<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Mark One
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________ to __________
Commission File Number: 333-13583
First Georgia Community Corp.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Georgia 58-2261088
- -------------------------------- ----------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
150 Covington Street, Jackson, Georgia 30233
--------------------------------------------
(Address of principal executive offices)
(770) 504-1090
--------------------------------------------
(Issuer's telephone number)
N/A
-------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
---- ----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court.
Yes No
------ -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of May 1, 1998: 758,458; $5 par value
Transitional Small Business Disclosure Format (Check One) Yes No X
----- -----
1
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
================================================================================
INDEX
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Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet - March 31, 1998.................... 3
Consolidated Statements of Operations and
Comprehensive Loss - Three Months Ended
March 31, 1998 and 1997....................................... 4
Consolidated Statement of Cash Flows - Three
Months Ended March 31, 1998 and 1997.......................... 5
Notes to Consolidated Financial Statements..................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 7
PART II. OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders..... 13
Item 6 - Exhibits and Reports on Form 8-K........................ 13
Signatures....................................................... 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
FINANCIAL STATEMENTS
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Assets
------
<S> <C>
Cash and due from banks $ 1,448,827
Federal funds sold 3,590,000
Securities available-for-sale, at fair value 3,047,792
Loans 11,035,222
Less allowance for loan losses 162,000
-------------------
Loans, net 10,873,222
Premises and equipment 2,277,856
Other assets 191,976
-------------------
Total assets $ 21,429,673
===================
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Demand $ 4,607,371
Interest-bearing demand 4,867,656
Savings 582,357
Time 4,254,068
-------------------
Total deposits 14,311,452
Other liabilities 98,353
-------------------
Total liabilities 14,409,805
-------------------
Commitments and contingent liabilities
Stockholders' equity
Common stock, par value $5; 10,000,000 shares authorized;
758,458 shares issued and outstanding 3,792,290
Capital surplus 3,754,816
Accumulated deficit (526,779)
Accumulated other comprehensive loss (459)
-------------------
Total stockholders' equity 7,019,868
-------------------
Total liabilities and stockholders' equity $ 21,429,673
===================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
------------------- -------------------
<S> <C> <C>
Interest income
Loans $ 217,628 $ -
Taxable securities 36,825 -
Federal funds sold 60,110 34,785
------------------- -------------------
Total interest income 314,563 34,785
------------------- -------------------
Interest expense
Deposits 97,929 -
Other borrowings - 5,566
------------------- -------------------
Total interest expense 97,929 5,566
------------------- -------------------
Net interest income 216,634 29,219
Provision for loan losses 90,000 -
------------------- -------------------
Net interest income after provision for loan losses 126,634 29,219
------------------- -------------------
Other operating income 38,254 -
------------------- -------------------
Other expenses
Salaries and other employee benefits 127,982 45,077
Occupancy and equipment expenses 43,121 -
Other operating expenses 87,578 5,933
------------------- -------------------
Total other expenses 258,681 51,010
------------------- -------------------
Net loss before income taxes (93,793) (21,791)
Income tax expense - -
------------------- -------------------
Net loss (93,793) (21,791)
------------------- -------------------
Other comprehensive losses:
Unrealized losses on securities available-for-sale
arising during period - -
------------------- -------------------
Comprehensive loss $ (93,793) $ (21,791)
=================== ===================
Basic and diluted losses per common share $ (0.12) $ (21,791)
=================== ===================
Weighted average shares outstanding (basic and diluted) 758,458 1
=================== ===================
Cash dividends per share of common stock $ - $ -
=================== ===================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
--------------------- ----------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (93,793) $ (21,791)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 29,192 -
Provision for loan losses 90,000 -
Increase in interest receivable (52,738) -
Increase in interest payable 19,275 -
Other operating activities 32,327 (8,659)
--------------------- ----------------------
Net cash provided by (used in) operating activities 24,263 (30,450)
--------------------- ----------------------
INVESTING ACTIVITIES
Purchases of securities available-for-sale (1,500,000) -
Proceeds from maturities of securities available-for-sale 481,699 -
Net decrease in Federal funds sold 730,000 -
Net increase in loans (4,918,200) -
Purchase of premises and equipment (83,314) (397,158)
--------------------- ----------------------
Net cash used in investing activities (5,289,815) (397,158)
--------------------- ----------------------
FINANCING ACTIVITIES
Net increase in deposits 5,146,362 -
Proceeds from stock subscriptions - 4,514,460
Repayment of other borrowings - (305,682)
--------------------- ----------------------
Net cash provided by financing activities 5,146,362 4,208,778
--------------------- ----------------------
Net increase (decrease) in cash and due from banks (119,190) 3,781,170
Cash and due from banks, beginning of period 1,568,017 466,097
--------------------- ----------------------
Cash and due from banks, end of period $ 1,448,827 $ 4,247,267
===================== ======================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest $ 78,654 $ 6,981
Income taxes $ - $ -
NONCASH TRANSACTION
Unrealized losses on securities available-for-sale $ - $ -
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
The consolidated financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely
of normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the interim
period.
