<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number:
June 30, 1997 333-24435
ROCKDALE NATIONAL BANCSHARES, INC.
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(Exact name of small business issuer as specified in its charter)
Georgia 58-2292563
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 82030, Conyers, Georgia 30013
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (770) 760-7573
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Not Applicable
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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 Securities Exchange Act of 1934 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 No X
----- -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Common Stock, $1.00 Par Value -0-
- ------------------------------------ ---------------------------------------
Class Outstanding as of July 31, 1997
Transitional Small Business Disclosure Format:
Yes No X
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
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ROCKDALE NATIONAL BANCSHARES, INC.
(A Development Stage Corporation)
<TABLE>
<CAPTION>
BALANCE SHEET
June 30, 1997
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ASSETS
<S> <C>
Cash
Operating $ 1,310
Held in escrow 2,110
Investments--held to maturity 1,320,000
Fixed Assets 861,522
Accrued interest receivable 1,455
Prepaid expenses 4,967
Deferred organizational cost 28,272
Deferred subscription cost 7,926
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TOTAL ASSETS $ 2,227,562
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Notes payable
Operating $ 186,000
Fixed Assets 819,817
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TOTAL LIABILITIES 1,005,817
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STOCKHOLDERS' EQUITY
Common stock, par value $1.00 per share; 10,000,000 shares
authorized; 132,200 shares subscribed 132,200
Additional paid-in capital 1,189,800
Deficit accumulated during the development stage (100,255)
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TOTAL STOCKHOLDERS' EQUITY 1,221,745
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,227,562
==========
</TABLE>
See accompanying notes to financial statements.
2
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ROCKDALE NATIONAL BANCSHARES, INC.
(A Development Stage Corporation)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the Period from Inception (February 13, 1997) to June 30, 1997
================================================================================
<S> <C>
INCOME:
Interest $ 1,455
Other -
-----------
TOTAL INCOME 1,455
-----------
EXPENSES
Interest expense 10,084
Consulting fees 74,298
Legal services 3,749
Secretarial services 3,297
Other 10,282
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TOTAL EXPENSES 101,710
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NET LOSS BEFORE INCOME TAXES (100,255)
INCOME TAXES -
-----------
NET LOSS $ (100,255)
===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
ROCKDALE NATIONAL BANCSHARES, INC.
(A Development Stage Corporation)
<TABLE>
<CAPTION>
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period from Inception (February 13, 1997) to June 30, 1997
=======================================================================================================================
Deficit
Accumulated
Additional During the
Common Paid-in Development
Stock Capital Stage Total
-------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
Proceeds from the sale of organizational shares $ 50 $ 450 $ -- $ 500
Proceeds from the stock subscriptions received 132,200 1,189,800 -- 1,322,000
Surrender of organizational shares (50) (450) -- (500)
Net loss -- -- (100,255) (100,255)
--------- ----------- ------------ -------------
Balance, June 30, 1997 $ 132,200 $ 1,189,800 $ (100,255) $ 1,221,745
========= =========== ============ =============
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
ROCKDALE NATIONAL BANCSHARES, INC.
(A Development Stage Corporation)
STATEMENT OF CASH FLOWS
For the Period from Inception (February 13, 1997) to June 30, 1997
================================================================================
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (100,255)
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase in accrued interest receivable (1,455)
Increase in other assets (4,967)
Increase in deferred cost (36,198)
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NET CASH USED BY OPERATING ACTIVITIES (142,875)
------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities--held to maturity (1,320,000)
Purchase of premises and equipment (861,522)
------------
NET CASH USED BY INVESTING ACTIVITIES (2,181,522)
------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the sale of organizational shares 500
Proceeds from loan by organizers 85,000
Proceeds from loan--operating 186,000
Proceeds from loan--fixed assets 819,817
Proceeds from common stock subscriptions 1,322,000
Repayment of loan by organizers (85,000)
Repayment of organizational shares (500)
------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,327,817
------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 3,420
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD --
------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,420
============
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
ROCKDALE NATIONAL BANCSHARES, INC.
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
================================================================================
(1) ORGANIZATION
Rockdale National Bancshares, Inc. (the "Company") was formed to
establish Rockdale National Bank (the "Bank"). The organizers of the Company
filed a joint application to charter the Bank with the Office of the Comptroller
of the Currency (the "OCC") and the Federal Deposit Insurance Corporation (the
"FDIC"). Upon receipt of preliminary approval from the OCC, the Company will
file an application with the Board of Governors of the Federal Reserve System
and the Georgia Department of Banking and Finance to become a bank holding
company. Provided the necessary capital is raised and the necessary regulatory
approvals are received, it is expected that operations will commence in the
fourth quarter of 1997.
