or will be elected a director.
Charles W. Carter and Harry Lewis are first cousins. There are no
other family relations between any of the directors or executive
officers. No director is a director of another bank or bank
holding company. Mr. Fears provided legal services to the Company
during 1996, and it is anticipated he will provide legal services
to the Company during 1997.
The Company's Bylaws provide that the Board of Directors shall
consist of not less than 8 or more than 20 Directors, and that the
number of Directors shall be fixed or changed from time to time,
within the maximum and minimum, by the shareholders by the
affirmative vote of two-thirds of the issued and outstanding shares
of the Company entitled to vote in an election of Directors, or by
the Board of Directors by the affirmative vote of two-thirds of all
Directors then in office. Directors serve for a one year term, and
the present term of each Director will expire at the annual
shareholders meeting of the Company to be held in April, 1988.
The Bank has not yet commenced operations and has no Executive
Officers. Executive Officers of the Company and the Bank will be
elected annually by the Board of Directors.
ITEM 10. EXECUTIVE COMPENSATION
Executive Compensation
The Company does not separately compensate any of its directors or
executive officers, except for the chief executive officer. After
the Bank commences operations, the Company will no longer
separately compensate the chief executive officer. The following
sets forth certain information concerning the compensation of the
Company's chief executive officer during fiscal year 1996. No
other executive officer received any compensation.
Summary Compensation Table
Annual Compensation
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Long Term
Compensation
Awards
Name and Other Annual Securities All Other
Principal Fiscal Compensation Underlying Compensation
Position Year Salary ($) Bonus ($) ($) Options (#) ($)
John L. 1996 67,500 0 --(1) 15,000 340(2)
Coleman
President
and Chief
Executive
Officer
(1) Compensation does not include any perquisities and other personal
benefits which may be derived from business-related expenditures that
in the aggregate do not exceed the lesser of $50,000 or 10% of the
total annual salary and bonus reported for such person.
(2) The Company provided Mr. Coleman with a $200,000 term life insurance
policy; the premium paid by the Company in 1996 was $340.00. In
addition, pursuant to Mr. Coleman's employment agreement, Mr. Coleman
will be entitled to severance pay equal to one month's pay for each
year employed by the Bank in the event of termination of his
employment.
</TABLE>
<TABLE>
Option Grants in Last Fiscal Year
Individual Grants
<S> <C> <C> <C> <C>
Number of % of Total
Securities Options
Underlying Granted to
Options Employees in Exercise Expiration
Name Granted (#) Fiscal Year Price ($/Sh) Date
John L. Coleman 15,000 100% Lesser of 10 years from
President and $10.00 or completion of
Chief Executive book value stock offering
Officer
</TABLE>
Employment Agreement
John L. Coleman has an employment agreement with the Company
and the Bank under which he will serve as President and Chief
Executive Officer of the Company and of the Bank. The employment
agreement provides for a five-year term and is annually renewable
thereafter. He will be paid an initial annual salary of $135,000.
Once the Bank begins operations he will also be entitled to certain
performance bonuses. To qualify for the annual bonus, the Bank
must first have a CAMEL 2 rating for the applicable year. If the
Bank has a CAMEL 2 rating for the applicable year, then Mr. Coleman
will be paid a cash bonus for the year which is a certain
percentage of his salary for the year depending on the pre-tax
return on average assets ("ROA") performance of the Bank for the
year. The CAMEL rating is a rating which will be assigned to the
Bank each year by the Department of Banking based on its
examination of different performance factors, with "1" being the
best CAMEL rating and "5" being the worst. The bonus formula is as
follows:
<TABLE>
<S> <C>
ROA Percentage of Salary
Less than .9% No bonus
.9% or greater; less than 1.0% 5%
1.0% or greater; less than 1.10% 10%
1.10% or greater; less than 1.20% 15%
1.20% or greater; less than 1.30% 20%
1.30% or greater; less than 1.40% 25%
1.40% or greater; less than 1.60% 30%
1.60% or greater; less than 1.75% 35%
1.75% or greater; less than 2.00% 40%
Over 2.00% 50%
</TABLE>
Under Mr. Coleman's employment agreement, he also has the
option to purchase 15,000 shares of Common Stock of the Company at
the price of the lesser of $10.00 or book value of the stock during
the first three years of operation of the Bank and at the price of
book value of the stock during the remainder of the term of the
employment agreement, not to exceed a ten year option term. He
also will receive options to purchase up to an additional 5,000
shares at the price of book value of the stock at the date of
exercise, with the number of options which he may receive in any
year being determined based on a formula tied to performance of the
Bank. The number of options which Mr. Coleman will be entitled to
receive in any year is determined by multiplying (i) 1,000 shares
by (ii) a fraction whose numerator is the amount of the bonus
earned by Mr. Coleman determined as set forth above and whose
denominator is the maximum bonus which Mr. Coleman could have
received for the year. The term of these options is the same as
the term of the initial option to purchase 15,000 shares.