The results of operations for the three month period ended March 31,
1998 is not necessarily indicative of the results to be expected for
the full year.
NOTE 2. CURRENT ACCOUNTING DEVELOPMENTS
The adoption of the provisions of SFAS No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities" that became effective on January 1, 1998 did not have a
material effect on the Company's financial statements.
The adoption of SFAS No. 128, "Earnings Per Share", that became
effective as of December 31, 1997 had no effect on the calculation of
losses per common share for the three months ended March 31, 1997.
The adoption of SFAS No. 130, "Reporting Comprehensive Income", that
became effective on January 1, 1998 required the Company to report
comprehensive income in the Company's Statements of Operations and
Comprehensive Loss.
There are no other recent accounting pronouncements that have had, or
are expected to have, a material effect on the Company's financial
statements.
6
<PAGE>
FIRST GEORGIA COMMUNITY CORP. AND SUBSIDIARY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain
significant factors which have affected the financial position and
operating results of the Company and its bank subsidiary, First Georgia
Community Bank, during the periods included in the accompanying
consolidated financial statements.
Liquidity and Capital Resources
As of March 31, 1998, the liquidity ratio of the Bank, as determined
under guidelines established by regulatory authorities, was
satisfactory.
At March 31, 1998, the capital ratios of the Company and the Bank were
adequate based on regulatory minimum capital requirements. The minimum
capital requirements and the actual capital ratios for the Company and
the Bank are as follows:
Actual
----------------------
First First
Georgia Georgia
Community Community Regulatory
Corp. Bank Requirement
----------- ---------- -----------
Leverage capital ratios 34.45 % 30.19 % 4.00 %
Risk-based capital ratios:
Core capital 51.41 45.06 4.00
Total capital 52.62 46.27 8.00
As the Company continues to grow, the capital ratios will decrease
rapidly to levels closer to, but still in excess of regulatory minimum
requirements.
7
<PAGE>
Financial Condition
Following is a summary of the Company's balance sheets for the periods
indicated:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997 Increase (Decrease)
-------------- ---------------- --------------------------------
(Dollars in Thousands) Amount Percent
----------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
Cash and due from banks $ 1,449 $ 1,568 $ (119) (7.59) %
Securities 3,048 2,029 1,019 50.22
Federal funds sold 3,590 4,320 (730) (16.90)
Loans 10,873 6,045 4,828 79.87
Premises and equipment 2,278 2,220 58 2.61
Other assets 192 152 40 26.32
-------------- ---------------- --------------
$ 21,430 $ 16,334 $ 5,096 31.20
============== ================ ==============
Deposits $ 14,312 $ 9,165 $ 5,147 56.16 %
Other liabilities 98 55 43 78.18
Stockholders' equity 7,020 7,114 (94) (1.32)
-------------- ---------------- --------------
$ 21,430 $ 16,334 $ 5,096 31.20
============== ================ ==============
</TABLE>
As indicated in the above table, the Company's total assets grew at a rate of
31.20%. This high rate of growth is not uncommon for a de novo bank. Significant
deposit growth of 56.16% was invested in loans and securities. The Company's
loan to deposit ratio has increased from 66.7% at December 31, 1997 to 77.1% at
March 31, 1998 as new loan demand was significant during the first quarter.
8
<PAGE>
Results of Operations For The Three Months Ended March 31, 1998 and 1997
Following is a summary of the Company's operations for the periods indicated.
Three Months Ended
March 31,
-------------------------------------
1998 1997
----------------- -----------------
(Dollars in Thousands)
-------------------------------------
Interest income $ 315 $ 35
Interest expense 98 6
Net interest income 217 29
Provision for loan losses 90 -
Other income 38 -
Other expense 259 51
Net (loss) (94) (22)
The Company's net interest income was $217,000 during the first quarter of 1998.
The Company's net interest margin decreased to 5.44% during the first quarter
of 1998 as compared to 5.66% for the previous year. The decrease in the net
interest margin is due to the significant deposit growth and higher cost of
funds.
The provision for loan losses was $90,000 during the first quarter of 1998. This
amount is due exclusively to loan growth. The Company's reserve for loan losses
amounted to 1.47% at March 31, 1998 as compared to 1.18% at December 31, 1997.
The allowance for loan losses is maintained at a level that is deemed
appropriate by management to adequately cover all known and inherent risks in
the loan portfolio. Management's evaluation of the loan portfolio includes a
continuing review of loan loss experience, current economic conditions which may
affect the borrower's ability to repay and the underlying collateral value.
