<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: 333-37405
Buckhead Community Bancorp, Inc.
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(Exact name of small business issuer as specified in its charter)
Georgia 58-2265980
- --------------------------- -----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
415 EAST PACES FERRY ROAD, N.E., ATLANTA, GEORGIA 30305
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(Address of principal executive offices)
(404) 231-2265
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(Issuer's telephone number)
N/A
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(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
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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
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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: 1,627,950; $.01 par value.
Transitional Small Business Disclosure Format (Check One) Yes No X
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1
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BUCKHEAD COMMUNITY BANCORP, INC. AND SUBSIDIARY
================================================================================
INDEX
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PAGE
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PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1. FINANCIAL STATEMENTS
<S> <C>
CONSOLIDATED BALANCE SHEETS - MARCH 31, 1998 AND
DECEMBER 31, 1997........................................................ 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............... 9
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.................................. 9
SIGNATURES................................................................. 10
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
FINANCIAL STATEMENTS
BUCKHEAD COMMUNITY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(Unaudited)
<TABLE>
<CAPTION>
Assets 1998 1997
------ ---------------------- ------------------
<S> <C> <C>
Cash and due from banks $ 865,927 $ 61,928
Federal funds sold 6,340,000 -
Securities available-for-sale, at fair value 5,210,254 -
Loans 1,133,408 -
Less allowance for loan losses 1,500 -
---------------------- ------------------
Loans, net 1,131,908 -
---------------------- ------------------
Premises and equipment 525,313 336,638
Other assets 284,615 210,908
---------------------- ------------------
Total assets $ 14,358,017 $ 609,474
====================== ==================
Liabilities and Stockholders' Equity
------------------------------------
Deposits
Demand $ 1,053,664 $ -
Interest-bearing demand 1,954,834 -
Savings 33,266 -
Time 3,580,320 -
---------------------- ------------------
Total deposits 6,622,084 -
Other liabilities 20,258 -
---------------------- ------------------
Total liabilities 6,642,342 -
---------------------- ------------------
Commitments and contingent liabilities
Stockholders' equity
Special stock, par value $.01; 1,000,000 shares
authorized; none issued - -
Common stock, par value $.01; 10,000,000 shares
authorized; 1,627,950 and 150,000 shares issued
and outstanding, respectively 16,280 1,500
Capital surplus 8,088,317 748,500
Accumulated deficit (360,897) (140,526)
Accumulated other comprehensive loss (28,025) -
---------------------- ------------------
Total stockholders' equity 7,715,675 609,474
---------------------- ------------------
Total liabilities and stockholders' equity $ 14,358,017 $ 609,474
====================== ==================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC. 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 $ 12,719 $ -
Taxable securities 47,120
Federal funds sold 106,000 436
------------------- -------------------
Total interest income 165,839 436
------------------- -------------------
Interest expense on deposits 22,509 -
------------------- -------------------
Net interest income 143,330 436
Provision for loan losses 1,500 -
------------------- -------------------
Net interest income after provision for loan losses 141,830 436
------------------- -------------------
Other operating income 1,609 -
------------------- -------------------
Other expenses
Salaries and other employee benefits 156,377 7,751
Occupancy and equipment expenses 53,666 1,750
Other operating expenses 153,767 15,958
------------------- -------------------
363,810 25,459
------------------- -------------------
Net loss before income taxes (220,371) (25,023)
Income tax expense - -
------------------- -------------------
Net loss $ (220,371) $ (25,023)
------------------- -------------------
Other comprehensive losses:
Unrealized losses on securities available-for-sale
arising during period (28,025) -
------------------- -------------------
Comprehensive loss $ (248,396) $ (25,023)
=================== ===================
Losses per common share $ (0.21) $ (0.31)
=================== ===================
Weighted average shares outstanding 1,032,037 80,000
=================== ===================
Cash dividends per share of common stock $ - $ -
=================== ===================
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
--------------------- ----------------------
<S> <C>
OPERATING ACTIVITIES
Net loss $ (220,371) $ (25,023)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 18,015 -
Provision for loan losses 1,500 -
Increase in interest receivable (57,845) -
Increase in interest payable 17,796 -
Other operating activities (51,047) (87)
--------------------- ----------------------
Net cash used in operating activities (291,952) (25,110)
--------------------- ----------------------
INVESTING ACTIVITIES
Purchases of securities available-for-sale (5,238,279) -
Net increase in Federal funds sold (6,340,000) -
Net increase in loans (1,133,408) -
Purchase of premises and equipment (198,696) -
Decrease in interest-bearing deposits in banks - 55,000
Increase in organization costs (5,500) (15,495)
--------------------- ----------------------
Net cash provided by (used in) investing activities (12,915,883) 39,505
--------------------- ----------------------
FINANCING ACTIVITIES
Net increase in deposits 6,622,084 -
Proceeds from sale of common stock 7,389,750 -
--------------------- ----------------------
Net cash provided by financing activities 14,011,834 -
--------------------- ----------------------
Net increase in cash and due from banks 803,999 14,395
Cash and due from banks, beginning of period 61,928 13,576
--------------------- ----------------------
Cash and due from banks, end of period $ 865,927 $ 27,971
===================== ======================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest $ 4,713 $ -
Income taxes $ - $ 87
NONCASH TRANSACTION
Unrealized losses on securities available-for-sale $ 28,025 $ -
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
BUCKHEAD COMMUNITY BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
Buckhead Community Bancorp, Inc. (the Company) is a one-bank holding
company whose business is conducted by its wholly-owned subsidiary,
The Buckhead Community Bank, N.A. (the Bank). The Bank is a commercial
bank located in Atlanta, Fulton County, Georgia. The Company completed
the sale of its common stock and obtained all necessary regulatory
approvals to commence operations in February of 1998. The Company sold
a total of $8,139,750 of its common stock and capitalized the Bank
with $8,000,000. The Bank commenced operations on February 6, 1998.
