As filed with Securities and Exchange Commission on September 10, 1997.
Registration Statement No. 333-___________.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
Form SB-2
Registration Statement
Under
The Securities Act of 1933
----------------------
America's Bancorp, Inc.
(Name of Small Business Issuer in its Charter)
<TABLE>
<S> <C> <C>
Virginia 6021 Applied For
(State or Other Jurisdiction of Incorporation (Primary Standard Industrial (IRS Employer I.D. Number)
or Organization) Classification Code Number)
</TABLE>
1815 16th Street, NW, Washington, DC 20009
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrants' Principal Executive Offices)
Linwood C. Cotman, Jr., President, America's Bancorp, Inc.
1815 16th Street, NW, Washington, DC 20009
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
Copies To:
David H. Baris, Esquire
Noel M. Gruber, Esquire
Kennedy, Baris & Lundy, L.L.P.
4719 Hampden Lane, Suite 300, Bethesda, Maryland 20814
Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
<S> <C> <C> <C> <C>
Title of Each Class of Securities Proposed Maximum Proposed Maximum Amount of
to be Registered Amount to be Registered Offering Price Per Unit Aggregate Offering Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.01 par value $10,000,000 $10.00 $10,000,000 $3030.30
====================================================================================================================================
</TABLE>
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION
AMERICA'S BANCORP, INC.
1,000,000 SHARES COMMON STOCK
($.01 PAR VALUE)
$10.00 PER SHARE
MINIMUM PURCHASE - 500 SHARES ($5,000)
AMERICA'S BANCORP, INC., a proposed bank holding company organized
under the laws of the State of Virginia (the "Company"), is hereby offering (the
"Offering") up to 1,000,000 shares (the "Shares") of its common stock, $.01 par
value (the "Common Stock"), at a price of $10.00 per Share (the "Subscription
Price").
Prospective purchasers should note that: (1) neither the Company nor
its proposed subsidiary, America's Bank, National Association (in organization)
(the "Bank") has engaged in business operations, and the Bank has not yet been
authorized to conduct banking activities; (2) 73,500 of the Shares have been
reserved for sale to Directors and Officers of the Company and the Bank; and (3)
the Subscription Price has been determined arbitrarily by the Board of Directors
of the Company and bears no relationship to assets, earnings, book value or any
other established measure of value. At present there is no public market for the
Shares, and there is no assurance that an active trading market will develop as
a result of this offering. (See "RISK FACTORS").
This offering is being made directly by the Company through its
Directors and Officers, and through a registered broker-dealer when required by
state law, on a minimum-maximum basis. No Shares will be sold unless acceptable
subscriptions for at least 650,000 Shares (including Shares reserved for sale to
Directors and Officers) are received by the Company. The minimum number of
Shares for which any investor may subscribe is 500, for a minimum investment of
$5,000, subject to the right of the Company to permit smaller subscriptions in
its discretion. The maximum number of Shares for which any investor may
subscribe is five percent of the total number of Shares sold in the offering, or
a maximum investment of $500,000 if all of the Shares offered hereby are sold,
or $350,000 if the minimum number of Shares are sold, subject to the right of
the Company to permit larger subscriptions in order to ensure the sale of the
minimum number of shares offered hereby, or otherwise in its discretion. Subject
to the foregoing and the Company's right to reject any subscription in whole or
in part, all subscriptions, once delivered to the Company, are irrevocable by
the subscriber.
------------------
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, THE COMPTROLLER OF THE CURRENCY OR ANY OTHER
FEDERAL OR STATE SECURITIES OR BANK REGULATORY AGENCY, NOR HAVE ANY OF THE
FOREGOING PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF
THE COMPANY'S PROPOSED BANKING SUBSIDIARY, AND ARE NOT, AND WILL NOT BE, INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
-----------------
This offering will expire on ________, 1997, unless terminated earlier
or extended by the Company in its sole discretion. The offering may be extended
for periods of up to thirty (30) days without notice; however, under no
circumstances will the offering be extended beyond _______, 1997. (See "THE
OFFERING--General"). Subscribers will be unable to obtain a refund of their
funds during the offering period and, if the offering is successful, will not be
entitled to receive interest on funds held in escrow. See "THE OFFERING -
Acceptance and Refunding of Subscriptions; Interest").
-----------------
SEE "RISK FACTORS" AT PAGE 5 FOR A DISCUSSION OF CERTAIN MATTERS THAT
SHOULD BE CAREFULLY CONSIDERED BY PROSPECTIVE INVESTORS IN THE COMMON STOCK
OFFERED HEREBY.
<PAGE>
<TABLE>
<CAPTION>
=============================================================================================================================
UNDERWRITING DISCOUNTS AND PROCEEDS TO ISSUER(2)
PRICE TO PUBLIC COMMISSIONS(1)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share Minimum $10.00 $0 $10.00
Per Share Maximum $10.00 $0 $10.00
- -----------------------------------------------------------------------------------------------------------------------------
Total Minimum $ 6,500,000 $0 $10,000,000
Total Maximum $10,000,000 $0 $10,000,000
=============================================================================================================================
</TABLE>
(1) The Shares are being offered by the Directors and Officers of the Company,
and through a registered broker-dealer when required by state law. Directors and
Officers will not receive any special compensation for selling the Shares, but
may be reimbursed for reasonable expenses, if any, incurred by them in
connection with selling Shares. All proceeds of the offering will be placed in
an escrow account with F&M Bank - Allegiance, Bethesda, Maryland, pending
receipt of subscriptions for not less than the minimum number of Shares. (See
"THE OFFERING--Escrow Account"). If for any reason the Bank does not receive its
charter to open for business, or the minimum number of Shares are not subscribed
for by the Termination Date, including extensions, if any, all subscription
funds will be promptly refunded to subscribers with interest thereon calculated
as described herein. (See "THE OFFERING--Acceptance and Refunding of
Subscriptions; Interest").
(2) Before deducting expenses of this offering which are estimated at $ 60,000
($0.09 per share if the minimum number of Shares are sold or $0.06 per share if
the maximum number of Shares are sold), including legal and accounting fees and
printing and other expenses.
------------------
THE DATE OF THIS PROSPECTUS IS _________, 1997
<PAGE>
To be inserted in landscape text along the left edge of cover page
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold, nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
<PAGE>
AVAILABLE INFORMATION
The Company is a newly organized company and to date has not issued any
capital stock or engaged in any business operations. As such, it is not
currently subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, although it will become subject to the periodic reporting
requirements following the completion of this offering, until such time as it
has fewer than three hundred shareholders of record. The Company will furnish
stockholders with annual reports containing audited financial statements. It may
also send other reports to keep stockholders currently informed concerning its
affairs.
The Company has filed a Registration Statement on Form SB-2 with the
Securities and Exchange Commission (the "Commission"), of which this Prospectus
forms a part. This Prospectus does not contain all of the information contained
in the Registration Statement and the exhibits thereto, certain parts of which
have been omitted in accordance with rules of the Commission. Any statements
contained herein concerning the provisions of any document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission are not
necessarily complete, and, in each instance, reference is made to the copy of
the document so filed for a more complete description of the matter involved,
and each such statement is qualified in its entirety by such reference. The
Registration Statement and the exhibits thereto are on file with, and may be
examined without charge, at the following public reference facilities of the
Commission: 450 Fifth Street, NW, Room 1024, Washington, DC 20549; 7 World Trade
Center, Suite 1300, New York, New York, 10048; and the Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material may be obtained, at prescribed rates, from the Public Reference Section
of the Commission 450 Fifth Street, NW, Room 1024, Washington, DC 20549. The
Commission maintains an Internet web site that contains information, including
registration statements, of issuers who file electronically with the Commission.
The address of that web site is http://www.sec.gov.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THE BANK SINCE THE
DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY
ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED
OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
- 2 -
<PAGE>
PROSPECTUS SUMMARY
The following information is qualified in its entirety by reference to
the more detailed information contained elsewhere in this Prospectus.
Prospective purchasers are urged to carefully read the entire Prospectus,
including the information under "RISK FACTORS", before making any investment
decision.
THE COMPANY AND THE BANK
The Company was incorporated under the laws of the State of Virginia on
September 4, 1997, to be a bank holding company and, subject to regulatory
approvals, will initially use $6,000,000 of the proceeds of this offering to
purchase all of the then-issued shares of the Bank's Common Stock. If more than
$6,500,000 is raised through this offering, the Company and the Bank may seek
approval from the Comptroller of the Currency to use all or a portion of the
additional proceeds for the purpose of purchasing additional shares of the
Bank's Common Stock (or otherwise contribute all or a portion of such additional
proceeds to the Bank), or may retain the additional proceeds in the Company to
allow it to engage in other business activities permitted for bank holding
companies. (See "SUPERVISION AND REGULATION -- The Company"). Whether or not the
Company and the Bank seek approval from the Comptroller of the Currency to
purchase additional shares of the Bank's common stock or otherwise contribute
such funds to the Bank will depend on the total amount raised in this offering.
In the event such approval is sought, the proceeds in excess of $6,000,000 will
be invested in Treasury securities, bank money market accounts and short-term
bank certificates of deposit pending receipt of the necessary regulatory
approvals.
Neither the Company nor the Bank has commenced operations and neither
will do so unless this offering is completed and the requisite approvals of the
Comptroller of the Currency are obtained. Neither the Company nor the Bank has
issued any stock and neither will do so until at least 650,000 Shares are
subscribed for pursuant to this offering. The assets of the Company as of August
31, 1997, as shown on its balance sheet were $[ ], consisting of cash,
organization expenses, and prepaid expenses. Advances from organizers have been
the source of funding for the Company. These advances are to be repaid from the
proceeds of this offering.
The Bank has not yet engaged in any business operations and is in the
process of obtaining the approvals necessary to commence operations as a
commercial bank. It is anticipated that the Bank will open in the first quarter
of 1998, although no assurances can be given as to the date actual operations
will begin. The executive offices of the Company and the Bank will be located in
the vicinity of 11th and G Streets, NW, Washington, DC. Temporary offices of the
Company and the Bank are located at 1815 16th Street, NW, Washington, DC, and
its telephone number is (202) 462-6515. (See "THE COMPANY AND THE BANK").
THE OFFERING
Shares Offered Hereby Up to 1,000,000 shares of Common Stock.
Acceptable subscriptions for a minimum of
650,000 shares must be received before any
shares will be sold in this offering.
Subscription Price $10.00 per Share
Termination Date _______________, 1997, unless earlier terminated
or extended by the Company to a date not later
than _____________, 1997.
Minimum Subscription 500 Shares ($5,000), subject to the right of
the Company to permit smaller subscriptions in
its discretion.
- 3 -
<PAGE>
Maximum Subscription Five percent of the total number of Shares sold
in the offering, subject to the right of the
Company to permit larger purchases in order to
ensure the sale of the minimum number of shares.
to be sold in the offering, or otherwise in its
discretion.
Gross Proceeds of the Offering $6,500,000 if the minimum number of shares are
subscribed for. $10,000,000 if the maximum
number of shares are subscribed for.
Estimated Net Proceeds of the
Offering $6,500,000 if the minimum number of shares are
subscribed for; $10,000,000 if the maximum
number of shares are subscribed for, in each
case before deduction of expenses of the
offering estimated at $60,000.
Use of Proceeds
The Company will use the first $6,000,000 of
the net proceeds of the Offering to purchase
all of the then-issued shares of common stock
of the Bank. Net proceeds in excess of
$6,500,000 will, subject to a determination by
the Board of Directors of the Company to
contribute all or part of such excess proceeds
to the Bank, and regulatory approval of such
investment, be invested in Treasury securities,
bank money market accounts or certificates of
deposit. Any remaining net proceeds will be
used as working capital for the Company.
The Bank will utilize the funds received from
the Company to pay any organizational expense,
furnish and equip a facility for the Bank; to
provide working capital and for general
corporate purposes of the Bank. (See "USE OF
PROCEEDS").
RISK FACTORS
Investment in the Shares offered hereby involves certain risks,
including but not limited to the possibility that there will not be a trading
market, active or otherwise, for the Shares, the lack of an operating history of
the Company and the Bank and the fact that the Bank will be faced with
competition from other financial institutions that have substantially greater
financial resources than will the Bank. Investors should carefully consider the
information contained herein under "RISK FACTORS".
- 4 -
<PAGE>
RISK FACTORS
An investment in the securities offered by this Prospectus involves
various risks. Prospective purchasers should consider the following before
making a decision to purchase any Shares offered hereby.
Limited Trading Market. While the Shares being offered hereby will be
freely transferable by most shareholders immediately upon issuance, it is not
anticipated that there will be an active market for trading the Shares as a
result of this offering, and no assurance can be given that an active or
established trading market will develop in the foreseeable future. The Company
has no current plans to list the Shares on any securities exchange or on The
Nasdaq Stock Market National Market System ("Nasdaq/NMS") or Small Cap Market
("Nasdaq"). There can be no assurance that trading in the over-the-counter
market or through brokers or market makers will develop. As a result, an
investment in the Shares offered hereby may be relatively illiquid.
Lack of Operating History and Profitability. The Company and the Bank
are presently being organized and neither has any prior operating history. Since
the Company will function as a holding company, its profitability will primarily
depend on the results of the Bank's operations. It is expected that the Bank
will incur operating losses during its initial phase of operation, and no
assurance can be given as to its long-term profitability. (See "BUSINESS OF THE
COMPANY").
Subscription Price. The public Subscription Price of the Shares offered
hereby has been arbitrarily determined by the Board of Directors of the Company,
and no independent investment banking firm was retained to assist in such
determination. The $10.00 per Share price bears no relationship to the assets,
earnings, book value or other established measure of value of the Company or the
Bank; rather, in fixing the price the Board considered, among other things, the
subscription prices of securities offered by other newly organized financial
institutions and bank holding companies.
Dividend Policy. The Bank will be the wholly owned subsidiary of the
Company and, initially, its only revenue producing operation. No assurance can
be given that the Bank's earnings, if any, will ever permit the payment of any
dividends to the Company, and, similarly, no assurance can be given that the
Company's earnings, if any, will ever permit the payment of dividends to
stockholders. Approvals of the Comptroller of the Currency may be required prior
to payment of dividends by the Bank to the Company under certain circumstances.