Mr. Coleman will also receive health, life and disability
insurance under the same plan and terms as other employees of the
Bank. He will receive a mid-size automobile to be used primarily
for business purposes, and the Bank will pay operating, maintenance
and insurance expenses for the automobile. The Bank will pay
monthly membership dues for Mr. Coleman up to $75.00 per month at
a local country club and the initiation fee of a local country club
up to $3,000.
Mr. Coleman's employment agreement provides for severance pay
for Mr. Coleman in the event of Mr. Coleman's termination (except
for cause) after a change of control of the Bank. Under the
employment agreement, the term "control" means the acquisition of
25 percent or more of the voting securities of the Bank by any
person, or persons acting as a group within the meaning of Section
13(d) of the Securities Exchange Act of 1934 or the acquisition of
between 10 percent and 25 percent of the voting securities of the
Bank if the Board of Directors of the Bank or the Comptroller of
the Currency, the Federal Deposit Insurance Corporation or the
Federal Reserve Bank has made a determination that such acquisition
constitutes or will constitute control of the Bank.
The employment agreement provides that if Mr. Coleman is
terminated after 365 days as a result of a change of control, Mr.
Coleman shall be entitled to receive his salary through the last
day of the calendar month of the termination, or payment in lieu of
the notice period. In addition, Mr. Coleman would receive an
amount equal to three times his then existing annual base salary.
The employment agreement further provides that the payment shall
also be made in connection with, or within 120 days after, a change
of control of the Bank if such change of control was opposed by Mr.
Coleman or the Bank's Board of Directors. This payment would be in
addition to any amount otherwise owed to Mr. Coleman pursuant to
his employment agreement.
Director Compensation
The Company and the Bank presently do not compensate any of
their directors for their services as directors. The directors of
the Company and the Bank presently do not receive a fee for
attending Board meetings.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding
the shares of common stock of the Company subscribed for as of
February 28, 1997, (i) by each person who beneficially owns more
than 5% of shares of common stock of the Company, (ii) by each of
the Company's directors and (iii) by all directors and executive
officers of the Company as a group.
<TABLE>
<S> <C> <C> <C>
Number of Percentage Percentage
Shares and Ownership Ownership
Name Options of Minimum(2) of Maximum(3)
D. Richard Ballard 15,000 2.46% 1.88%
Organizer and Director
Charles W. Carter 15,000 2.46 1.88
Organizer and Director
John L. Coleman 30,000(1) 4.92 3.75
President,
Chief Executive Officer
Organizer and Director
Alfred D. Fears 15,000 2.46 1.88
Organizer and Director
William B. Jones 15,000 2.46 1.88
Organizer and Director
Harry Lewis 15,000 2.46 1.88
Organizer and Director
Joey McClelland 15,000 2.46 1.88
Organizer and Director
Dr. Alexander Pollack 15,500(4) 2.54 1.94
Organizer and Director
Robert Ryan 15,000 2.46 1.88
Organizer and Director
James H. Warren 15,000 2.46 1.88
Organizer and Director
George L. Weaver 15,000 2.46 1.88
Organizer and Director
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
Number of Percentage Percentage
Shares and Ownership Ownership
Name Options of Minimum(2) of Maximum(3)
All current directors and 180,500(1)(4) 29.59 22.56
executive officers as a
group (11 persons)
</TABLE>
________________________
(1) Includes 15,000 shares that are subject to options granted to
Mr. Coleman under the terms of his employment agreement.
Those options will be immediately exercisable at an exercise
price of the lesser of $10.00 per share or book value per
share and expire ten years from the date of grant.
(2) The minimum number of shares which must be sold in the
Company's stock offering is 610,000 shares.
(3) The maximum number of shares which may be sold in the
Company's stock offering is 800,000 shares.
(4) Includes 500 shares subscribed for as custodian for a minor
child.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain executive officers and directors of the Company and the
Bank, and principal shareholders of the Company and affiliates of
such persons will, from time to time, engage in banking
transactions with the Bank. All loans or other extensions of
credit will be made by the Bank to such individuals in the ordinary
course of business on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for
comparable transactions with unaffiliated parties and will be
believed by management to not involve more than the normal risk of
collectibility or present other unfavorable features. As of
December 31, 1996, there were no loans to executive officers and
directors of the Company and the Bank, principal shareholders of
the Company, and affiliates of such persons.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The consolidated financial statements, notes thereto and
independent auditors' report thereon, are filed as Exhibit
99.1 hereto, and made a part hereof.