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>
BUCKHEAD COMMUNITY BANCORP, INC. AND SUBSIDIARY
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
- -------------------
As of March 31, 1998, the Company had total assets of $14.3 million. The Company
raised $8.1 million from the sale of its common stock and has received $6.6
million in deposits since the commencement of operations on February 6, 1998.
The Company has invested the proceeds from its stock sale and deposit growth in
Federal funds sold ($6.3 million), U. S. Treasury and Agency securities ($5.2
million), and loans ($1.1 million). The Company expects that loan and deposit
growth will be significant during its early periods of operations. This growth
is not uncommon for de novo banks.
LIQUIDITY
- ---------
As of March 31, 1998, the Bank's liquidity ratio was far in excess of its target
ratio, due to its investment in Federal funds sold and other short-term assets.
As loan growth continues to increase, the Bank's liquidity will decrease rapidly
to levels more in line with its target ratio of 30%.
CAPITAL
- -------
The minimum capital requirements for banks and bank holding companies require a
leverage capital to assets ratio of at least 4%, core capital to risk-weighted
assets ratio of at least 4%, and total capital to risk-weighted assets of at
least 8%. The Company and the Bank's capital ratios are far in excess of these
regulatory requirements. As asset growth continues, these ratios will decrease
rapidly to levels closer to, but still in excess of the regulatory minimum
requirements.
RESULTS OF OPERATIONS
- ---------------------
The Company commenced its operations on February 6, 1998. Prior to the
commencement, the Company was engaged in activities involving the formation of
the Company, selling its common stock and obtaining necessary regulatory
approvals. The Company incurred operating losses totaling $219,000 during its
organizational period ($18,000 in 1996, $123,000 in 1997, and $78,000 in 1998).
The Company incurred total organizational and stock issue costs of $186,000 of
which $151,000 has been capitalized to be amortized over a period of sixty
months, and $35,000 has been recorded as a reduction of capital surplus. From
commencement of operations to the end of the first quarter, the Company has
incurred additional operating losses of $142,000. The Company expects that it
will continue to incur operating losses during its first full year of
operations, until the increase in loans and other interest-earning assets will
generate the income necessary to cover interest expense and other operating
expenses.
The Company was still in its organizational stage as of March 31, 1997.
Therefore, comparative analysis with March 31, 1998 is not presented.
7
<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 the 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 other 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.
8
<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.
9
<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.
BUCKHEAD COMMUNITY BANCORP, INC.
(Registrant)
DATE: _____________________ BY: /s/ Marvin Cosgray
-------------------------------------------
Marvin Cosgray, President and C.E.O.
(Principal Executive Officer)
DATE: _____________________ BY: /s/ Timothy D. Foreman
-------------------------------------------
Timothy D. Foreman, C.F.O. and Treasurer
(Principal Financial and Accounting
Officer)
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> MAR-31-1998 MAR-31-1997
<CASH> 865,927 0
<INT-BEARING-DEPOSITS> 0 0
<FED-FUNDS-SOLD> 6,340,000 0
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 5,210,254 0
<INVESTMENTS-CARRYING> 0 0
<INVESTMENTS-MARKET> 0 0
<LOANS> 1,133,408 0
<ALLOWANCE> 1,500 0
<TOTAL-ASSETS> 14,358,017 0
<DEPOSITS> 6,622,084 0
<SHORT-TERM> 0 0
<LIABILITIES-OTHER> 20,258 0
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 16,280 0
<OTHER-SE> 7,699,395 0
<TOTAL-LIABILITIES-AND-EQUITY> 14,358,017 0
<INTEREST-LOAN> 12,719 0
<INTEREST-INVEST> 47,120 0
<INTEREST-OTHER> 106,000 436
<INTEREST-TOTAL> 165,839 436
<INTEREST-DEPOSIT> 22,509 0
<INTEREST-EXPENSE> 22,509 0
<INTEREST-INCOME-NET> 143,330 436
<LOAN-LOSSES> 1,500 0
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 363,810 25,459
<INCOME-PRETAX> (220,371) (25,023)
<INCOME-PRE-EXTRAORDINARY> (220,371) (25,023)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (220,371) (25,023)
<EPS-PRIMARY> (.21) (.31)
<EPS-DILUTED> (.21) (.31)
<YIELD-ACTUAL> 4.68 0.00
<LOANS-NON> 0 0
<LOANS-PAST> 0 0
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 0 0
<CHARGE-OFFS> 0 0
<RECOVERIES> 0 0
<ALLOWANCE-CLOSE> 1,500 0
<ALLOWANCE-DOMESTIC> 1,500 0
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 0 0
</TABLE>