Competition. In the Greater Washington, DC market, generally, and in
the Bank's primary service area in the District of Columbia in particular,
competition is exceptionally keen in the business and consumer banking markets
both from large and community commercial banking institutions. The Bank will
also compete with savings and loan associations, credit unions, mortgage
companies, brokerage and investment firms, insurance companies and others
providing financial services. Among the advantages that many of these
institutions have over the Bank are their abilities to finance extensive
advertising campaigns, maintain large branch networks and to directly offer
certain services, such as international banking and trust services, which will
not be offered directly by the Bank. Further, the greater capitalization of the
larger institutions allows for substantially higher lending limits than the
Bank. (See "BUSINESS OF THE COMPANY - Competition").
Monetary Policy and Economic Conditions. The operating income and net
income of the Bank will depend to a great extent on "rate differentials," i.e.,
the difference between the income the Bank receives from its loans, securities
and other assets and the interest it pays on its deposits and other liabilities.
These rates are highly sensitive to many factors which are beyond the control of
the Bank, including general economic conditions and the policies of various
governmental and regulatory authorities, in particular the Board of Governors of
the Federal Reserve System. (See"SUPERVISION AND REGULATION--The Bank").
- 5 -
<PAGE>
Government Regulation. The Company and the Bank will be subject to
extensive governmental regulation, control and examination by the Comptroller of
the Currency, the Board of Governors of the Federal Reserve System and the
Federal Deposit Insurance Corporation. The regulations of these various agencies
will govern most aspects of the Company's and the Bank's business, including
investments, loans, borrowings, dividends, setting of required reserves,
location and number of branches. (See "SUPERVISION AND REGULATION").
Allocation of Shares. The Directors and Officers of the Company and the
Bank have been given priority to purchase 73,500 of the Shares offered hereby
and are expected to do so. Directors of the Company and the Bank, or their
affiliates may, but are not obligated to, purchase additional Shares in the
offering. In determining which other subscriptions to accept, in whole or in
part, the Company will consider the order in which subscriptions are received, a
subscriber's potential to do business with, or to direct business to, the Bank
and the Company's desire to have a broad distribution of stock ownership. (See
"THE OFFERING--General").
Repayment of Organizational Expenses. Organizers of the Company have,
as of August 31, 1997, advanced $$150,000 to the Company to cover organization
costs, pre-operating expenses and the acquisition of certain fixed assets of the
Company and the Bank. The Company's ability to repay such advances, or loans
incurred to repay such advances, depends upon the success of this offering. (See
"EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT--Certain
Transactions").
Voting Control of the Bank. The Board of Directors of the Company will
elect the Directors of the Bank, and the stockholders of the Company will not be
entitled to directly elect the Directors of the Bank.
THE COMPANY AND THE BANK
The Company was incorporated under the laws of the State of Virginia on
September 4, 1997, to operate as a bank holding company. An application will be
filed on behalf of the Company with the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") for prior approval of the Federal
Reserve Board to become a bank holding company pursuant to the Bank Holding
Company Act of 1956, and, in connection therewith, to purchase all of the
capital stock to be issued by the Bank.
The application to organize the Bank was filed with the Comptroller of
the Currency on August 1, 1997, 1997. The application contemplates sale of all
of the shares of the Bank's common stock to the Company for an aggregate price
of $6,000,000. In the event more than $6,500,000 in net proceeds is raised in
this offering, the Company and Bank may apply to the Comptroller of the Currency
to purchase additional shares of common stock of the Bank (or to otherwise
contribute such additional proceeds to the Bank) or may retain the additional
proceeds in the Company for the purpose of allowing the Company to engage in
business activities permitted for bank holding companies. (See "SUPERVISION AND
REGULATION - The Company").
An application for insurance of the Bank's deposits was filed with the
Federal Deposit Insurance Corporation ("FDIC") on September 4, 1997.
The Bank anticipates that it will open in the first quarter of 1998, or
as soon thereafter as practicable. Meeting such targeted opening date is
dependent upon a number of factors which may be beyond the control of the Bank,
including the timely completion of this offering, approval by the federal
banking agencies, final development of the Bank's facility and the hiring of
employees. Any delay in the commencement of operations could increase the
estimated pre-opening expenses of the Bank.
Neither the Company nor the Bank has commenced operations and neither
will do so unless this offering is successfully completed and the Bank meets the
conditions of the Comptroller of the Currency to receive its Certificate of
Authority to Commence the Business of Banking (the "Charter"), and of the FDIC
to receive deposit insurance and the Company obtains approval from the Federal
Reserve Board to become a bank holding company.
- 6 -
<PAGE>
THE OFFERING
GENERAL
The Company is hereby offering for sale up to 1,000,000 shares (the
"Shares") of its common stock, $.01 par value (the "Common Stock"), at a price
of $10 per Share (the "Subscription Price"). No Shares will be sold unless
acceptable subscriptions for a minimum of 650,000 Shares are received by the
Company. It is expected that Directors and Officers of the Company will purchase
approximately 73,500 of the Shares offered hereby. Subscriptions to purchase
Shares must be received by the Company no later than 5:00 p.m., eastern time, on
_________, 1997, unless the offering is terminated earlier or extended by the
Company. The Company reserves the right to terminate the offering at any time
prior to _____, 1997, or to extend the expiration date for periods of up to
thirty (30) days each, without notice to subscribers; however, under no
circumstances will the offering be extended beyond ______________, 1997. The
date this offering terminates, whether on ___________, 1997, or before or after,
shall be referred to herein as the "Termination Date".
Investors must subscribe for the purchase of a minimum of 500 Shares
(for a minimum investment of $5,000), subject to the Company's right to permit
smaller subscriptions in its discretion. It is not anticipated that any person
will be permitted to purchase more than five percent (5%) of the total number of
Shares sold in the offering, except in the event such purchases are necessary to
ensure the minimum number of Shares are subscribed and paid for in this
offering. The Company reserves the right, however, to permit such larger
purchases in its discretion.
THE COMPANY RESERVES THE RIGHT TO ACCEPT OR REJECT ANY SUBSCRIPTION IN
WHOLE OR IN PART. IN DETERMINING WHETHER TO ACCEPT ANY SUBSCRIPTION, IN WHOLE OR
IN PART, THE DIRECTORS MAY, IN THEIR SOLE DISCRETION, TAKE INTO ACCOUNT THE
ORDER IN WHICH SUBSCRIPTIONS ARE RECEIVED, A SUBSCRIBER'S POTENTIAL TO DO
BUSINESS WITH, OR TO DIRECT CUSTOMERS TO, THE BANK AND THE COMPANY'S DESIRE TO
HAVE A BROAD DISTRIBUTION OF STOCK OWNERSHIP, AS WELL AS LEGAL OR REGULATORY
RESTRICTIONS. NOTWITHSTANDING THE COMPANY'S UNFETTERED RIGHT OF REJECTION, ONCE
RECEIVED BY THE COMPANY, ALL SUBSCRIPTIONS ARE IRREVOCABLE BY THE SUBSCRIBER.
No underwriting discounts or commissions will be paid in connection
with the sale of the Shares offered hereby. To the extent permitted by state
laws, the offering will be made by Officers and Directors of the Company, who
will solicit subscriptions from prospective stockholders. Such person will not
receive any special compensation for such services, but will be reimbursed for
reasonable expenses, if any, incurred by them in connection therewith.
When required by state law, the offering will be made through a
registered broker-dealer. In those states, such broker-dealer will receive
executed subscription documents (which will be promptly forwarded to the
Company) and subscription proceeds (which will be forwarded to the escrow agent
by noon of the business day following receipt). No such broker-dealer will
independently assess the information in this Prospectus or determine the value
of the Common Stock or the reasonableness of the Subscription Price. As of the
date hereof, the Company has not identified any broker-dealer who will provide
such services to the Company in connection with the offering.
METHOD OF SUBSCRIPTION
Persons who wish to participate in the offering and invest in the
Company may do so by completing and signing the Subscription Agreement
accompanying this Prospectus and delivering the completed Subscription Agreement
to the Company prior to the Termination Date, together with payment in full of
the Subscription Price of all Shares subscribed for. Such payment in full must
be by (a) check or bank draft drawn upon a U.S. bank or; (b) postal, telegraphic
or express money order payable to "F&M Bank - Allegiance, Escrow Agent for
America's Bancorp, Inc."; or (c) wire transfer of funds directed to F&M Bank -
Allegiance, ABA No. ______, America's Bancorp, Inc. Escrow Account. The
Subscription Price will be deemed to have been received by the Company only upon
(i) clearance of any uncertified check, (ii) receipt by the Company of any
certified check or bank draft drawn upon a U.S. bank or of any postal,
- 7 -
<PAGE>
telegraphic or express money order or (iii) receipt of good funds in the escrow
account designated above. A postage paid, addressed envelope is included for the
return of Subscription Agreement. If paying by uncertified personal check,
please note that the funds paid thereby may take at least five business days to
clear. Accordingly, persons who wish to pay the Subscription Price by means of
uncertified personal check are urged to make payment sufficiently in advance of
the Termination Date to ensure that such payment is received and clears by such
date. All funds received in payment of the Subscription Price shall be deposited
at F&M Bank Allegiance ("F&M Bank") in the America's Bancorp, Inc. Escrow
Account and, pending closing of the Offering, shall be invested at the direction
of the Company in short-term certificates of deposit, short-term obligations of
the United States, any state or agency thereof, or money market mutual funds
investing in the foregoing instruments.
The address to which Subscription Agreement and payment of the
Subscription Price should be delivered is:
America's Bancorp, Inc.
1815 16th Street, N.W.
Washington, D.C. 20009
Subscribers in any jurisdiction in which applicable law requires a
registered broker-dealer will be separately advised of the procedure for
submitting their subscriptions.
If the aggregate Subscription Price paid by a subscriber is
insufficient to purchase the number of Shares that such person indicates are
being subscribed for, or if a subscriber does not specify the number of Shares
to be purchased, then such subscriber will be deemed to have subscribed to
purchase Shares to the full extent of the payment tendered (subject only to the
reduction to the extent necessary to comply with any regulatory limitation or
conditions imposed by the Company in connection with the Offering). If the
Subscription Price paid by a subscriber exceeds the amount necessary to purchase
the number of Shares for which such subscriber has indicated an intention to
subscribe, then such subscriber will be deemed to have subscribed to purchase
Shares to the full extent of the excess payment tendered (subject only to
reduction to the extent necessary to comply with any regulatory limitation or
conditions imposed by the Company in connection with the Offering).
Notwithstanding the foregoing, the Company reserves the right to reject, in
whole or in part any subscription. In determining whether to accept any
subscription, in whole or in part, the Directors may, in their sole discretion,
take into account the order in which subscriptions are received, a subscriber's
potential to do business with, or to direct customers to, the Bank and the
Company's desire to have a broad distribution of stock ownership, as well as
legal or regulatory restrictions.
THE FULL SUBSCRIPTION PRICE FOR THE SHARES MUST BE INCLUDED WITH THE
APPLICATION. FAILURE TO INCLUDE THE FULL SUBSCRIPTION PRICE WITH THE APPLICATION
MAY CAUSE THE COMPANY TO REJECT THE APPLICATION.
The method of delivery of Subscription Agreements and payment of the
Subscription Price will be at the election and risk of persons participating in
the Offering, but of sent by mail, it is recommended that such Subscription
Agreements and payments be sent by registered mail, return receipt requested,
and that a sufficient number of days be allowed to ensure delivery to the
Company and clearance of payment prior to the Termination Date.
All questions concerning the timeliness, validity, form and eligibility
of Subscription Agreements received will be determined by the Company, whose
determinations will be final and binding. The Company in its sole discretion may
waive any defect or irregularity, or permit any defect or irregularity to be
corrected within such time as it may determine, or reject the purported
subscription. Subscription Agreements will not be deemed to have been received
or accepted until all irregularities have been waived or cured within such time
as the Company determines in its sole discretion. Neither the Company nor any
broker-dealer utilized by the Company will be under any duty to give
notification of any defect or irregularity in connection with the submission of
Subscription Agreements or incur any liability for failure to give such
notification.
- 8 -
<PAGE>
Subscriptions for common stock which are received by the Company or its
broker-dealer may not be revoked by subscribers.
ESCROW ACCOUNT
In connection with the sale of the Shares by the Company, an escrow
account has been established at F&M Bank. All funds submitted with Subscription
Agreements will be sent directly to F&M Bank, for deposit in said escrow
account. Subscription funds may be invested temporarily in short-term government
obligations, bank money market accounts, or certificates of deposit. The funds
in the escrow account will be held by F&M Bank and will not be released until
the acceptance by the Company of subscriptions for not less than the minimum
number of Shares offered hereby.
ACCEPTANCE AND REFUNDING OF SUBSCRIPTIONS; INTEREST
Subscription Agreements are not binding on the Company until accepted
by the Company, which reserves the right to reject, in whole or in part, in its
sole discretion, any Subscription Agreement or, if the offering is
oversubscribed, to allot a lesser number of Shares than the number for which a
person has subscribed. In determining the number of Shares to allot to each
subscriber in the event the offering is oversubscribed, the Directors, in their
sole discretion, may take into account the order in which subscriptions are
received, a subscriber's potential to do business with, or to direct customers
to, the Bank and the Company's desire to have a broad distribution of stock
ownership, as well as legal or regulatory restrictions. The Company will decide
which Subscription Agreements to accept within three days after the Termination
Date, including extensions, if any.
In the event the Company rejects all or a portion of any subscription,
the escrow agent will promptly refund to the subscriber by check sent by
first-class mail all, or the appropriate portion of, the amount submitted with
the Subscription Agreement, with interest thereon at the average rate of
interest received on all of the proceeds during the term of the escrow
arrangement. If for any reason the Bank does not receive its Charter to open for
business, or the minimum Shares are not subscribed for by the Termination Date,
including extensions, if any, all subscription funds will be promptly refunded
to subscribers with interest thereon calculated as described above.