9
<PAGE>
Information with respect to nonaccrual, past due and restructured loans at
March 31, 1998 is as follows:
<TABLE>
<CAPTION>
March 31,
------------------
1998
------------------
(Dollars in
Thousands)
------------------
<S> <C>
Nonaccrual loans $ -
Loans contractually past due ninety days or more as to interest
or principal payments and still accruing -
Restructured loans -
Loans, now current about which there are serious doubts as to the
ability of the borrower to comply with loan repayment terms -
Interest income that would have been recorded on nonaccrual
and restructured loans under original terms -
Interest income that was recorded on nonaccrual and restructured loans -
</TABLE>
It is the policy of the Bank to discontinue the accrual of interest income when,
in the opinion of management, collection of such interest becomes doubtful. This
status is accorded such interest when (1) there is a significant deterioration
in the financial condition of the borrower and full repayment of principal and
interest is not expected and (2) the principal or interest is more than ninety
days past due, unless the loan is both well-secured and in the process of
collection.
Loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been included in the table above do not represent
or result from trends or uncertainties which management reasonably expects will
materially impact future operating results, liquidity or capital resources.
These classified loans do not represent material credits about which management
is aware of any information which causes management to have serious doubts as to
the ability of such borrowers to comply with the loan repayment terms.
10
<PAGE>
Information regarding certain loans and allowance for loan loss data through
March 31, 1998 is as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1998
-------------------------
(Dollars in Thousands)
-------------------------
<S> <C>
Average amount of loans outstanding $ 8,801
=========================
Balance of allowance for loan losses at beginning of period $ 72
-------------------------
Loans charged off
Commercial and financial $ -
Real estate mortgage -
Instalment -
-------------------------
-
-------------------------
Loans recovered
Commercial and financial -
Real estate mortgage -
Instalment -
-------------------------
-
-------------------------
Net charge-offs -
-------------------------
Additions to allowance charged to operating expense during period 90
-------------------------
Balance of allowance for loan losses at end of period $ 162
=========================
Ratio of net loans charged off during the period to
average loans outstanding - %
=========================
</TABLE>
Other income was $38,000 for the first quarter of 1998 consisting of $25,000 of
service charges on deposit accounts and $13,000 of other miscellaneous fees.
Other expenses were $258,000 for the first quarter of 1998. Salaries and
employee benefits of $128,000 was the largest component of total other expenses.
The Company has recorded no provision for income taxes due to cumulative net
operating losses.
The Company was still in its organizational stage as of March 31, 1997.
Therefore, a comparative analysis with March 31, 1998 is not presented.
11
<PAGE>
Capability of Data Processing Software to Accommodate the Year 2000
- -------------------------------------------------------------------
Like many financial institutions, the Company relies upon computers for the
daily conduct of their business and for data processing generally. There is
concern among industry experts that commencing on January 1, 2000, computers
will be unable to "read" the new year and that there may be widespread computer
malfunctions. Management has assessed the electronic systems, programs,
applications, and other electronic components used in operations and believes
that the Company's hardware and software have been programmed to be able to
accurately recognize the year 2000, and that significant additional costs will
not be incurred in connection with the year 2000 issue, although there can be no
assurances in this regard.
The Company is not aware of any known trends, events or uncertainties, other
than the effect of events as described above, that will have or that are
reasonably likely to have a material effect on its liquidity, capital resources
or operations. The Company is also not aware of any current recommendations by
the regulatory authorities which, if they were implemented, would have such an
effect.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
None.
13
<PAGE>
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.
FIRST GEORGIA COMMUNITY CORP.
(Registrant)
DATE: BY: /s/ John L. Coleman
--------------------- ---------------------------------------
John L. Coleman, President and C.E.O.
(Principal Executive Officer)
DATE: BY: /s/ Elaine S. Kendrick
--------------------- ---------------------------------------
Elaine S. Kendrick, Secretary and
Treasurer (Principal Financial and
Accounting Officer)
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,448,827
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,590,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,047,792
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 11,035,222
<ALLOWANCE> 162,000
<TOTAL-ASSETS> 21,429,673
<DEPOSITS> 14,311,452
<SHORT-TERM> 0
<LIABILITIES-OTHER> 98,353
<LONG-TERM> 0
0
0
<COMMON> 3,792,290
<OTHER-SE> 3,227,578
<TOTAL-LIABILITIES-AND-EQUITY> 21,429,673
<INTEREST-LOAN> 217,628
<INTEREST-INVEST> 36,825
<INTEREST-OTHER> 60,110
<INTEREST-TOTAL> 314,563
<INTEREST-DEPOSIT> 97,929
<INTEREST-EXPENSE> 97,929
<INTEREST-INCOME-NET> 216,634
<LOAN-LOSSES> 90,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 258,681
<INCOME-PRETAX> (93,793)
<INCOME-PRE-EXTRAORDINARY> (93,793)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (93,793)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
<YIELD-ACTUAL> 5.44
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 72,000
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 162,000
<ALLOWANCE-DOMESTIC> 162,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