2. Financial Statement Schedules
All schedules have been omitted as the required information is
not applicable.
<PAGE>
3. Exhibits
Exhibit Numbers
Sequential
Page Number
3.1* Articles of Incorporation --
3.2* Bylaws --
10.1*+ Employment Contract between John L.
Coleman and the Company --
21.1 Subsidiaries of the Company. The
sole subsidiary of the Company will
be First Georgia Community Bank,
Jackson, Georgia, which will be
wholly-owned by the Company. --
27.1 Financial Data Schedule: As of
December 31, 1996, neither the
Company nor First Georgia Community
Bank had commenced their respective
operations as a bank holding company
or as a commercial bank, and neither
will do so unless regulatory approvals
are obtained and the required
capitalization of the Bank by the
Company is obtained from proceeds of
the sale of the Company's stock.
Accordingly the information required
by Article 9 of Regulation S-X is
not applicable and the required
Financial Data Schedule is not
applicable. --
99.1 Consolidated Financial Statements
of the Company 26
________________________
*Items 3.1 through 10.1, as listed above, were previously
filed by the Company as Exhibits (with the same
respective Exhibit Numbers as indicated herein) to the
Company's Registration Statement (Registration No. 333-13583) and
such documents are incorporated herein by reference.
+Item 10.1 is an employment-compensatory agreement.
(b) Reports on Form 8-K
No Reports on Form 8-K have been filed during the fourth
quarter of the year ended December 31, 1996.
<PAGE>
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 on March 28, 1997.
FIRST GEORGIA COMMUNITY CORP.
By: s/John L. Coleman
John L. Coleman
President
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 indicated on
March 28, 1997.
Signature Title
s/John L. Coleman President (Principal Executive
John L. Coleman Officer) and Director
s/D. Richard Ballard Director
D. Richard Ballard
s/Charles W. Carter Director
Charles W. Carter
s/Alfred D. Fears Director; Corporate Secretary
Alfred D. Fears and C.A.O.
s/ William B. Jones Director
William B. Jones
s/Harry Lewis Director; Treasurer and C.F.O.
Harry Lewis
________________________ Director
Joey McClelland
[SIGNATURES CONTINUED ON NEXT PAGE]
<PAGE>
s/Dr. Alexander Pollack Director
Dr. Alexander Pollack
s/Robert Ryan Director
Robert Ryan
s/James H. Warren Director
James H. Warren
s/George L. Weaver Director
George L. Weaver
Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Exchange Act by Non-reporting
Issuers:
No annual report to security holders covering the registrant's 1996
fiscal year or proxy material with respect to an annual meeting of
security holders for 1997 has been or will be sent to security
holders of the registrant, since the initial stock offering of the
registrant is presently pending and will not be completed until May
or June, 1997.
<PAGE>
EXHIBIT 99.1
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Item 7. FINANCIAL STATEMENTS
Index to Financial Statements
Independent Auditors' Report 27
Financial Statements:
Balance Sheet as of December 31, 1996 28
Statement of Operations for the period
from March 15, 1996
(inception) to December 31, 1996 29
Statement of Stockholder's Equity for
the period from March 15, 1996
(inception) to December 31, 1996 30
Statement of Cash Flows for the period
from March 15, 1996
(inception) to December 31, 1996 31
Notes to Financial Statements 32
<PAGE>
Independent Auditors' Report
To the Board of Directors
First Georgia Community Corp.
We have audited the accompanying balance sheet of First Georgia
Community Corp. (a development stage corporation) as of
December 31, 1996, and the related statements of operations,
stockholder's equity and cash flows for the period from March 15,
1996 (inception) to December 31, 1996. 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 audit.