In the event this offering is completed and the Bank receives its
Charter to open for business, all interest earned on funds held in escrow
representing accepted subscriptions will be retained by the Company. In such
case, subscribers will forego interest they otherwise could have earned on the
funds for the period during which their funds are held in escrow. Once made, a
subscription is irrevocable by the subscriber during the period of the offering,
including extensions, if any.
After all refunds have been made, the escrow agent, the Company, the
Bank and their respective Directors, Officers, and agents will have no further
liabilities to subscribers. Certificates representing Shares duly subscribed and
paid for will be issued by the Company immediately prior to the Bank opens for
business.
LIMITED MARKET FOR SHARES
Except for Shares held by the Company's Directors and certain Officers,
the Shares will be freely transferable immediately upon issuance and will not be
subject to any transfer restrictions. Although the Shares may be bought or sold
in the over-the-counter market through securities brokers and dealers, it is not
anticipated that an active trading market will develop in the foreseeable
future. There can be no assurance that an over-the-counter market will develop
for the Common Stock. It is not anticipated that the Shares will initially be
listed on any stock exchange or for trading on the NASDAQ System.
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<PAGE>
USE OF PROCEEDS
The proceeds to the Company from the sale of the Shares offered hereby
will be $6,500,000 if the minimum number of Shares are sold, and $10,000,000 if
the maximum number of Shares offered hereby are sold, in each case before
deducting expenses of the offering, which are estimated at $60,000.
The Company will initially use $6,000,000 of the net proceeds of the
offering to purchase all of the then-issued common stock of the Bank.
Additionally, the Company (or the Bank) will pay the organizational expenses of
the Company and the Bank from the proceeds of the offering, including repayment
of funds advanced to the Company by the organizing Directors. If more than
$6,500,000 of net proceeds is raised in the offering, the Company and the Bank
may seek approval from the Comptroller of the Currency to use all or a portion
of the additional proceeds for purchase of more shares of the Bank's Common
Stock (or otherwise contribute such funds to the Bank) or may retain all or a
portion of the additional proceeds in the Company for general corporate
purposes, including permitting the Company to engage in business activities
permitted for bank holding companies and to meet future accounting, legal and
regulatory expenses (See "SUPERVISION AND REGULATION"). In the event the Company
and the Bank seek approval from the Comptroller of the Currency to use net
proceeds in excess of $6,500,000 to purchase additional shares of the Bank's
common stock, the additional proceeds will be invested in Treasury securities,
bank money market accounts and short-term bank certificates of deposit pending
receipt of the required regulatory approvals.
The Bank will apply the proceeds of the sale of its capital stock to
the Company to furnish and equip the Bank's premises and the Company's offices
(at an estimated cost of $750,000), to repay any organizational expenses not
paid for by the Company (including reimbursement of any funds expended by
organizers on behalf of the Bank), to provide working capital for expansion, to
fund lending activities and for general corporate purposes (including the
investment of all or a portion of the working capital funds in interest-bearing
certificates of deposit or other deposits with the Bank or other types of
securities, such as government bonds).
The principal categories of expenditures by the Bank are expected to be
salaries, interest on deposits, loan losses, and occupancy expenses. Cash
resources will be provided primarily by proceeds of this offering, deposits,
interest income and service charges.
BUSINESS OF THE COMPANY
The Company's application to become a bank holding company is expected
to be filed with the Federal Reserve Board in the near future. The Company
expects to receive approval from the Federal Reserve Board following preliminary
approval of the charter by the OCC, although no assurances can be given as to
when, or if, such approval will be received, and if received, whether it will be
received without burdensome conditions.
The principal asset of the Company will be its investment in all of the
issued and outstanding capital stock of the Bank. Future operations of the
Company have not been decided upon at this time but will be closely evaluated
and may be predicated on additional business opportunities and/or acquisitions
to be financed by Bank dividends, borrowings, the sale of additional Common
Stock of the Company or any combination thereof.
With the prior approval of the Federal Reserve Board, a bank holding
company can, if it so wishes, engage in non-banking activities closely related
to the business of banking. With such approval the Company could engage in the
making and servicing of loans, which would be made by companies engaged in
consumer finance, credit card issuance, making of mortgages, and commercial
financing. Further, the Federal Reserve Board allows bank holding companies to
give investment or financial advice, lease personal or real property, provide
data processing and courier services, invest in Small Business Investment
Companies, among others. The Company could engage in such activities, or other
activities which the Federal Reserve Board currently or in the future may
consider closely related to banking, with the prior approval of the Federal
Reserve Board, if a favorable opportunity is presented.
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<PAGE>
PRO FORMA CAPITALIZATION OF THE COMPANY
The following table sets forth the pro forma consolidated
capitalization of the Company at _________, 1997, after giving effect to the
receipt of the estimated net proceeds of (i) the sale of all of the Shares
offered hereby, and (ii) the sale of the minimum number of Shares required to be
sold in the offering, and based upon the assumptions set forth herein.
<TABLE>
<CAPTION>
August 31, 1997
---------------------------------------------------------------
Pro Forma 1(1) Pro Forma 2(2)
---------------------------- ---------------------------
<S> <C> <C>
Stockholders' equity:
Common Stock, $.01 par value; shares authorized,
5,000,000; shares outstanding, 650,000 pro forma 1;
1,000,000 pro forma 2 $ 6,500 $ 10,000
Preferred Stock, $.01 par value; shares authorized,
1,000,000; shares outstanding, 0 pro forma 1; 0 pro
forma 2 0 0
Capital surplus 6,433,500 9,930,000
----------------------- ----------------------
Total stockholders' equity $ 6,4640,000 $ 9,940,000
======================= ======================
Book value per share of common stock(3) $ 9.91 $ 9.94
======================= ======================
</TABLE>
(1) Assumes the sale of 650,000 Shares in the offering and payment of $60,000 in
expenses of the offering.
(2) Assumes the sale of 1,000,000 Shares in the offering and payment of $60,000
of expenses of the offering.
(3) Book value per share of common stock is determined by dividing the Company's
pro forma total consolidated equities at August 31, 1997 by 650,000 and
1,000,000 shares issued and outstanding, respectively.
BUSINESS OF THE BANK
FORWARD LOOKING STATEMENTS. The following description of the Bank's
proposed business, services and clientele contains forward looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, including
statements of goals, plans, intentions, and expectations, regarding or based
upon desired business strategies, general economic conditions, interest rates,
developments in local and national markets, and other matters, which, by their
nature, are subject to significant uncertainties. Because of these uncertainties
and the assumptions upon which this Prospectus is based, actual future
developments with respect to the business of the Bank and the Company may differ
materially from those contemplated by such statements.
As of the date of this Prospectus, the Bank has not been authorized to
conduct banking business and has not engaged in banking business or other
operational activities. The issuance of a Charter by the Comptroller of the
Currency and approval of deposit insurance by FDIC will be dependent upon
compliance with certain conditions and procedures, including the sale of the
Bank's stock to the Company, the completion of the Bank's premises, the purchase
of certain fidelity and other insurance, the hiring of its staff and the
adoption of certain operating procedures and policies. Upon completion of this
offering and issuance of the Charter by the Comptroller of the Currency, and
subject to receipt of all required regulatory approvals, the Bank will open for
business in Washington, DC and will engage in the business of commercial
banking. The Bank will accept checking and savings deposits, offer a full range
of commercial, consumer/installment and real estate loans and provide customary
banking services. The Bank does not currently plan to install its own data
processing system, but will arrange for such services through an independent
service bureau.
- 11 -
<PAGE>
The Bank would be the first general purpose commercial bank organized
in the District of Columbia since 1988. In 1990, there were 27 commercial banks
based in the District of Columbia, with the four largest controlling
approximately 72% of commercial bank deposits in the District. By March 1997, as
a result of mergers, acquisitions, and the relocation of the main offices of
banks to the suburbs, the number of banks based in the District declined to 7,
and the number of community banks based in the District declined from 17 to 6.
By June 1996, the four largest banks operating in the District controlled
approximately 84.4% of commercial bank deposits in the District.
PRIMARY SERVICE AREA AND PROPOSED SERVICES
Bank Location and Market Area
The location of the Bank's proposed main office and the headquarters of
the Company and the Bank will be in the historic downtown business district of
Washington, D.C., in the vicinity of 11th and G Streets, N.W. While an available
location has been identified, no lease has been entered into as of the date
hereof.
The primary service area of the Bank is the city of Washington, D.C.,
with a secondary market area in the surrounding Washington D.C. RMA,
particularly Montgomery and Prince George's Counties in Maryland and Arlington
and Fairfax Counties in Virginia. Washington, D.C. is the nation's capital, and
as such, attracts a substantial federal workforce as well as supporting a
variety of support industries such as attorneys, lobbyists, government
contractors, real estate developers and investors, non-profit organizations,
tourism, foreign embassies and consultants.
Because the District of Columbia is not a state but a federal
instrumentality, it has had a unique relationship with the U.S. Congress. The
District of Columbia does not have the powers and autonomy of a state, and is
dependent for its powers and finances on the U.S. Congress. Several years ago,
out of concern for District finances, the Congress created the District of
Columbia Financial Responsibility and Management Assistance Authority (the
"Authority"), which oversees the District's finances and has powers to override
decisions of the District Government, consisting of the Mayor and the D.C. City
Council. In July 1997, a federal law was enacted that granted additional powers
to the Authority and created certain financial and federal income tax incentives
for persons living and doing business in the District of Columbia. The ultimate
impact of these changes on the economy of the District of Columbia and
surrounding areas is unknown.
Although the District of Columbia has experienced declines in
population in recent years, falling from approximately 638,000 in 1980 to
554,000 in 1994,and a corresponding decline in employment, from 690,000 jobs in
1990 to 613,500 in 1995, the population and employment in the surrounding
counties included in the Bank's secondary service area, have been increasing.
The Company believes that the status of the District of Columbia as the
political, economic and cultural hub of the metropolitan region offers
significant opportunity for an institution geared toward serving the needs of
small and medium size businesses and individuals. Recent developments in the
corridor in which the Bank's main office will be located, including a new sports
arena which will house the city's NBA and NHL franchises, a proposed new
convention center, the renovation of the old Woodies department store as the
home of the Washington Opera, the construction of several new office buildings
and the renovation of other office/residential properties, and the creation of a
Business Improvement District reflect a potential for increased economic
activity in the historic downtown business district.
Description of Services
The Bank will offer full commercial banking services to its business
and professional clients as well as complete consumer banking services to
individuals living and/or working in the service area. The Bank will primarily
emphasize providing commercial banking services to sole proprietorships, small
and medium-sized businesses, partnerships, corporations, non-profit
organizations and associations, and investors living and working in and near the
Bank's primary service area. A full range of retail banking services will be
offered to accommodate the individual needs of both corporate customers as well
as the community the Bank will serve.
- 12 -
<PAGE>
The Bank will seek to develop a loan portfolio consisting primarily of
business loans with variable rates and/or short maturities where the cash flow
of the borrower is the principal source of debt service with a secondary
emphasis on collateral. Real estate loans will generally be for commercial
purposes and will be structured using variable rates and/or short (three to five
year) maturities. Consumer loans will be made on the traditional installment
basis for a variety of purposes.
An effort will be made to screen all new business customers to
determine, in advance, their credit qualifications and history. Employing this
practice will permit the bank to respond quickly to credit requests as they
arise.
In general, the Bank anticipates offering the following credit
services:
1) Commercial loans for business purposes including working
capital, equipment purchases, real estate, lines of credit,
and government contract financing. Asset based lending,
accounts receivable and inventory will be available on a
selective basis.
2) Real estate loans for business and investment purposes.
Construction loan financing will be a future service.
Residential first mortgages for extended terms will be the
exception.
3) Traditional general purpose consumer installment loans
including automobile and personal loans. In addition, the Bank
will offer personal lines of credit, equity lines of credit
and student loans.
4) Credit card services, to be offered through an outside credit
grantor.
Deposit services will include business and personal checking accounts,
NOW accounts, and a tiered savings/Money Market Account basing the payment of
interest on balances on deposit. Certificates of Deposits will be offered using
a tiered rate structure and various maturities. The acceptance of brokered
deposits is not a part of the current strategy. A complete IRA program will be
available along with SEP and KEOGH for small businesses.
Other services for business accounts will include cash management
services such as sweep accounts, lock box, and account reconciliation, credit
card depository, safety deposit boxes and Automated Clearing House origination.
In addition, a daily messenger service and a microcomputer link to the Bank will
be developed subject to sufficient demand. An after hours depository and ATM
service will be available.
SOURCE OF BUSINESS
Management believes that the market segments targeted, small to medium
sized businesses and the consumer base of the District of Columbia, are
demanding the convenience and personal service that a smaller independent
financial institution can offer. It will be those themes of convenience and
personal service that will form the basis for the Bank's business development
strategies. The Bank first plans to provide convenience at the work place with a
strategically located main office in Washington, DC, followed by branches in
markets in which it believes it will be successful.
To introduce customers to the Bank, early reliance will be on
Directors' referrals, officer-originated calling programs and shareholder
referrals. Promotional efforts will primarily be through direct mail to targeted
customers.
Management intends to build a staff of competent, professional
associates to provide the Bank's customers with bankers sensitive to customer
needs and experienced in providing a level of personal and professional service
expected by the business community.
- 13 -
<PAGE>
ASSET MANAGEMENT
Consistent with the objective of the Bank to serve the needs of the
business community, assets will be concentrated in commercial loans. To be
consistent with the requirements of prudent banking practices, adequate assets
will be invested in high grade securities to provide liquidity and safety. Loans
will be limited to less than 85% of total managed liabilities and structured
generally with variable rates and short maturities. Investment securities will
primarily be United States treasury securities and United States government or
"quasi-government" agencies, and tax exempt municipal securities with a minimum
rating of A from an established rating agency.
