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<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ______________ to ______________
Commission file number 333-14355
Decatur First Bank Group, Inc.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2254289
- --------------------------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1120 Commerce Drive
Decatur, Georgia 30030
- --------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
404-373-1000
-------------------
(Telephone Number)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES XX NO
---- ----
Common stock, par value $5 per share: 941,544 shares
outstanding as of April 29, 1998
Transitional Small Business Disclosure Format
(check one)
Yes No XX
---- ----
<PAGE>
DECATUR FIRST BANK GROUP, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet (unaudited) at March 31, 1998 3
Statement of Operations (unaudited) for the Three
Months Ended March 31, 1998 and 1997 4
Statement of Cash Flows (unaudited) for the Three
Months Ended March 31, 1998 and 1997 5
Notes to Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DECATUR FIRST BANK GROUP, INC.
Balance Sheet
March 31, 1998
(Unaudited)
Assets
------
Cash and due from banks $ 1,373,355
Federal funds sold 5,410,000
------------
Cash and cash equivalents 6,783,355
Investment securities available for sale 9,195,398
Investment securities held to maturity 2,396,078
Loans, net 3,702,026
Premises and equipment, net 948,526
Accrued interest receivable and other assets 282,463
------------
$ 23,307,846
============
Liabilities and Stockholders' Equity
------------------------------------
Liabilities:
Deposits:
Noninterest-bearing $ 2,813,243
Interest-bearing 11,633,364
------------
Total deposits 14,446,607
Accrued interest payable and other liabilities 148,493
------------
Total liabilities 14,595,100
============
Stockholders' equity:
Common stock, $5 par value; authorized
10,000,000 shares; issued and outstanding
941,544 shares 4,707,720
Additional paid-in capital 4,668,036
Accumulated deficit (647,095)
Unrealized loss on securities available for sale, net of tax (15,915)
------------
Total stockholders' equity 8,712,746
------------
$ 23,307,846
============
See accompanying notes to financial statements.
-3-
<PAGE>
DECATUR FIRST BANK GROUP, INC.
Statement of Operations
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
1998 1997
---- ----
Interest income:
Interest and fees on loans $ 85,779 -
Interest on federal funds sold 59,522 -
Investment securities 155,093 -
------- ------
Total interest income 300,394 -
------- ------
Interest expense:
Deposits 90,681 -
Other borrowings - 3,708
------- ------
Total interest expense 90,681 3,708
------- ------
Net interest income (expense) 209,713 (3,708)
Provision for loan losses 42,000 -
------- ------
Net interest income after provision
for loan losses 167,713 (3,708)
------- ------
Other income:
Service charges on deposit accounts 12,844 -
Other operating income 5,046 -
------- ------
Total other income 17,890 -
------- ------
Other expense:
Salaries and other personnel expense 139,547 38,724
Net occupancy and equipment expense 44,799 17,546
Other operating expense 102,486 14,637
------- ------
Total other expense 286,832 70,907
------- ------
Net loss $101,229 74,615
======= ======
Loss per common share based on average outstanding
shares of 941,544 in 1998 and 1997:
Net loss per share $ 0.11 0.08
======= =======
See accompanying notes to financial statements.
-4-
<PAGE>
DECATUR FIRST BANK GROUP, INC.
Statement of Cash Flows
For the Three Months Ended March 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (101,229) (74,615)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Provision for loan losses 42,000 -
Depreciation, amortization and accretion 33,511 -
Change in:
Other (34,238) 100,622
---------- ----------
Net cash provided (used) by operating activities (59,956) 26,007
---------- ----------
Cash flows from investing activities:
Proceeds from sales, maturities and paydowns
of investment securities held to maturity 1,190,000 -
Purchases of investment securities held to maturity (500,000) -
Purchases of investment securities available for sale (3,712,000) -
Change in loans (2,212,826) -
Purchases of premises and equipment (29,709) (153,460)
Payments for organization and offering costs - (36,979)
---------- ----------
Net cash used by investing activities (5,264,535) (190,439)
---------- ----------
Cash flows from financing activities:
Net change in deposits 5,781,055 -
Proceeds from note payable - 150,000
---------- ----------
Net cash provided by financing activities 5,781,055 150,000
---------- ----------
Net change in cash and cash equivalents 456,564 (14,432)
Cash and cash equivalents at beginning of the period 6,326,791 23,935
---------- ----------
Cash and cash equivalents at end of period $ 6,783,355 9,503
========== ==========
Noncash investing activities:
Change in unrealized loss on securities available for sale, net of tax $ (12,417) -
</TABLE>
See accompanying notes to financial statements.
-5-
<PAGE>
DECATUR FIRST BANK GROUP, INC.