The accounting and reporting policies of the Company conform to
generally accepted accounting principles and to general practices within the
banking industry.
The Company plans to raise a minimum of $6,100,000 through an offering
of its $1.00 par value common stock. The organizers and directors expect to
subscribe for a minimum of approximately $1,550,000 of the Company's stock.
Upon the completion of the sale of common stock and the opening of the
Company, incurred organization costs, estimated to be $24,000 (consisting
principally of legal, accounting and incorporation fees), will be deferred and
amortized over the Company's initial sixty months of operations. Offering
expenses, estimated to be $17,500 (consisting principally of direct, incremental
costs of the stock offering), will be deducted from the proceeds of the
offering, and pre-opening expenses (consisting principally of salaries, overhead
and other operating costs) will be charged against the initial period's
operating results.
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and amounts due from bank.
(2) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $100,255 for the period from
inception (February 13, 1997) to June 30, 1997. Operations through June 30,
1997, relate primarily to expenditures for incorporating and organizing the
Company.
In the early stages of organization, the Company was totally funded by
the organizers. In April 1997, the organizers established lines of credit to pay
back the organizers (without interest) and provide additional operating funds
until permanent funding is obtained. See Note 3. Management believes that the
current level of expenditures is well within the financial capabilities of the
organizers and adequate to meet existing obligations and fund current
operations. However, obtaining final regulatory approvals and commencing banking
operations is dependent on successfully completing the stock offering and
obtaining regulatory approval.
To provide permanent funding for its operations, the Company is
currently offering a minimum of 610,000 and a maximum of 800,000 shares of its
common stock, $1.00 par value, at
6
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ROCKDALE NATIONAL BANCSHARES, INC.
(A Development Stage Corporation)
NOTES TO FINANCIAL STATEMENTS
================================================================================
$10.00 per share in an initial public offering. Costs related to the
organization and registration of the Company's common stock will be paid from
the gross proceeds of the offering. Should subscriptions for the minimum
offering not be obtained, amounts paid by subscribers with their subscriptions
will be returned and the offer withdrawn.
(3) NOTES PAYABLE
On April 2, 1997, the organizers obtained a $450,000 line of credit
from a bank at .5% below adjustable prime rate or currently 8%. The line of
credit is unsecured and requires interest only payments on a quarterly basis,
with total principal plus interest due at maturity on July 2, 1998. Personal
guarantees of the organizers were required by the lender. This line of credit is
intended to fund the branch building purchase and renovations. As of June 30,
1997, approximately $399,900 has been drawn against the line of credit.
On April 4, 1997, the organizers obtained a $300,000 line of credit
from a bank at .5% below adjustable prime rate or currently 8%. The line of
credit is unsecured and requires interest only payments on a quarterly basis,
with total principal plus interest due at maturity on April 4, 1998. Personal
guarantees of the organizers were required by the lender. This line of credit
has been used to repay (without interest) the organizers' initial funding of the
Company and to provide additional operating funds until permanent funding is
obtained. As of June 30, 1997, approximately $186,000 has been drawn against
this line of credit.
On June 11, 1997, the organizers obtained a $625,000 line of credit
from a bank at adjustable prime rate or currently 8%. The line of credit is
unsecured and requires interest only payments on a quarterly basis, with total
principal plus interest due at maturity on April 4, 1998. Personal guarantees of
the organizers were required by the lender. This line of credit is intended to
fund the main office land purchase and construction. As of June 30, 1997,
approximately $419,900 has been drawn against this line of credit.
(4) COMMITMENTS
The Company entered into an employment agreement with its President and
Chief Executive Officer. The agreement continues for a period ending on February
21, 2000, and provides for an annual base salary of $90,000 per year until the
Bank opens for business and $100,000 per year after opening, in addition to a
$700 per month automobile allowance and such other benefits as health,
hospitalization, disability and term life insurance generally made available to
other senior executives of the Company and the Bank.
Until construction of the Bank building is complete, the Company will
temporarily operate out of offices in a modular bank facility located at the
intersection of 1000 Georgia Highway 138 and Miller's Chapel Road. The Company
will lease the facility pursuant to a month-to-month lease at the monthly rental
of $3,300 after spending approximately $20,000 for site preparation and facility
set-up work. It is estimated that the Company and the Bank will operate out of
this temporary facility for approximately twelve months until construction of
the headquarters building has been completed.