The risk of nonpayment (or deferred payment) of loans is inherent in
commercial banking. The Bank's marketing focus on small to medium-sized
businesses may result in the assumption by the Bank of certain lending risks
that are different from those attendant to loans to larger companies. Management
of the Bank will carefully evaluate all loan applications and will attempt to
minimize its credit risk exposure by use of thorough loan application, approval
and monitoring procedures; however, there can be no assurance that such
procedures can significantly reduce such lending risks.
COMPETITION
Deregulation of financial institutions and holding company acquisitions
of banks across state lines has resulted in widespread fundamental changes in
the financial services industry. This transformation, although occurring
nationwide, is particularly intense in the Washington, D.C. metropolitan area
because of the dynamic changes in the area's economic base in recent years and
changing state laws authorizing interstate mergers and acquisitions of banks,
and the interstate establishment or acquisition of branches.
In the District of Columbia, competition is exceptionally keen from
large banking institutions headquartered outside of the District of Columbia. In
addition, the Bank will compete with community banks, savings and loan
associations, credit unions, mortgage companies, and others providing financial
services. Among the advantages that many of these institutions have over the
Bank are their abilities to finance extensive advertising campaigns, maintain
extensive branch networks and technology investments, and to directly offer
certain services, such as international banking and trust services, which will
not be offered directly by the Bank. Further, the greater capitalization of the
larger institutions allows for substantially higher lending limits than the
Bank.
EMPLOYEES
Management anticipates that the Bank will employ approximately 15
persons, three of which will be senior officers of the Bank. Except for the
Chairman of the Board of Directors, who will serve as the Chief Executive
Officer of the Company, and executive officers of the Bank, who will serve as
noncompensated executive officers of the Company, it is not anticipated that the
Company (as distinguished from the Bank) will have any employees during the
first year of operations.
PREMISES
The Bank has not yet selected a location for its main office , but
intends to lease space in the general vicinity of 11th and G Streets, NW,
Washington, DC.
SUPERVISION AND REGULATION
THE COMPANY
The Company will be a bank holding company registered under the Bank
Holding Company Act of 1956, as amended, (the "Act") and will be subject to
supervision by the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"). As a bank holding company, the Company will be
required to file with the Federal Reserve
- 14 -
<PAGE>
Board an annual report and such other additional information as the Federal
Reserve Board may require pursuant to the Act. The Federal Reserve Board may
also make examinations of the Company and each of its subsidiaries.
The Act requires approval of the Federal Reserve Board for, among other
things, the acquisition by a proposed bank holding company of control of more
than five percent (5%) of the voting shares, or substantially all the assets, of
any bank or the merger or consolidation by a bank holding company with another
bank holding company. The Act also generally permits the acquisition by a bank
holding company of control or substantially all the assets of any bank located
in a state other than the home state of the bank holding company, except where
the bank has not been in existence for the minimum period of time required by
state law, but if the bank is at least 5 years old, the Federal Reserve Board
may approve the acquisition.
With certain limited exceptions, a bank holding company is prohibited
from acquiring control of any voting shares of any company which is not a bank
or bank holding company and from engaging directly or indirectly in any activity
other than banking or managing or controlling banks or furnishing services to or
performing service for its authorized subsidiaries. A bank holding company may,
however, engage or acquire an interest in a company that engages in activities
which the Federal Reserve Board has determined by order or regulation to be so
closely related to banking or managing or controlling banks as to be properly
incident thereto. In making such a determination, the Federal Reserve Board is
required to consider whether the performance of such activities can reasonably
be expected to produce benefits to the public, such as convenience, increased
competition or gains in efficiency, which outweigh possible adverse effects,
such as undue concentration of resources, decreased or unfair competition,
conflicts of interest or unsound banking practices. The Federal Reserve Board is
also empowered to differentiate between activities commenced de novo and
activities commenced by the acquisition, in whole or in part, of a going
concern. Some of the activities that the Federal Reserve Board has determined by
regulation to be closely related to banking include making or servicing loans,
performing certain data processing services, acting as a fiduciary or investment
or financial advisor, and making investments in corporations or projects
designed primarily to promote community welfare.
Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on any extensions of credit to
the bank holding company or any of its subsidiaries, or investments in the stock
or other securities thereof, and on the taking of such stock or securities as
collateral for loans to any borrower. Further, a holding company and any
subsidiary bank are prohibited from engaging in certain tie-in arrangements in
connection with the extension of credit. A subsidiary bank may not extend
credit, lease or sell property, or furnish any services, or fix or vary the
consideration for any of the foregoing on the condition that: (i) the customer
obtain or provide some additional credit, property or services from or to such
bank other than a loan, discount, deposit or trust service; (ii) the customer
obtain or provide some additional credit, property or service from or to the
Company or any other subsidiary of the Company; or (iii) the customer not obtain
some other credit, property or service from competitors, except for reasonable
requirements to assure the soundness of credit extended.
THE BANK
The Bank, as a national banking association whose accounts will be
insured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation
("FDIC") up to the maximum legal limits of the FDIC, will be subject to
regulation, supervision and regular examination by the Comptroller of the
Currency. The Bank will be a member of the Federal Reserve System, and, as such,
will be subject to certain provisions of the Federal Reserve Act and regulations
issued by the Federal Reserve Board. The Bank will also be subject to applicable
banking provisions of District of Columbia law, insofar as they do not conflict
with or are not preempted by federal law. The regulations of these various
agencies govern most aspects of the Bank's business, including setting required
reserves against deposits, loans, investments, mergers and acquisitions,
borrowing, dividends and location and number of branch offices. The laws and
regulations governing the Bank generally have been promulgated to protect
depositors and the deposit insurance funds, and not for the purpose of
protecting stockholders.
Competition among commercial banks, savings and loan associations, and
credit unions has increased following enactment of legislation which greatly
expanded the ability of banks and bank holding companies to engage in interstate
- 15 -
<PAGE>
banking or acquisition activities. As a result of federal and state legislation,
banks in the Washington D.C./Maryland/Virginia area can, subject to limited
restrictions, acquire or merge with a bank in another of the jurisdictions, and
can branch de novo in any of the jurisdictions. Additionally, legislation has
been proposed which may result in nonbanking companies being authorized to own
banks, which could result in companies with resources substantially in excess of
the Company's entering into competition with the Company and the Bank.
Banking is a business which depends on interest rate differentials. In
general, the differences between the interest paid by a bank on its deposits and
its other borrowings and the interest received by a bank on loans extended to
its customers and securities held in its investment portfolio constitute the
major portion of the bank's earnings. Thus, the earnings and growth of the Bank
will be subject to the influence of economic conditions generally, both domestic
and foreign, and also to the monetary and fiscal policies of the United States
and its agencies, particularly the Federal Reserve Board, which regulates the
supply of money through various means including open market dealings in United
States government securities. The nature and timing of changes in such policies
and their impact on the Bank cannot be predicted.
Branching and Interstate Banking. Beginning on June 1, 1997, the
federal banking agencies are authorized to approve interstate bank merger
transactions without regard to whether such transaction is prohibited by the law
of any state, unless the home state of one of the banks has opted out of the
interstate bank merger provisions of the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the"Riegle-Neal Act") by adopting a law after
the date of enactment of the Riegle-Neal Act and prior to June 1, 1997 which
applies equally to all out-of-state banks and expressly prohibits merger
transactions involving out-of-state banks. Interstate acquisitions of branches
will be permitted only if the law of the state in which the branch is located
permits such acquisitions. Such interstate bank mergers and branch acquisitions
will also be subject to the nationwide and statewide insured deposit
concentration described above.
The Riegle-Neal Act authorizes the OCC and FDIC to approve interstate
branching de novo by national and state banks, only in states which specifically
allow for such branching. The District of Columbia, Maryland and Virginia have
all enacted laws which permit interstate acquisitions of banks and bank branches
and permit out-of-state banks to establish de novo branches.
Capital Adequacy Guidelines. The Federal Reserve, the Comptroller of
the Currency (the "OCC) and the FDIC have all adopted risk based capital
adequacy guidelines pursuant to which they assess the adequacy of capital in
examining and supervising banks and bank holding companies and in analyzing bank
regulatory applications. Risk-based capital requirements, determine the adequacy
of capital based on the risk inherent in various classes of assets and
off-balance sheet items.
Since December 31, 1992, national banks have been expected to meet a
minimum ratio of total qualifying capital (the sum of core capital (Tier 1) and
supplementary capital (Tier 2)) to risk weighted assets of 8%. At least half of
this amount (4%) should be in the form of core capital. These requirements apply
to the Bank and will apply to the Company (a bank holding company) once its
total assets equal $150,000,000 or more, it engages in certain highly leveraged
activities or it has publicly held debt securities.
Tier 1 Capital for national banks generally consists of the sum of
common stockholders' equity and perpetual preferred stock (subject in the case
of the latter to limitations on the kind and amount of such stock which may be
included as Tier 1 Capital), less goodwill, without adjustment in accordance
with FAS 115. Tier 2 Capital consists of the following: hybrid capital
instruments; perpetual preferred stock which is not otherwise eligible to be
included as Tier 1 Capital; term subordinated debt and intermediate-term
preferred stock; and, subject to limitations, general allowances for loan
losses. Assets are adjusted under the risk-based guidelines to take into account
different risk characteristics, with the categories ranging from 0% (requiring
no risk-based capital) for assets such as cash, to
100% for the bulk of assets which are typically held by a bank holding company,
including certain multi-family residential and commercial real estate loans,
commercial business loans and consumer loans. Residential first mortgage loans
on one to four family residential real estate and certain seasoned multi-family
residential real estate loans, which are not 90 days or more past-
- 16 -
<PAGE>
due or non-performing and which have been made in accordance with prudent
underwriting standards are assigned a 50% level in the risk-weighing system, as
are certain privately-issued mortgage-backed securities representing indirect
ownership of such loans. Off-balance sheet items also are adjusted to take into
account certain risk characteristics.
In addition to the risk based capital requirements, the OCC has
established a minimum 3.0% Leverage Capital Ratio (Tier 1 Capital to total
adjusted assets) requirement for the most highly-rated national banks, with an
additional cushion of at least 100 to 200 basis points for all other national
banks, which effectively increases the minimum Leverage Capital Ratio for such
other banks to 4.0% - 5.0% or more. Under the OCC's regulations, highest-rated
banks are those that the OCC determines are not anticipating or experiencing
significant growth and have well diversified risk, including no undue interest
rate risk exposure, excellent asset quality, high liquidity, good earnings and,
in general, those which are considered a strong banking organization. A national
bank having less than the minimum Leverage Capital Ratio requirement shall,
within 60 days of the date as of which it fails to comply with such requirement,
submit to the applicable district office for review and approval a reasonable
plan describing the means and timing by which the bank shall achieve its minimum
Leverage Capital Ratio requirement. A national bank which fails to file such
plan with the is deemed to be operating in an unsafe and unsound manner, and
could subject the bank to a cease-and-desist order from the . The OCC's
regulations also provide that any insured depository institution with a Leverage
Capital Ratio that is less than 2.0% is deemed to be operating in an unsafe or
unsound condition pursuant to Section 8(a) of the FDIA and is subject to
potential termination of deposit insurance. However, such an institution will
not be subject to an enforcement proceeding thereunder, solely on account of its
capital ratios, if it has entered into and is in compliance with a written
agreement with the to increase its Leverage Capital Ratio to such level as the
deems appropriate and to take such other action as may be necessary for the
institution to be operated in a safe and sound manner. The capital regulations
also provide, among other things, for the issuance by the OCC or its designee(s)
of a capital directive, which is a final order issued to a bank that fails to
maintain minimum capital or to restore its capital to the minimum capital
requirement within a specified time period. Such directive is enforceable in the
same manner as a final cease-and-desist order.
Prompt Corrective Action. Under Section 38 of the FDIA, as added by the
FDICIA, each federal banking agency is required to implement a system of prompt
corrective action for institutions which it regulates. The federal banking
agencies have promulgated substantially similar regulations to implement the
system of prompt corrective action established by Section 38 of the FDIA, which
became effective on December 19, 1992. Under the regulations, a bank shall be
deemed to be: (i) "well capitalized" if it has a Total Risk Based Capital Ratio
of 10.0% or more, a Tier 1 Risk Based Capital Ratio of 6.0% or more, a Leverage
Capital Ratio of 5.0% or more and is not subject to any written capital order or
directive; (ii) "adequately capitalized" if it has a Total Risk Based Capital
Ratio of 8.0% or more, a Tier 1 Risk Based Capital Ratio of 4.0% or more and a
Tier 1 Leverage Capital Ratio of 4.0% or more (3.0% under certain circumstances)
and does not meet the definition of "well capitalized;" (iii) "undercapitalized"
if it has a Total Risk Based Capital Ratio that is less than 8.0%, a Tier 1 Risk
based Capital Ratio that is less than 4.0% or a Leverage Capital Ratio that is
less than 4.0% (3.0% under certain circumstances); (iv) "significantly
undercapitalized" if it has a Total Risk Based Capital Ratio that is less than
6.0%, a Tier 1 Risk Based Capital Ratio that is less than 3.0% or a Leverage
Capital Ratio that is less than 3.0%; and (v) "critically undercapitalized" if
it has a ratio of tangible equity to total assets that is equal to or less than
2.0%.
An institution generally must file a written capital restoration plan
which meets specified requirements with an appropriate federal banking agency
within 45 days of the date the institution receives notice or is deemed to have
notice that it is undercapitalized, significantly undercapitalized or critically
undercapitalized. A federal banking agency must provide the institution with
written notice of approval or disapproval within 60 days after receiving a
capital restoration plan, subject to extensions by the applicable agency.
An institution which is required to submit a capital restoration plan
must concurrently submit a performance guaranty by each company that controls
the institution. Such guaranty shall be limited to the lesser of (i) an amount
equal to 5.0% of the institution's total assets at the time the institution was
notified or deemed to have notice that it was undercapitalized or (ii) the
amount necessary at such time to restore the relevant capital measures of the
institution to the levels required for the institution to be classified as
adequately capitalized. Such a guaranty shall expire after the
- 17 -
<PAGE>
federal banking agency notifies the institution that it has remained adequately
capitalized for each of four consecutive calendar quarters. An institution which
fails to submit a written capital restoration plan within the requisite period,
including any required performance guaranty, or fails in any material respect to
implement a capital restoration plan, shall be subject to the restrictions in
Section 38 of the FDIA which are applicable to significantly undercapitalized
institutions.