We conducted our audit in accordance with generally accepted
auditing standards. 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of First
Georgia Community Corp. as of December 31, 1996 and the results of
its operations and its cash flows for the period from March 15,
1996 (inception) to December 31, 1996 in conformity with generally
accepted accounting principles.
s/SNYDER, CAMP, STEWART & CO., LLP
SNYDER, CAMP, STEWART & CO., LLP
February 28, 1997
<PAGE>
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Balance Sheet
December 31, 1996
<TABLE>
<S> <C>
Assets
Cash $ 1,497
Restricted cash 464,600
Deferred organization costs 93,506
Property and equipment 166,121
Prepaid expenses 22,700
$ 748,424
Liabilities and Stockholder's Equity
Liabilities:
Stock subscription deposits $ 464,600
Advances from organizers 365,800
Accrued expenses 12,802
Total liabilities 843,202
Stockholder's equity:
Capital stock, $5.00 par value; 10,000,000 shares
authorized; 1 share issued and outstanding 5
Additional paid-in capital 5
Deficit accumulated during the development stage (94,788)
Total stockholder's equity (94,778)
$ 748,424
</TABLE>
See accompanying auditors' report and notes to financial
statements.
<PAGE>
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Statement of Operations
For the Period from March 15, 1996 (inception)
to December 31, 1996
<TABLE>
<S> <C>
Income:
Interest income $ 461
Total income 461
Expenses:
Personnel expenses 81,359
Interest expense 4,522
Supplies and printing expense 2,957
Miscellaneous expenses 6,411
Total expenses 95,249
Net loss $ (94,788)
</TABLE>
See accompanying auditors' report and notes to financial
statements.
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Statement of Stockholder's Equity
For the Period from March 15, 1996 (inception)
to December 31, 1996
<TABLE>
<S> <C> <C> <C>
Deficit
Accumulated
Additional During the
Common Paid-in Development
Stock Capital Stage Total
Cash proceeds from the
sale of organization
shares - one share
issued August 16, 1996 $ 5 5 - 10
Net loss - - (94,788) (94,788)
Balance, December 31, 1996 $ 5 5 (93,788) (94,778)
</TABLE>
See accompanying auditors' report and notes to financial
statements.
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Statement of Cash Flows
For the Period from March 15, 1996 (inception)
to December 31, 1996
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (94,788)
Adjustments to reconcile net loss to net cash used
by operating activities:
Increase in deferred expenses (93,506)
Increase in accrued expenses 12,802
Increase in prepaid expenses (22,700)
Net cash used by operating activities (198,192)
Cash flows from investing activities:
Increase in property and equipment (166,121)
Net cash used by investing activities (166,121)
Cash flows from financing activities:
Proceeds from the sale of organization shares 10
Proceeds from stock subscriptions 464,600
Increase in advances from organizers 365,800
Net cash provided by financing activities 830,410
Net increase in cash and cash equivalents 466,097
Cash and cash equivalents at beginning of period -
Cash and cash equivalents at end of period $ 466,097
Supplemental cash flow information
Interest paid $ 3,084
</TABLE>
See accompanying auditors' report and notes to financial
statements.
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Notes to Financial Statements
December 31, 1996
(1) Organization and Summary of Significant Accounting Policies
First Georgia Community Corp. (the "Company") was
incorporated on August 7, 1996, for the purpose of becoming
a bank holding company for its proposed wholly-owned
subsidiary, First Georgia Community Bank (the "Bank"), which
will operate in the Butts County area. The organizers of the
Bank filed a joint application to charter the Bank with the
Department of Banking and Finance and the Federal Deposit
Insurance Corporation. The Company also filed an application
to become a bank holding company with the Federal Reserve
Bank of Atlanta.
As of February 28, 1997, both the Company and the Bank had
received preliminary regulatory approval to proceed with
their organizational efforts; however, neither had commenced
operations, and all stock subscription proceeds remained in
escrow. Accordingly, the Bank had not been capitalized and
the Bank had no financial activity through this date.
Prior to the Company's incorporation on August 7, 1996,
organizational and pre-opening activities were conducted by
the organizers. Expenditures on behalf of the Company by the
organizers are considered expenditures of the Company. Costs
of organizing the Company have been capitalized and will be
amortized over five years using the straight-line method upon
commencement of operations. Costs of the intended common
stock offering have been deferred and will be offset against
the proceeds of the offering upon successful completion.
These costs will be charged to expense if the minimum
offering is not purchased. Additional costs are expected to
be incurred for both organization costs and stock offering
costs. The Company expects to be reimbursed by the Bank for
expenditures incurred on behalf of the Bank.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Notes to Financial Statements, Continued
December 31, 1996
For purposes of reporting cash flows, cash and cash
equivalents include cash on hand, deposits with banks, and
liquid debt instruments purchased with maturities of less
than three months.
Financial instruments that potentially subject the Company to
credit risk include deposits with financial institutions.
The Company has deposit and escrow relationships with high
credit quality financial institutions. Accordingly, the
Company believes no significant concentration of credit risk
exists with respect to its deposit balances with financial
institutions. The fair values of cash and interest bearing
borrowings approximate their carrying amounts.