7
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
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Rockdale National Bancshares, Inc. (the "Company") is in the
development stage. The Company has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 for an offering of a minimum of
610,000 shares and a maximum of 800,000 shares of the Company's common stock,
$1.00 par value per share (the "Offering"). The Company has funded its start-up
and organization costs through advances from the organizers of the Company (the
"Organizers"). The Organizers have advanced $85,000 to fund the Company's
start-up and organizational expenses. On April 4, 1997, the Organizers obtained
a $300,000 line of credit to repay (without interest) the Organizers' initial
funding and to provide additional operating funds until permanent funding is
obtained. Currently, the Offering is expressly conditioned upon fulfillment of
the following conditions: (a) not less than $6,100,000 shall have been deposited
in a subscription escrow account, (b) the Company shall have received approval
from the Federal Reserve Board and the Georgia Department of Banking and Finance
of its application to become a bank holding company, and (c) the Company shall
not have canceled the Offering prior to the time funds are withdrawn from the
subscription escrow account. In the event that the requisite conditions are met,
a portion of the proceeds of the Offering will be used to repay amounts advanced
and contributed to capital by the Organizers, to the extent such repayment is
reasonable and not detrimental to the operations of the Company or Rockdale
National Bank (the "Bank"). Total organizational expenses and deferred
registration costs for the period from inception to June 30, 1997, amounted to
$36,198. These expenses include consultant fees ($5,848), legal fees ($5,000),
regulatory application fees ($15,000), Securities and Exchange Commission
registration fee ($2,424), and other expenses ($7,926). In June 1997, the
Company obtained a line of credit of $625,000 which was utilized to purchase the
land for the Bank's headquarters as well as the construction costs associated
therewith. The line of credit is due on April 4, 1998 and bears interest at the
prime rate.
Subscription funds received during the Offering contemplated will
be placed in an escrow account and invested in direct obligations of the United
States government, in short-term insured certificates of deposit and/or money
market management trusts for short-term obligations of the United States
government, with maturities not to exceed 90 days. As of July 31, 1997, the
Company had received subscription funds totaling $1,322,000.
In the opinion of the Company, the minimum proceeds of the Offering
will satisfy the cash requirements of the Company and the Bank for their
respective first years of operations. It is not anticipated that the Company
will find it necessary to raise additional funds to meet expenditures required
to operate the business of the Company and/or the Bank during the next 12
months. All anticipated material expenditures for such period have been
identified and provided for out of the proceedings of the Offering, including
the purchase of land and construction of the Bank facility ($1,362,000) and
purchase of furniture, fixtures and equipment ($535,000). It is anticipated that
the Bank will commence operations with 14 employees, pending completion of the
permanent bank facility in late 1997.
Cautionary Statement Concerning Forward-Looking Statements.
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Certain statements contained in this filing are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, such as statements relating to financial results and plans for future
business development activities, and are thus prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, competition and other
uncertainties detailed from time to time in the Company's Securities and
Exchange Commission filings.
8
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
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(a) Exhibits. The following exhibit is filed with this report:
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
27 Financial Data Schedule
(for SEC use only)
</TABLE>
(b) Reports on Form 8-K. No report on Form 8-K was filed during
the quarter ended June 30, 1997.
9
<PAGE>
SIGNATURES
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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.
Dated: August 12, 1997 By: /s/ William L. Daniel
------------------------------------
William L. Daniel
President and Chief Executive Officer
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF ROCKDALE NATIONAL BANCSHARES, INC. (A DEVELOPMENT STAGE
CORPORATION) FOR THE PERIOD FROM INCEPTION (FEBRUARY 13, 1997) TO JUNE 30, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,420
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 1,320,000
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 2,227,562
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,005,817
<LONG-TERM> 0
0
0
<COMMON> 132,200
<OTHER-SE> 1,089,545
<TOTAL-LIABILITIES-AND-EQUITY> 2,227,562
<INTEREST-LOAN> 0
<INTEREST-INVEST> 1,455
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,455
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,455
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 101,710
<INCOME-PRETAX> (100,255)
<INCOME-PRE-EXTRAORDINARY> (100,255)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (100,255)
<EPS-PRIMARY> (.76)
<EPS-DILUTED> (.76)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