A "critically undercapitalized institution" is to be placed in
conservatorship or receivership within 90 days unless the FDIC formally
determines that forbearance from such action would better protect the deposit
insurance fund. Unless the FDIC or other appropriate federal banking regulatory
agency makes specific further findings and certifies that the institution is
viable and is not expected to fail, an institution that remains critically
undercapitalized on average during the fourth calendar quarter after the date it
becomes critically undercapitalized must be placed in receivership. The general
rule and current position of the is that the FDIC will be appointed as receiver
within 90 days after a bank becomes critically undercapitalized unless extremely
good cause is shown and an extension is agreed to between the and the FDIC. In
general, good cause is defined as capital which has been raised and is
imminently available for infusion into the Bank except for certain technical
requirements which may delay the infusion for a period of time beyond the 90 day
time period.
Immediately upon becoming undercapitalized, an institution shall become
subject to the provisions of Section 38 of the FDIA, which (i) restrict payment
of capital distributions and management fees; (ii) require that the appropriate
federal banking agency monitor the condition of the institution and its efforts
to restore its capital; (iii) require submission of a capital restoration plan;
(iv) restrict the growth of the institution's assets; and (v) require prior
approval of certain expansion proposals. The appropriate federal banking agency
for an undercapitalized institution also may take any number of discretionary
supervisory actions if the agency determines that any of these actions is
necessary to resolve the problems of the institution at the least possible
long-term cost to the deposit insurance fund, subject in certain cases to
specified procedures. These discretionary supervisory actions include: requiring
the institution to raise additional capital; restricting transactions with
affiliates; requiring divestiture of the institution or the sale of the
institution to a willing purchaser; and any other supervisory action that the
agency deems appropriate. These and additional mandatory and permissive
supervisory actions may be taken with respect to significantly undercapitalized
and critically undercapitalized institutions.
Additionally, under Section 11(c)(5) of the FDIA, as amended by FDICIA,
a conservator or receiver may be appointed for an institution where: (i) an
institution's obligations exceed its assets; (ii) there is substantial
dissipation of the institution's assets or earnings as a result of any violation
of law or any unsafe or unsound practice; (iii) the institution is in an unsafe
or unsound condition; (iv) there is a willful violation of a cease-and-desist
order; (v) the institution is unable to pay its obligations in the ordinary
course of business; (vi) losses or threatened losses deplete all or
substantially all of an institution's capital, and there is no reasonable
prospect of becoming "adequately capitalized" without assistance; (vii) there is
any violation of law or unsafe or unsound practice or condition that is likely
to cause insolvency or substantial dissipation of assets or earnings, weaken the
institution's condition, or otherwise seriously prejudice the interests of
depositors or the insurance fund; (viii) an institution ceases to be insured;
(ix) the institution is undercapitalized and has no reasonable prospect that it
will become adequately capitalized, fails to become adequately capitalized when
required to do so, or fails to submit or materially implement a capital
restoration plan; or (x) the institution is critically undercapitalized or
otherwise has substantially insufficient capital.
Regulatory Enforcement Authority. The Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 ("FIRREA") included substantial
enhancement to the enforcement powers available to federal banking regulators.
This enforcement authority includes, among other things, the ability to assess
civil money penalties, to issue cease-and-desist or removal orders and to
initiate injunctive actions against banking organizations and
institution-affiliated parties, as defined in FIRREA. In general, these
enforcement actions may be initiated for violations of laws and regulations and
unsafe or unsound practices. Other actions or inactions may provide the basis
for enforcement action, including misleading or untimely reports filed with
regulatory authorities. FIRREA significantly increased the amount of and grounds
for civil money penalties and requires, except under certain circumstances,
public disclosure of final enforcement actions by the federal banking agencies.
- 18 -
<PAGE>
MANAGEMENT
The following table sets forth certain information concerning the
Directors and Executive Officers of the Company and those proposed for the Bank,
including the number and percentage of Shares expected to be acquired in this
offering by each individual and the group as a whole:
<TABLE>
<CAPTION>
Proposed Position with % of Anticipated Stock
Name Age Position with Company Bank # of Shares Purchases
Maximum Sale Minimum
Sale
<S> <C> <C> <C> <C> <C> <C>
Philip W. Allin 39 Director Director 5,000 0.5% 0.77%
James G. Calomiris 32 Director Director 5,000 0.5% 0.77%
Tung Yat Chan 27 Director Director 2,500 0.25% 0.38%
Linwood C. Cotman, Jr. 50 President and Director President, Chief Executive 10,000 1.0% 1.54%
Officer and Director
Harry A. Dematatis 31 Director Director 2,000 0.2% 0.31%
John N. Deoudes 74 Director Director 5,000 0.5% 0.77%
C. Steven Georgilakis 59 Director Director 5,000 0.5% 0.77%
Thomas O. Griel 51 Senior Vice President and Senior Vice President, 5,000 0.5% 0.77%
Director Chief Lender and Director
John C. James 32 Director Director 1,000 0.1% 0.15%
Matthew R. Johnson 33 Director Director 2,500 0.25% 0.38%
Nabil Y. Khawand 46 Director Director 10,000 1.0% 1.54%
Howard Lee 50 Chairman, Chief Executive Director 5,000 0.5% 0.77%
Officer and Director
William S. Paleos 34 Director Director 500 0.05% 0.08%
David G. Russell 55 Senior Vice President and Senior Vice President - 10,000 1.0% 1.54%
Director Operations and Director
Leonidas A. Vondas 49 Director Director 5,000 0.5% 0.77%
--------------------------------------
Total 73,500.00 7.35% 11.31%
======================================
</TABLE>
The Company's Bylaws provide that the number of Directors of the
Company shall be fixed from time to time by the Board of Directors but shall not
be less than 3 nor more than 25. The Board has fixed the current number of
Directors at 15. The Bylaws may be amended by action of the Board of Directors.
All of the Company's current Directors were duly elected or appointed to the
Board and will continue to serve as Directors until the first annual meeting of
stockholders and until their successors are elected and qualified.
The Bank's Bylaws will provide for a range of 5 to 25 Directors and
will permit its Board of Directors or stockholders to fix an exact number of
Directors within that range. The Board of Directors plans to fix the number of
Directors at 15. Before the Bank opens for business, its sole stockholder, the
Company, will be required to elect Directors of the Bank, subject to the
approval of the Comptroller of the Currency. Directors of the Bank will serve
for one year and until their successors are elected and qualified. The Company
intends, with the approval of the Comptroller of the Currency, to elect the 15
current Directors of the Company to serve on the Board of the Bank. The
Comptroller of the Currency has the authority to disallow any individual from
serving as a Director of the Bank.
- 19 -
<PAGE>
Each of the Bank's Directors is required by law to own a minimum of 100
shares of Common Stock of the Company.
The Articles of Incorporation of the Company provide that to the full
extent that the Virginia Stock Corporation Act (the "VSCA") permits the
limitation or elimination of the liability of directors or officers, a director
or officer of the Company shall not be liable to the Company or its shareholders
for monetary damages. The VSCA provides that the liability of a director or
officer in a proceeding brought by or in the right of shareholders, or on behalf
of shareholders may be eliminated, except that the liability of an director or
officer may not be eliminated if the officer or director engaged in wilful
misconduct or knowing violation of the criminal law or if any state or federal
securities law, including, without limitation, any claim of unlawful insider
trading or manipulation of the market for any security. The Articles of
Association of the Bank will similarly provide that to the full extent that the
VSCA permits the limitation or elimination of the liability of directors or
officers, subject to federal law limitations on that authority, a director or
officer shall not be liable to the Company or its shareholders for monetary
damages.
The Articles of the Incorporation of the Company provide that to the
full extent permitted by the VSCA and other applicable law, the Company shall
indemnify a director or officer of the Company who is or was a party to any
proceeding by reason of the fact that he is or was such a director or officer
and the Board of Directors of the Company may contract in advance to indemnify
any director or officer. The VSCA provides that except as limited by its
articles of incorporation, a corporation shall indemnify a director who entirely
prevails in the defense of any proceeding to which he was a party because he is
or was a director of the corporation against reasonable expenses incurred in
connection with the proceeding. The VSCA further provides that a corporation may
indemnify an individual made a part to a proceeding because he is or was a
director against liability incurred in the proceeding if he conducted himself in
good faith, and he believed: (a) in the case of conduct in his official capacity
with the corporation, that his conduct was in its best interests; (b) in all
other cases, that his conduct was at least not opposed to its best interests;
and in the case of any criminal proceeding, he had no reasonable cause to
believe his conduct was unlawful, provided however, that a corporation may not
indemnify a director in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or in
connection with any other proceeding charging improper personal benefit to him,
whether or not involving action in his official capacity, in which he was
adjudged liable on the basis that personal benefit was improperly received by
him. The Board of Directors may also indemnify employees or agents of the
Company who was or is a party to any proceedings by reason of the fact that he
is or was an employee or agent of the Company.
The Articles of Association and the Bylaws of the Bank similarly will
provide that, subject to limitations under federal statute or regulation, to the
full extent permitted by the VSCA, the Company shall indemnify a director or
officer of the Company who is or was a party to any proceeding by reason of the
fact that he is or was such a director or officer and the Board of Directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Directors, Officers and persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as expressed in the Securities Act of 1933 and is
therefore unenforceable.
- 20 -
<PAGE>
ADDITIONAL INFORMATION ABOUT THE DIRECTORS, OFFICERS AND ORGANIZERS OF THE
COMPANY AND BANK
Set forth below is a description of the principal occupation and
business experience of each of the Directors, Officers, and organizers of the
Company and the Bank. Except as expressly indicated below, each person has been
engaged in his principal occupation for at least five years.
Philip W. Allin. Mr. Allin serves as a senior account manager at The
Supply Cabinet, Inc., an office furniture and supply, and facility planning and
design firm located in Manassas, Virginia.
James G. Calomiris. Mr. Calomiris is a partner in the law firm of
Calomiris and Calomiris, P.A., Bethesda, Maryland.
Tung Yat (Tony) Chan. Mr. Chan has served as Vice President of Cheung
Ming Properties, Inc., a real estate holding and management company active in
the Washington D.C. metropolitan area, since 1994. Since March 1997, he has also
served as a real estate broker with Solomon Real Estate, Inc, a commercial real
estate brokerage.
Linwood C. Cotman, Jr. Mr. Cotman is currently employed with MPA, Inc.
a technical recruiting firm in Alexandria, Virginia. Prior to that service Mr.
Cotman served as President and Chief Executive Officer of Citizens Bank of
Washington (formerly McLachlen National Bank) and Citizens Bank of Virginia,
from 1986 until March 1996 when it was acquired by Crestar. Mr. Cotman has had
in excess of twenty five years of banking experience, in all aspects of the
banking business.
Harry A. Dematatis. Mr. Dematatis has been employed with Alexander
Realty Corporation, a Washington D.C. commercial real estate sales, leasing and
management firm since 1988.
John N. Deoudes. Mr. Deoudes serves as President of D.C. Vending
Company, Inc., a distributor of coin operated vending and entertainment
machines.
C. Steve Georgilakis. Mr. Georgilakis is the owner and operator of CSG
Enterprises, a real estate management and investment firm in the District of
Columbia.
Thomas O. Griel. Mr. Griel served as Senior Vice President of the Adams
National Bank, Washington, D.C. from 1990 to July 1997. Mr. Griel previously
served as President and Chief Executive Officer of McLachlen National Bank from
1980 to 1986. He was self employed as a certified public accountant from 1988 to
1990, and has additionally served as a national bank examiner with the Office of
the Comptroller of the Currency. Mr. Griel has a total of 19 years of banking
experience.
John C. James. Mr. James has served as Controller of C&R Realty, a real
estate management and development firm in the District of Columbia.
Matthew R. Johnson. Mr. Johnson is a Managing Director of Caledonian
Associates, Inc., a bank consulting firm providing services to financial
institutions in eastern Europe and the former Soviet Union.
Nabil Y. Khawand. Dr. Khawand is engaged in the private practice of
medicine, specializing in urology and kidney transplant surgery. From 1994 to
1996, Dr. Khawand was Director of Urology at the National Rehabilitation
Hospital, and from 1988 to 1994 he was Assistant Chief of Urology at Washington
Hospital Center.
Howard Lee. Mr. Lee is currently President of Odyssey Partners,
Limited, a public policy management and consulting firm. From 1991 to 1997, he
served as Director of Public Policy and of RTC Operations for the Thrift
Depositor Protection Oversight Board. He previously served as Deputy Staff
Director of the House Committee on the District of Columbia and as Staff
Director for the House Subcommittee on Domestic Monetary Policy.
- 21 -
<PAGE>
William Steven Paleos. Mr. Paleos is an attorney with the Alexandria,
Virginia law firm of Paleos & Krieger, P.C.
David G. Russell. Mr. Russell has had an aggregate of 32 years of
banking experience, including as Senior Vice President and Cashier of Citizens
Bank of Washington from May 1983 to 1993. Since then, Mr. Russell has been
involved in the retail industry, including as President of Total Golf since
1995.
Leonidas A. Vondas. Mr. Vondas is self employed in the retail liquor
business and as a real estate developer. He previously was employed as a vice
principal in the Prince George's County school system. From 1982 until July
1997, Mr. Vondas served as a director of Suburban Bank of Maryland.
EXECUTIVE COMPENSATION AND
CERTAIN TRANSACTIONS WITH MANAGEMENT
It is not anticipated that any of the executive officers of the Bank
will receive in excess of $100,000 in remuneration from the Bank, during the
first year of the Bank's operation. It is not anticipated that the Company will
separately compensate any officers or employees of the Bank for services
rendered to the Company. Except for a fee of $18.00 per hour paid by the Company
to Mr. David Russell during the organizational period for his services, neither
the Company nor the Bank has paid any compensation to date.