Deferred income taxes are provided using the liability method
to measure tax consequences resulting from differences
between certain financial accounting standards and applicable
income tax laws.
(2) Advances from Organizers
Advances from organizers at December 31, 1996 consists of the
following:
Line of credit balance $ 310,800
Direct advances from organizers 55,000
$ 365,800
Prior to incorporation, the organizers secured a line of
credit with a maximum limit of $500,000. Organizational
costs, pre-opening expenses, and offering expenses incurred
prior to the successful completion of the sale of common
stock will be funded through the use of this line. The line
has a maturity date of June 10, 1997 and carries an initial
interest rate of 8.25%, which varies with the prime rate.
The direct organizer advances are noninterest bearing. Upon
successful completion of the sale of common stock, the
organizers will be reimbursed from the proceeds from the
offering. If the offering is not successful, the line of
credit will be repaid by the organizers and the direct
advances will not be repaid.
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Notes to Financial Statements, Continued
December 31, 1996
(3) Common Stock Offering
The Company has filed a Registration Statement on Form SB-2
with the Securities and Exchange Commission offering for sale
a minimum of 610,000 and a maximum of 800,000 shares of the
Company's $5.00 par value common stock at $10 per share. As
of February 28, 1997, the Company had received subscriptions
to purchase approximately 428,000 shares of its common stock
for an aggregate purchase price of $4,280,000. Subscription
proceeds remained in escrow as of this date, pending
completion of the offering.
(4) Stock Option Plan
The Company plans to offer stock options for as many as
20,000 shares of its common stock to its President under
terms of an employment agreement. The per share exercise
price for all options granted pursuant to the employment
agreement is the greater of book value or $10. The Financial
Accounting Standards Board issued Statement No. 123,
"Accounting for Stock - Based Compensation," (SFAS No. 123)
in October 1995. SFAS No. 123 allows companies either to (i)
continue to measure compensation cost based on the "intrinsic
value" method prescribed by Accounting Principles Board
Opinion No. 25 (ABP No. 25) or (ii) adopt a "fair value"
method of accounting for all employee stock-based
compensation; provided, however that in either case companies
will be required to significantly expand disclosures related
to stock-based employee compensation arrangements (including
the pro forma amount of net income and earnings per share as
if the new "fair value" method were adopted, for those
companies choosing to retain the "intrinsic value" method of
APB No. 25.) The accounting requirements, as specified in
SFAS No. 123, apply to all stock-based awards granted,
modified or settled in cash in fiscal years beginning after
December 15, 1995. The Company expects to utilize the
accounting for stock issued to employees prescribed by APB
No. 25 and, therefore, the impact on the Company of this
change in accounting principle will be only to increase its
disclosure requirements.
<PAGE>
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Notes to Financial Statements, Continued
December 31, 1996
(5) Property and Equipment
As of December 31, 1996, the Company had incurred
architectural fees for building design services and had paid
deposits to secure the acquisition and delivery of various
types of property to be used by the Bank. These payments,
aggregating $166,121 through December 31, 1996, have been
classified as property and equipment. The aggregate
remaining outlay expected to be required to complete and
equip the main office facility is approximately $1,900,000,
including the land purchase transaction described in Note
(7).
(6) Income Taxes
The Company has no currently taxable income for the period
ended December 31, 1996. The tax effects of temporary
differences between the financial statement carrying amounts
and the tax basis of assets and liabilities and other items
that give rise to deferred tax assets at December 31, 1996
are as follows:
Description Amount
Deferred tax assets:
Deferred expenses $ 32,385
Other items (1,836)
Total gross deferred tax assets 30,549
Less valuation allowance (30,549)
Net deferred tax assets $ 0
Total tax expense reflected in the accompanying statement of
operations differs from amounts computed at maximum statutory
rates as follows:
Description Amount
Federal income tax benefit at statutory rates $ (32,228)
Deferred tax valuation allowance 30,549
Other, net 1,679
$ 0
FIRST GEORGIA COMMUNITY CORP.
(A Development Stage Corporation)
Notes to Financial Statements, Continued
December 31, 1996
(7) Commitments
In January 1997, pursuant to contractual agreements executed
in May, 1996, the Company purchased property on which the
Bank's main office will be located. The aggregate purchase
price for the property amounted to $395,000.
The organizers of the Company have entered into an employment
agreement with one of the organizing directors to serve as
President and Chief Executive Officer of the Company and the
Bank providing for an annual base salary, the right to receive
a bonus (based upon performance standards), the right to
receive stock options, and other customary executive benefits.