Notes to Financial Statements
(Unaudited)
(1) Organization and Basis of Presentation
--------------------------------------
Decatur First Bank Group, Inc. (the Company), a bank holding company, owns
100% of the outstanding common stock of Decatur First Bank (the Bank),
which operates in the Decatur, Georgia area. The Bank opened for business
on September 2, 1997, and prior to that date activities of the Company
were devoted solely to securing banking facilities, raising capital and
procuring management and other personnel.
The consolidated financial statements include the accounts of the Company
and the Bank. All intercompany accounts and transactions have been
eliminated in consolidation.
The interim financial statements included herein are unaudited but reflect
all adjustments which, in the opinion of management, are necessary for a
fair presentation of the financial position and results of operations for
the interim period presented. All such adjustments are of a normal
recurring nature. The results of operations for the period ended March 31,
1998 are not necessarily indicative of the results of a full year's
operations.
The accounting principles followed by the Company and the methods of
applying these principles conform with generally accepted accounting
principles (GAAP) and with general practices within the banking industry.
In preparing financial statements in conformity with GAAP, management is
required to make estimates and assumptions that affect the reported
amounts in the financial statements. Actual results could differ
significantly from those estimates. Material estimates common to the
banking industry that are particularly susceptible to significant change
in the near term include, but are not limited to, the determinations of
the allowance for loan losses, the valuation of real estate acquired in
connection with or in lieu of foreclosure on loans, and valuation
allowances associated with deferred tax assets, the recognition of which
are based on future taxable income.
-6-
<PAGE>
Item 2.
DECATUR FIRST BANK GROUP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the Three Months Ended March 31, 1998 and 1997
Financial Condition
Total assets at March 31, 1998 were $23,307,846 representing a $6,181,805
(35%) increase from December 31, 1997. Deposits increased $5,801,055 (67%) from
December 31, 1997. Loans increased $2,212,826 (142%). The allowance for loan
losses at March 31, 1998 totaled $74,000, representing 1.96% of total loans
compared to December 31, 1997 totals of $32,000 which represented 2.05% of total
loans. Cash and cash equivalents increased $456,564 from December 31, 1997.
There were no related party loans or other loans which were considered
nonperforming at March 31, 1998.
Results of Operations
For the three months ended March 31, 1998, the Bank's yield on earning
assets has been 6.81%. The cost of funding sources for the three month period
ended March 31, 1998, was 3.85%. While net interest spread is 2.96%, net
interest margin, which considers the effect of non-interest bearing deposits,
was 4.76%.
Capital
The following tables present Decatur First Bank Group, Inc.'s regulatory
capital position at March 31, 1998:
Risk-Based Capital Ratios
-------------------------
Tier 1 Tangible Capital, Actual 91.86%
Tier 1 Tangible Capital minimum requirement 4.00%
-------
Excess 87.86%
=======
Total Capital, Actual 92.65%
Total Capital minimum requirement 8.00%
-------
Excess 84.65%
=======
Leverage Ratio
--------------
Tier 1 Tangible Capital to adjusted total assets
("Leverage Ratio") 42.27%
Minimum leverage requirement 4.00%
-------
Excess 38.27%
=======
-7-
<PAGE>
PART II. OTHER INFORMATION
DECATUR FIRST BANK GROUP, INC.
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
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
--------------------------------
None
-8-
<PAGE>
DECATUR FIRST BANK GROUP, INC.
SIGNATURES
Pursuant to the requirements 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.
DECATUR FIRST BANK GROUP, INC.
By:
-----------------------------------
Judy B. Turner
President, Chief Executive Officer and
Principal Accounting Officer
Date:
-----------------------------------
-9-
<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> 1,373,355
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,410,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 9,195,398
<INVESTMENTS-CARRYING> 2,396,078
<INVESTMENTS-MARKET> 2,396,078
<LOANS> 3,776,026
<ALLOWANCE> (74,000)
<TOTAL-ASSETS> 23,307,846
<DEPOSITS> 14,446,607
<SHORT-TERM> 0
<LIABILITIES-OTHER> 148,493
<LONG-TERM> 0
0
0
<COMMON> 4,707,720
<OTHER-SE> 4,005,026
<TOTAL-LIABILITIES-AND-EQUITY> 23,307,846
<INTEREST-LOAN> 85,779
<INTEREST-INVEST> 155,093
<INTEREST-OTHER> 59,522
<INTEREST-TOTAL> 300,394
<INTEREST-DEPOSIT> 90,681
<INTEREST-EXPENSE> 90,681
<INTEREST-INCOME-NET> 209,713
<LOAN-LOSSES> 42,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 286,832
<INCOME-PRETAX> (101,229)
<INCOME-PRE-EXTRAORDINARY> (101,229)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (101,229)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 32,000
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 74,000
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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