The Bank anticipates that it will provide its Chairman with an annual
retainer of $20,000. The Company anticipates that, commencing in its second year
of operations, it will provide its Chairman/Chief Executive Officer with an
annual retainer of $25,000. The Company and the Bank also anticipates the
payment of fees to all other Directors at levels appropriate to their size and
growth.
INCENTIVE STOCK PLAN
To attract and retain highly qualified personnel, it is the intention
of the Directors of the Company to adopt a Stock Option Plan (the "Plan"), which
would be subject to approval by the holders of a majority of the outstanding
Common Stock of the Company after this offering. It is intended that the Plan
provide for incentive options which would be available for grant to officers and
key employees of the Company and the Bank. The exercise price under each
incentive stock option would not be less than 100% of the fair market value of
the shares on the date the option is granted. No taxable income is recognized by
the optionee at the time an incentive stock option is granted or at the time
exercised, and correspondingly, the Company will not be entitled for Federal
income tax purposes to a compensation expense deduction. The aggregate fair
market value of the Common Stock for which any one officer or employee may be
granted incentive stock options in any calendar year could not exceed $100,000
as provided in Section 422A of the Code, including the requirements which
restrict the term of such an option to ten years. Within three (3) months
following termination of employment for any reasons other than death, disability
or retirement, or cause, an optionee could exercise his or her option to the
extent such option was exercisable on the date of termination. The Plan would
extend for a period of ten years and be administered by a committee appointed by
the Board.
Since the Plan has not yet been adopted, it is impossible at this time
to designate the identity of the options or the number of options to be granted.
- 22 -
<PAGE>
CERTAIN TRANSACTIONS
Each organizer of the Company has advanced $10,000 to the Company for
the purpose of paying a portion of the Bank's application and organization
expenses. Such expenses include organization, application and registration
expenses, pre-opening operating expenses and bank office construction,
improvement and equipment. It is expected that these expenses will be repaid by
the Bank from the proceeds of the offering (See "USE OF PROCEEDS"). The Company
expects to incur aggregate pre-opening expenses of approximately $750,000
(including premises and equipment expenses) assuming the Bank commences
operations in February 1998, and intends to defray a portion of such expenses
with interest earned from the interim investment of the gross proceeds of this
offering.
Certain of the Directors and Officers of the Company may borrow a
portion of the Subscription Price of the Shares to be purchased by them in this
offering. Such borrowing may be obtained from one or more of the Bank's
correspondent banks or other lenders in accordance with applicable laws and will
not be conditioned or predicated in any way upon the use of interbank deposits
as compensating balances therefor. Their Shares may be required as security for
such loans.
It is anticipated that the Directors and Officers of the Company and
the business and professional organizations with which they are associated will
have banking transactions with the Bank in the ordinary course of business. It
is the policy of management of the Bank that any loans and loan commitments will
be made in accordance with applicable laws and on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons of comparable credit standing. Loans
to Directors and Officers must comply with the Bank's lending policies and
statutory lending limits, and directors with a personal interest in any loan
application will be excluded from considering such loan application.
SHARES ELIGIBLE FOR FUTURE SALE
All Shares sold in this offering will be freely tradeable without
restriction or registration under the Securities Act of 1933, except for any
Shares purchased by an "affiliate" of the Company, which will be subject to the
resale limitations set forth in Securities and Exchange Commission Rule 144.
All of the Company's Directors are considered "affiliates" within the
meaning of Rule 144 and will, therefore, be subject to the applicable resale
limitations with respect to the Shares purchased in this offering. In general,
the number of shares that can be sold by each Director in broker's transactions,
(as that term is used in Rule 144) within any three month period may not exceed
the greater of (i) one percent (1%) of the outstanding shares as shown by the
most recent report or statement published by the Company (6,500 shares if the
minimum number of Shares are sold or 10,000 shares if the maximum number of
Shares are sold), or (ii) the average weekly reported volume of trading in the
Shares on all national securities exchanges and/or reported through the
automated quotation system of a registered securities association during the
four calendar weeks preceding the sale.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital consists of 5,000,000 shares of Common
Stock, $.01 par value, and 1,000,000 of undesignated preferred stock, $.01 par
value, the terms of which may be determined by the Board of Directors at the
time of issuance.
Holders of Common Stock are entitled to cast one vote for each share
held of record, to receive such dividends as may be declared by the Board of
Directors of the Company out of legally available funds, and to share ratably in
any distribution of the Company's assets after payment of all debts and other
liabilities, upon liquidation, dissolution or winding up. Shareholders do not
have cumulative voting rights or preemptive rights or other rights to subscribe
for additional Shares, and the Common Stock is not subject to conversion or
redemption. The shares of Common Stock to be issued by the Company in connection
with this offering will be, when issued, fully paid and nonassessable. No shares
of Common Stock are presently outstanding.
- 23 -
<PAGE>
The Board of Directors, by action of a majority of the full Board of
Directors, is authorized to issue the shares of preferred stock from time to
time on such terms as it may determine, and to divide the preferred stock into
one or more classes or series, and to fix by resolution or resolutions the
designations, voting powers, preferences, participation, redemption, sinking
fund, conversion, dividend, and other optional or special rights of such classes
or series, and the qualifications, limitations or restrictions thereof. The
existence of shares of authorized undesignated preferred stock will enable the
Company to meet possible contingencies or opportunities in which the issuance of
shares of preferred stock may be advisable, such as in the case of acquisition
or financing transactions. Shares of preferred stock could be issued to
shareholders of another institution enabling the Company to acquire such other
institution without the expenditure of any cash. Shares of preferred stock could
also be sold in a public or private offering to enable the Company to engage in
acquisition activity, to expand the Company's ability to engage in lending
activities or for other corporate purposes. Having shares of preferred stock
available for issuance would give the Company flexibility in that it would be
able to avoid the expense and delay of calling a meeting of shareholders at the
time the contingency or opportunity arises. Any issuance of preferred stock
could have a dilutive effect on the existing holders of Common Stock.
The existence of authorized shares of preferred stock could have the
effect of rendering more difficult or discouraging hostile takeover attempts or
of facilitating a negotiated acquisition of the Company. Alternatively, such
shares, which may be convertible into shares of Common Stock, could be issued to
the Company's shareholders or to a third party in an attempt to frustrate or
render more expensive a hostile acquisition of the Company.
Limitations on Payment of Dividends. The payment of dividends by the
Company will depend largely upon the ability of the Bank to declare and pay
dividends to the Company, as the principal source of the Company's revenue will
initially be from dividends paid by the Bank. Dividends will depend primarily
upon the Bank's earnings, financial condition, and need for funds, as well as
governmental policies and regulations applicable to the Company and the Bank. It
is anticipated that the Bank will incur losses during its initial phase of
operations, and therefore, it is not anticipated that any dividends will be paid
by the Bank or the Company for at least three years and in the foreseeable
future. Even if the Bank and the Company have earnings in an amount sufficient
to pay dividends, the Board of Directors may determine, and it is the present
intention of the Board of Directors, to retain earnings for the purpose of
funding the growth of the Company and the Bank.
Regulations of the Comptroller of the Currency place a limit on the
amount of dividends the Bank may pay to the Company without prior approval.
Prior approval of the Comptroller of the Currency is required to pay dividends
which exceed the Bank's net profits for the current year plus its retained net
profits for the preceding two calendar years, less required transfers to
surplus. The Comptroller of the Currency also has authority to prohibit a
national bank from paying dividends if the Comptroller of the Currency deems
such payment to be an unsafe or unsound practice, and the Federal Reserve Board
has the same authority over bank holding companies.
The Federal Reserve Board has established guidelines with respect to
the maintenance of appropriate levels of capital by registered bank holding
companies. Compliance with such standards, as presently in effect, or as they
may be amended from time to time, could possibly limit the amount of dividends
that the Company may pay in the future. In 1985, the Federal Reserve Board
issued a policy statement on the payment of cash dividends by bank holding
companies. In the statement, the Federal Reserve Board expressed its view that a
holding company experiencing earnings weaknesses should not pay cash dividends
exceeding its net income, or which could only be funded in ways that weakened
the holding company's financial health, such as by borrowing. As a depository
institution, the deposits of which are insured by the FDIC, the Bank may not pay
dividends or distribute any of its capital assets while it remains in default on
any assessment due the FDIC.
LITIGATION
There is no pending or threatened litigation within the knowledge of
the Directors of the Company.
- 24 -
<PAGE>
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Kennedy, Baris & Lundy, L.L.P., Bethesda, Maryland. Members of
such firm may subscribe to purchase shares of Common Stock hereby.
EXPERTS
The balance sheet of America's Bancorp, Inc. (a development stage
company) as of August 31, 1997 included in this Prospectus has been included
herein in reliance upon the report of Yount, Hyde & Barbour, P.C., independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing.
- 25 -
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report.................................................F-1
Audited Balance Sheet of the Company at August 31, 1997......................F-2
Notes to Audited Balance Sheet...............................................F-3
- 26 -
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
America's Bancorp, Inc.
Washington, D.C.
We have audited the accompanying balance sheet of America's Bancorp, Inc. (a
Development Stage Company) as of August 31, 1997. This financial statement is
the responsibility of the Company's management. Our responsibility is to express
an opinion on this financial statement 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 balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
of the balance sheet provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of America's Bancorp, Inc. (a
Development Stage Company) as of August 31, 1997 in conformity with generally
accepted accounting principles.
/s/ YOUNT, HYDE & BARBOUR, P.C.
-------------------------------
Winchester, Virginia
September 5, 1997
F-1
<PAGE>
AMERICA'S BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
August 31, 1997
Assets
Cash $ 84 601
Organization expense (Note 2) 67 539
Prepaid expenses (Note 2) 3 960
----------
Total assets $ 156 100
=========
Liabilities and Stockholders' Equity
Liabilities
Payable to organizers (Note 2) $ 154 641
Accounts Payable 1 459
----------
$ 154 100
Stockholders' Equity
Common stock, $.01 par, 5,000,000 shares authorized,
-0- shares issued and outstanding --
Preferred Stock, $.01 par, 1,000,000 shares authorized,
-0- shares issued and outstanding --
Total Liabilities and Stockholders' Equity $ 156 100
=========
See Accompanying Notes to Balance Sheet.
F-2
<PAGE>
AMERICA'S BANCORP, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO BALANCE SHEET
AUGUST 31, 1997
1. NATURE OF BUSINESS
America's Bancorp, Inc. (the "Company") was incorporated on September
4, 1997 under the laws of the State of Virginia to operate as a bank
holding company. It is intended that the Company will purchase all the
shares of common stock to be issued by America's Bank, N.A. (the
"Bank"). An application to organize the Bank was filed with the
Comptroller of the Currency on August 1, 1997. Neither the Company nor
the Bank has commenced operations and neither will do so unless the
public offering of stock by the Company is completed and the Bank meets
the conditions of the Comptroller of the Currency to receive its
charter authorizing it to commence operations as a commercial bank, and
has obtained the approval of the FDIC to insure its deposit accounts.
2. PAYABLE TO ORGANIZER
Organizers of the Company have advanced an aggregate of $150,000 to pay
certain organization expenses (principally legal and filing fees).
These advances are to be repaid with interest of 8.5% from the proceeds
of the common stock offering at the time the Company opens for
business. Organization expenses will be amortized to expense during the
Company's initial year of operations.
F-3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
============================================================ ======================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING MADE
HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDERANY 1,000,000
CIRCUMSTANCES, CREATE ANY UNDER ANY CIRCUMSTANCES, CREATE SHARES OF
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE COMMON STOCK
AFFAIRS OF THE COMPANY OR BANK SINCE THE DATE OF THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO $10.00 PER SHARE
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN
ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION, OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO.
TABLE OF CONTENTS
PAGE
Available Information......................................2
Prospectus Summary ........................................3
Risk Factors...............................................5 AMERICA'S BANCORP, INC.
The Company and the Bank...................................6
The Offering...............................................7
Use of Proceeds...........................................10
Business of the Company...................................10
Pro Forma Capitalization of the Company...................11
Business of the Bank......................................11
Supervision and Regulation................................14
Management................................................19
Executive Compensation and Certain
Transactions with Management...........................22
Shares Eligible for Future Sale...........................23
Description of Capital Stock..............................23
Litigation................................................24 _____________________
Legal Matters.............................................25
Experts...................................................25 PROSPECTUS
Index to Financial Statements.............................26 _____________________
UNTIL _________, 1997, ALL DEALERS EFFECTING TRANSACTIONS IN
THE REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER ____________, 1997
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
============================================================ ======================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VI of the Company's Articles of Incorporation provides that the
Company shall, to the full extent permitted and in the manner prescribed by the
Virginia Stock Corporation Act and any other applicable law, indemnify a
director or officer of the Company who is or was a party to any proceeding by
reason of the fact that he is or was a director or officer, or is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise.
The Virginia Stock Corporation Act provides, in pertinent part, as
follows:
Section 13.1-697. AUTHORITY TO INDEMNIFY.
A. Except as provided in subsection D of this section, a corporation
may indemnify an individual made a part to a proceeding because he is or was a
director against liability incurred in the proceeding if:
1. He conducted himself in good faith; and
2. He believed:
a. In the case of conduct in his official capacity with
the corporation, that his conduct was in its best interests;
and
b. In all other cases, that his conduct was at least not
opposed to its best interests; and
3. In the case of any criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful.
B. A director's conduct with respect to an employee benefit plan for a
purpose he believed to be in the interest of the participants in and
beneficiaries of the plan is conduct that satisfies the requirement of
subdivision 2 b of subsection A of this section.
C. The termination of a proceeding by judgment, order, settlement or
conviction is not, of itself, determinative that the director did not
meet the standard of conduct described in this section.
D. A corporation may not indemnify a director under this section:
1. In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
2. In connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in
his official capacity, in which he was adjudged liable on the
basis that personal benefit was improperly received by him.
E. Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
<PAGE>
SECTION 13.1-698. MANDATORY INDEMNIFICATION.
Unless limited by its articles of incorporation, a corporation, a corporation
shall indemnify a director who entirely prevails in the defense of any
proceeding to which he was a party because he is or was a director of the
corporation against reasonable expenses incurred by him in connection with the
proceeding.
*****
SECTION 13.1-701. DETERMINATION AND AUTHORIZATION OF INDEMNIFICATION.
A. A corporation may not indemnify a director under ss. 13.1-697 unless
authorized in the specific case after a determination has been made
that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set forth in
ss. 13.1-697.
B. The determination shall be made:
1. By the board of directors by a majority vote of a quorum
consisting of directors not at the time parties to the
proceeding;
2. If a quorum cannot be obtained under subdivision 1 of this
subsection, by majority vote of a committee duly designated by
the board of directors (in which designation directors who are
parties may participate), consisting solely of two or more
directors not at the time parties to the proceeding;
3. By special legal counsel:
a. Selected by the board of directors or its committee
in the manner prescribed in subdivisions 1 and 2 of
this subsection; or
b. If a quorum of the board of directors cannot be
obtained under subdivision 1 of this subsection and a
committee cannot be designated under subdivision 2 of
this subsection directors who are parties may
participate; or
4. By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the
proceeding may not be voted on the determination.
C. Authorization of indemnification and evaluation as to reasonableness of
expenses shall be made in the same manner as the determination that
expenses shall be made in the same manner as the determination that
indemnifications permissible, except that if the determination is made
by special legal counsel, authorization of indemnification and
evaluation as to reasonableness of expenses shall be made by those
entitled under subdivision 3 of subsection B of this section to select
counsel.
SECTION 13.1-702. INDEMNIFICATION OF OFFICERS, EMPLOYEES AND AGENTS.
Unless limited by a corporations's articles of incorporation,
1. An officer of the corporation is entitled to mandatory
indemnification under ss. 13.1-698, and is entitled to apply
for court-ordered indemnification under ss. 13.1-700.1, in
each case to the same extent as a director; and
2. The corporation may indemnify and advance expenses under
this article to an officer, employee, or agent of the
corporation to the same extent as to a director.
*****
<PAGE>
SECTION 13.1-704. APPLICATION OF ARTICLE.
A. Unless the articles of incorporation or bylaws expressly provide
otherwise, any authorization of indemnification in the articles of
incorporation or bylaws shall not be deemed to prevent the corporation
from providing the indemnity permitted or mandated by this article.
B. Any corporation shall have power to make any further indemnity
including indemnity with respect to a proceeding by or in the right of
the corporation, and to make additional provision for advances and
reimbursement of expenses, or any director, officer, employee or agent
that may be authorized by the articles of incorporation or any bylaw
made by the shareholders or any resolution adopted, before or after
the event, by the shareholders, except an indemnity against (i) his
wilful misconduct, or (ii) a knowing violation of the criminal law.
Unless the articles of incorporation, or any such bylaw or resolution
expressly provide otherwise, any determination as to the right to any
further indemnity shall be made in accordance with $ 13.1-701 B. Each
such indemnity may continue as to a person who has ceased to have the
capacity referred to above and may inure to the benefit of the heirs,
executors and administrators of such a person
C. No right provided to any person pursuant to this section may be reduced
or eliminated by any amendment of the articles or incorporation or
bylaws or eliminated by any amendment of the articles of incorporation
or bylaws with respect to any act or omission occurring before such
amendment.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses payable by the Company in connection with the
Offering described in this Registration Statement (other than underwriting
discounts and commissions) are as follows:
SEC Registration Fee....................................................$ 3,030
*Blue Sky Filing Fees and Expenses (Including counsel fees)................5,000
*Legal Fees...............................................................25,000
*Printing and Engraving...................................................10,000
*Accounting Fees and Expenses..............................................7,500
*Other Expenses............................................................9,470
Total $ 60,000
========
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
None.
ITEM 27. EXHIBITS.
Number Description
3(a) Certificate of Incorporation of the Company
3(b) Bylaws of the Company
5 Opinion of Kennedy, Baris & Lundy, L.L.P.
21 Subsidiaries of the Registrant
23(a) Consent of Yount, Hyde & Barbour, P.C.,
Independent Certified Public Accountants
<PAGE>
Number Description
------ -----------
23(b) Consent of Kennedy, Baris & Lundy, L.L.P., included
in Exhibit 5
99 Form of Subscription Agreement
ITEM 28. UNDERTAKINGS. The Registrant hereby undertakes that it will:
(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to: (i) include any
prospectus required by section 10(a)(3) of the Securities Act; (ii) reflect in
the prospectus any facts or events which, individually or together represent a
fundamental change in the information in the registration statement; and (iii)
include any additional or changed material information on the plan of
distribution.
(2) for determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Washington, District of Columbia on September 4,
1997.
AMERICA'S BANCORP, INC.
By: /s/ Linwood C. Cotman, Jr.
--------------------------
Name: Linwood C. Cotman, Jr.
Title: President
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates stated.
NAME POSITION DATE
Director
- ----------------------------
Philip W. Allin
/s/ James G. Calomiris Director September 4, 1997
- ----------------------------
James G. Calomiris
Director
- ----------------------------
Tung Yat Chan
/s/ Linwood C. Cotman, Jr. President and Director September 4, 1997
- ---------------------------- (Principal Executive Officer)
Linwood C. Cotman, Jr.
/s/ Harry A. Dematatis Director September 4, 1997
- ----------------------------
Harry A. Dematatis
/s/ John N. Deoudes Director September 4, 1997
- ----------------------------
John N. Deoudes
/s/ C. Steven Georgilakis Director September 4, 1997
- ----------------------------
C. Steven Georgilakis
/s/ Thomas O. Griel Senior Vice President September 4, 1997
- ---------------------------- and Director
Thomas O. Griel
/s/ John C. James Director September 4, 1997
- ----------------------------
John C. James
<PAGE>
/s/ Matthew R. Johnson Director September 4, 1997
- ----------------------------
Matthew R. Johnson
/s/ Nabil Y. Khawand Director September 4, 1997
- ----------------------------
Nabil Y. Khawand
/s/ Howard Lee Chairman of the Board of September 4, 1997
- ---------------------------- Directors and Chief Executive
Howard Lee Officer
/s/ William S. Paleos Director September 4, 1997
- ----------------------------
William S. Paleos
/s/ David G. Russell Senior Vice President and Director September 4, 1997
- ---------------------------- (Principal Financial and
David G. Russell Accounting Officer)
/s/ Leonidas A. Vondas Director September 4, 1997
- ----------------------------
Leonidas A. Vondas
EXHIBIT 3(A)
Articles of Incorporation of the Company
<PAGE>
ARTICLES OF INCORPORATION
OF
AMERICA'S BANCORP, INC.
ARTICLE I. Name. The name of the corporation is:
America's Bancorp, Inc.
ARTICLE II. Purpose. The purpose of the Corporation is to engage in any
lawful act or business for which corporations may be formed under the Virginia
Stock Corporation Act.
ARTICLE III. Capital Stock. The number of shares of stock of all
classes which the Corporation shall have authority to issue is six million
(6,000,000), five million (5,000,000) of which shall be Common Stock, par value
$.01 per share and one million (1,000,000) of which shall be preferred stock,
par value $.01 per share. The Board of Directors, by action of a majority of the
full Board of Directors, shall have the authority to issue the shares of
preferred stock from time to time on such terms as it may determine, and to
divide the preferred stock into one or more classes or series, and, in
connection with the creation of such classes or series to fix by resolution or
resolutions the designations, voting powers, preferences, participation,
redemption, sinking fund, conversion, dividend, and other optional or special
rights of such classes or series, and the qualifications, limitations or
restrictions thereof.
ARTICLE IV. Preemptive Rights. The holders of the capital stock of the
Corporation shall not have any preemptive or preferential rights to purchase or
otherwise acquire any shares of any class of capital stock of the corporation,
whether now or hereafter authorized, except as the Board of Directors may
specifically provide.
ARTICLE V. Cumulative Voting. The holders of the capital stock of the
Corporation shall not have the right to cumulate votes in the election of
directors.
ARTICLE VI. Limitation of Liability and Indemnification.
(1) To the full extent that the Virginia Stock Corporation Act, as it
exists on the date hereof or may hereafter be amended, permits the limitation or
elimination of the liability of directors or officers, a director or officer of
the Corporation shall not be liable to the Corporation or its shareholders for
monetary damages.
(2) To the full extent permitted and in the manner prescribed by the
Virginia Stock Corporation Act and any other applicable law, the Corporation
shall indemnify a director or officer of the Corporation who is or was a party
to any proceeding by reason of the fact that he is or was such a director or
officer or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. The Board of Directors is
hereby empowered, by majority vote of a quorum of disinterested directors, to
contract in advance to indemnify any director or officer.
(3) The Board of Directors is hereby empowered, by majority vote of a
quorum of disinterested directors, to cause the Corporation to indemnify or
contract in advance to indemnify any director, and to cause the Corporation to
indemnify or contract in advance to indemnify any person not specified in
Section 2 of this Article who was or is a party to any proceeding, by reason of
the fact that he is or was an employee or agent of the Corporation, or is or was
serving at the request of the Corporation as director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, to the same extent as if such person were
specified as one to whom indemnification is granted in Section 2.
1
<PAGE>
(4) Notwithstanding any other provisions in this Article VI, the
Corporation shall indemnify a director who entirely prevails in the defense of
any proceeding to which he was a party because he is or was a director of the
Corporation against reasonable expenses incurred by him in connection with the
proceeding.
(5) The Corporation may purchase and maintain insurance to indemnify it
against the whole or any portion of the liability assumed by it in accordance
with this Article and may also procure insurance, in such amounts as the Board
of Directors may determine, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability asserted against or incurred by any such
person in any such capacity or arising from his status as such, whether or not
the Corporation would have power to indemnify him against such liability under
the provisions of this Article.
(6) In the event there has been a change in the composition of a
majority of the Board of Directors after the date of the alleged act or omission
with respect to which indemnification is claimed, any determination as to
indemnification and advancement of expenses with respect to any claim for
indemnification made pursuant to Section 2 of this Article VI shall be made by
special legal counsel agreed upon by the Board of Directors and the proposed
indemnitee. If the Board of Directors and the proposed indemnitee are unable to
agree upon such special legal counsel, the Board of Directors and the proposed
indemnitee each shall select a nominee, and the nominees shall select such
special legal counsel.
(7) The provisions of this Article VI shall be applicable to all
actions, claims, suits or proceedings commenced after the adoption hereof,
whether arising from any action taken or failure to act before or after such
adoption. No amendment, modification or repeal of this Article shall diminish
the rights provided hereby or diminish the right to indemnification with respect
to any claim, issue or matter in any then pending or subsequent proceeding that
is based in any material respect on any alleged action or failure to act prior
to such amendment, modification or repeal.
(8) The provisions of this Article VI shall not be exclusive of any
other indemnification to which such persons may be entitled under any bylaw,
agreement, statute, vote of shareholders or disinterested directors, or
otherwise.
(9) Reference herein to directors, officers, employees or agents shall
include former directors, officers, employees and agents and their respective
heirs, executors and administrators.
ARTICLE VII. Registered Office. The Corporation's initial registered
office shall be located at 4912 Van Masdag Court, Annandale, Fairfax County,
Virginia. The Corporation's initial registered agent shall be David G.
Russell, a resident of Virginia and a director of the Corporation.
ARTICLE VIII. Directors. The number of directors constituting the
entire board shall be not less than five (5) nor more than twenty-five (25), the
exact number of which as may be fixed from time to time in accordance with the
bylaws, provided that the number of directors shall not be reduced so as to
shorten the term of any director then in office, and further provided that the
number of directors shall be fifteen (15) until otherwise fixed by a majority of
the board.
ARTICLE IX. Factors to be Considered in Certain Transactions. In the
event the board of directors shall evaluate a business combination or other
offer of another party to make a tender or exchange offer for any equity
security of the Corporation; merge or consolidate the Corporation with another
corporation; purchase or otherwise acquire all or substantially all of the
properties and assets of the Corporation; engage in any transaction similar to,
or having similar effects as, any of the foregoing (a "business combination"),
the directors shall consider, among other things, the following factors: the
effect of the business combination on the corporation and its subsidiaries, and
their respective shareholders, employees, customers and the communities which
they serve; the timing of the proposed business combination; the risk that the
proposed business combination will not be consummated; the reputation,
management capability and performance history of the person proposing the
business combination; the current market price of the corporation's capital
stock; the relation of the price offered to the current value of the corporation
in a freely
2
<PAGE>
negotiated transaction and in relation to the directors' estimate of the future
value of the corporation and its subsidiaries as an independent entity or
entities; tax consequences of the business combination to the corporation and
its shareholders; and such other factors deemed by the directors to be relevant.
In such considerations, the board of directors may consider all or certain of
such factors as a whole and may or may not assign relative weights to any of
them. The foregoing is not intended as a definitive list of factors to be
considered by the board of directors in the discharge of their fiduciary
responsibility to the corporation and its shareholders, but rather to guide such
consideration and to provide specific authority for the consideration by the
board of directors of factors which are not purely economic in nature in light
of the circumstances of the corporation and its subsidiaries at the time of such
proposed business combination.
Dated: September 2, 1997 ----------------------------
James I. Lundy, III
Incorporator
3
EXHIBIT 3(B)
Bylaws of the Company
<PAGE>
AMERICA'S BANCORP, INC.
BY-LAWS
ARTICLE I
Meetings of Shareholders
------------------------
Section 1.1 Annual Meeting. The regular annual meeting of shareholders
for the election of Directors and for the transaction of whatever other business
may properly come before the meeting, shall be held at the Main Office of the
Company, or such other place as the Board of Directors may designate, each year
on such day in the second quarter of the year as the Board of Directors
determines. Notice of such meeting shall be mailed, postage prepaid, at least
ten days prior to the date thereof, addressed to each shareholder at his address
appearing on the books of the Company unless notice is waived by unanimous
consent of all shareholders. If, for any cause, an election of Directors is not
made on the said day, the Board of Directors shall order the election to be held
on some subsequent day, as soon thereafter as practicable, according to the
provisions of law; and notice thereof shall be given in the manner therein
provided for the annual meeting.
Section 1.2 Special Meetings. Except as otherwise specifically provided
by statute, special meetings of the shareholders shall be called for any purpose
at any time by the Secretary at the request of the Chairman of the Board of
Directors, the President, or the Board of Directors pursuant to a resolution
approved by a majority of the entire Board of Directors. Every such special
meeting, unless otherwise provided by law, or waived by unanimous consent of all
shareholders, shall be called by mailing, postage prepaid, not less than ten
days prior to the dated fixed for such meeting, to each shareholder at his
address appearing on the books of the Company a notice stating the time, place
and purpose of the meeting.
Section 1.3 Nominations for Director. Nominations for the election of
Directors may be made by the Board of Directors or a committee appointed by the
Board of Directors or by any shareholder entitled to vote in the election of
Directors generally. However, any shareholder entitled to vote in the election
of Directors generally may nominate one or more persons for election as
Directors at a meeting only if written notice of such shareholder's intent to
make such nomination or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the Secretary of the Company not
later than (i) with respect to an election to be held at the annual meeting of
shareholders, ninety days prior to the anniversary date of the immediately
preceding annual meeting, and (ii) with respect to an election to be held at a
special meeting of the shareholders for the election of Directors, the close of
business on the seventh day following the date on which notice of such meeting
is first given to shareholders. Each such notice shall set forth: (i) the name,
age, business address and, if known, the residence address of each nominee
proposed, (ii) the principal occupation or employment of each such nominee,
(iii) the number of shares of each class of stock of the Company beneficially
owned or directly or indirectly controlled by each such nominee, (iv) such other
information regarding each such nominee as would be required to be included in a
proxy statement soliciting proxies for the election of the proposed nominee
pursuant to Regulation 14A under the Securities and Exchange Act of 1934, as
amended, (v) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder and (vi) as to the shareholder making such nomination (a) his
name and address as they appear on the stock transfer books of the Company, and
(b) the number of shares of each class of stock of the Company beneficially
owned or directly or indirectly controlled by such shareholder. For purposes of
this paragraph, beneficial ownership of shares shall be determined in accordance
with Rule 13d-3 and Rule 13d-5 under the Securities and Exchange Act of 1934, as
amended, and a proposed nominee or shareholder shall be deemed to control all
shares which such proposed nominee or shareholder would be deemed or presumed to
control in a control determination made in accordance with the provisions of
applicable bank regulatory laws and regulations. Notwithstanding any other
provision hereof, failure of any shareholder nomination for election as director
to comply with the provisions of this Article shall result in the proposed
nomination not being presented to the shareholders at the meeting.
Section 1.4 Shareholder Proposals. Any shareholder entitled to vote in
the election of Directors generally may propose one or more matters for
presentation to the shareholders at any annual meeting of shareholders, provided
that
- 1 -
<PAGE>
such shareholder has provided written notice of such shareholder's intent to
make such proposal or proposals, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Company not later than ninety
days prior to the anniversary date of the immediately preceding annual meeting.
Each such notice shall set forth: (i) the name and address of the shareholder(s)
who intends to make the proposal, (ii) the number of shares of each class of
stock of the Company beneficially owned or directly or indirectly controlled by
each such person; (iii) such other information regarding each such proposal as
would be required to be included in a proxy statement soliciting proxies for the
approval of such proposal pursuant to Regulation 14A under the Securities and
Exchange Act of 1934, as amended, and (iv) a description of all arrangements or
understandings between the shareholder(s) and any other person or persons
(naming such person or persons) pursuant to which the proposal or proposals are
to be made by the shareholder(s). For purposes of this paragraph, beneficial
ownership of shares shall be determined in accordance with Rule 13d-3 and Rule
13d-5 under the Securities and Exchange Act of 1934, as amended, and a
shareholder shall be deemed to control all shares which such shareholder would
be deemed or presumed to control in a control determination made in accordance
with the provisions of applicable bank regulatory laws and regulations. The
presiding officer of the meeting may refuse to acknowledge or present any
proposal of any person not made in compliance with the foregoing procedure.
Nothing contained in this By-law shall require the presentation for the vote or
consideration of the shareholders of any matter which is not appropriate for
action by the shareholders. No business or proposal shall be presented for the
vote or consideration of shareholders at a special meeting of shareholders other
than that contained in the notice of meeting and matters incidental to the
conduct of such meeting.
Section 1.5 Judges of Election. Every election of Directors shall be
managed by three judges, who shall be appointed by the Board of Directors. The
judges of election shall hold and conduct the election at which they are
appointed to serve; and, after the election, they shall file with the Cashier,
if any, the officer performing the functions of a Cashier, or the Secretary, a
certificate under their hands, certifying the result thereof and names of the
Directors elected. The judges of an election, at the request of the Chairman of
the meeting, shall act as tellers of any other vote by ballot taken at such
meeting, and shall certify the result thereof.
Section 1.6 Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing. Proxies shall be valid only
for one meeting, to be specified therein, and any adjournments of such meeting.
Proxies shall be dated and shall be filed with the records of the meeting.
Section 1.7 Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Incorporation.
Section 1.8 Presiding Officer and Secretary. Unless the Board of
Directors shall appoint another person with respect to any meeting, the Chairman
of the Board of Directors, or in his absence, the President, shall serve as the
presiding officer for each annual or special meeting of shareholders, and the
Cashier, the person performing the functions of Cashier, or the Secretary, shall
serve as Secretary for the meeting.
Section 1.9 Action by Shareholders. All action by holders of the
Company's outstanding voting securities shall be taken at an annual or special
meeting of the shareholders duly called as provided by statute, the Articles of
Incorporation and the By-Laws. Shareholders of the Company shall not have the
power to act by written consent.
Section 1.10 Voting. Whenever Directors are to be elected at a meeting,
they shall be elected by a plurality of the votes cast at the meeting by the
holders of stock entitled to vote thereat. Whenever any corporate action, other
than the election of Directors, is to be taken by vote of shareholders at a
meeting, it shall be authorized by a majority of the capital stock issued,
outstanding and entitled to vote, unless otherwise required by law, by the
Articles of Incorporation or by these By-Laws.
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<PAGE>
Except as otherwise provided by law or by the Articles of
Incorporation, each holder of record of capital stock of the Company entitled to
vote on any matter shall be entitled to one vote for each share of capital stock
standing in the name of such holder on the stock ledger of the Company on the
record date for the determination of the shareholders entitled to vote on such
matter.
ARTICLE II
Directors
---------
Section 2.1 Board of Directors. The Board of Directors (hereinafter
occasionally referred to as the "Board"), shall have power to manage and
administer the business affairs of the Company. Except as expressly limited by
law, all corporate powers of the Company shall be vested in and may be exercised
by said Board.
Section 2.2 Number. The Board shall consist of not less than five nor
more than twenty-five persons, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full Board or by resolution of the shareholders at any meeting thereof.
Section 2.3 Organization Meeting. The Cashier, or the Secretary, upon
receiving the certificate of the judges of the results of any election, shall
notify the Directors-elect of their election and of the time at which they are
required to meet at the Main Office of the Company or such other designated
location for the purpose of organizing the new Board and electing and appointing
officers of the Company for the succeeding year. Such meeting shall be held on
the day of the election or as soon thereafter as practicable, and, in any event,
within thirty days thereof. If, at the time fixed for such meeting, there shall
not be a quorum present, the Directors present may adjourn the meeting, from
time to time, until a quorum is obtained.
Section 2.4 Regular Meetings. The Regular Meetings of the Board of
Directors shall be held, without notice, on the second Wednesday of each month
at the Main Office or such other designated location. When any regular meeting
of the Board falls upon a holiday, the meeting shall be held on the next banking
business day unless the Board shall designate some other day.
Section 2.5 Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, or at the request of three
(3) or more Directors. Each member of the Board shall be given notice stating
time and place, by telephone, telegram, facsimile, letter or in person, of each
such special meeting, except that notice of such special meeting may be waived
by an instrument signed by all of the Directors before or after such special
meeting and filed with the minutes of such meeting.
Section 2.6 Quorum. A majority of the Directors then in office shall
constitute a quorum at any meeting, except when otherwise provided by law; but a
lesser number may adjourn any meeting, from time to time, and the meeting may be
held, as adjourned without further notice. If a quorum is present, action by a
majority of those Directors in attendance shall constitute action of the Board.
Section 2.7 Written Consents and Telephonic Participation. Any action
required or permitted to be taken at any meeting of the Board of Directors or
any committee thereof may be taken without a meeting if all members of the Board
or of such committee, as the case may be, consent thereto in writing and the
writings are filed with the minutes of proceedings of the Board or committee.
Members of the Board of Directors or any committee designated by the Board may
participate in a meeting of the Board or such committee by means of conference
telephone or similar communications equipment. Participation in a meeting by
communications means pursuant to this section shall constitute presence in
person at such meeting.
Section 2.8 Vacancies. When any vacancy occurs among the Directors, the
remaining members of the Board, in accordance with the laws of the Commonwealth
of Virginia, may appoint a Director to fill such vacancy at any regular meeting
of the Board or at a special meeting called for that purpose, or if the
Directors remaining in office constitute
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less than a quorum, by the vote of a majority of the Directors remaining in
office, or by shareholders at a special meeting called for that purpose.
ARTICLE III
Committees of the Board
-----------------------
Section 3.1 Appointment and Powers. The Board of Directors may from
time to time, by resolution passed by a majority of the Board, designate an
executive committee and such other committee of committees as it may determine,
each committee to consist of two or more Directors of the Company. Any such
committee, to the extent provided in the resolution, shall have and may exercise
any of the powers and authority of the Board of Directors in the management of
the business and affairs of the Company, and may authorize the seal of the
Company to be affixed to all papers which may require it, all subject to the
exceptions set forth in Virginia law. The Board may designate one or more
Directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of any member of any committee and of any alternate member
designated by the Board, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any of such absent or disqualified member. Any such
committee may adopt rules governing the method of calling and time and place of
holding its meetings. Unless otherwise provided by the Board of Directors, a
majority of any such committee shall constitute a quorum for the transaction of
business, and the act of a majority of the members of such committee present at
a meeting at which a quorum is present shall constitute action of the committee.
Each committee shall keep a record of its acts and proceedings and shall report
thereon to the Board of Directors whenever requested so to do. Any or all
members of any such committees may be removed, with or without cause, by
resolution of the Board of Directors, adopted by a majority of the Board.
ARTICLE IV
Officers
--------
Section 4.1 Officers. The officers of the bank, who shall be elected by
the Board of Directors, shall be a Chairman of the Board; a President; and one
or more Vice Presidents who may have such designations, if any, as the Board of
Directors may determine; a Secretary; and a Cashier. The Board of Directors from
time to time may elect such other officers or assistant officers as the Board of
Directors may from time to time deem necessary or appropriate. Any two or more
of the foregoing offices may be held by the same person. The Chairman of the
Board and President shall be chosen from among the Directors.
Section 4.2 Term. The term of office of each officer shall be until the
first meeting of the Board of Directors following the next annual meeting of
shareholders, or until his respective successor has been elected and qualified,
or until his earlier resignation or removal. Any officer may be removed from
office at any time with or without cause by the affirmative vote of a majority
of the members of the Board of Directors then in office. The removal of an
officer without cause shall be without prejudice to his contract rights, if any,
but the election or appointment of an officer shall not of itself create
contract rights.
Section 4.3 Chairman of the Board. The Chairman of the Board shall
supervise the carrying out of the policies adopted or approved by the Board of
Directors. He shall have authority for the general supervision, management, and
control of the business and affairs of the Company and shall perform all other
duties and exercise all other powers as are incident to the office of Chairman
of the Board and as may be prescribed by these By-Laws. The Chairman of the
Board shall preside at all meetings of the shareholders and of the Board of
Directors. He shall have such other powers and shall perform such other duties
as may be prescribed by the Board of Directors from time to time.
Section 4.4 President. The Board of Directors shall appoint one of its
members to be President of the Company. The President shall have general
executive powers and shall have and may exercise any and all other powers and
duties pertaining by law, regulation or practice, to the office of President, or
imposed by these By-Laws. He may vote the stock or other securities of any other
domestic or foreign corporation which may at any time be owned by the
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Company, may execute any shareholders' or other consents in respect thereof and
may in his discretion delegate such powers by executing proxies, or otherwise,
on behalf of the Company. He shall also have and may exercise such further
powers and duties as from time to time may be conferred upon, or assigned to,
him by the Board of Directors. The President shall see that the books, reports,
statements and certificates required by Virginia law are properly kept, made and
filed according to law.
Section 4.5 Vice President. Each Vice President, including any given a
special or other designation by the Board of Directors in accordance with
Section 4.1 of this Article IV, shall have such powers and shall perform such
duties which are in the normal and usual business and affairs of the operating
division or divisions or staff department, the operations for which he is
responsible, including the authority to sign contracts and other agreements
which are within the ordinary course of the business of such division or
divisions or staff departments.
Section 4.6 Other Officers. Subject to the authority of the President
and the Board of Directors, the Secretary, Cashier, and any other officers
appointed by the Board of Directors shall have such duties and responsibilities
as shall from time to time be prescribed by the person who is such officer's
immediate superior, including such duties and responsibilities as are usually
performed by persons holding such corporate office.
ARTICLE V
Stock and Stock Certificates
Section 5.1 Transfers. Transfers of stock shall be made only upon the
books of the Company by the holder, in person or by duly authorized attorney,
and on the surrender of the certificate or certificates for such stock properly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer. The Board of Directors shall have the power to make all
such rules and regulations, not inconsistent with the Articles of Incorporation
and these By-laws, as the Board may deem appropriate concerning the issue,
transfer and registration of certificates for stock of the Company. The Board
may appoint one or more transfer agents or registrars of transfers, or both, and
may require all stock certificates to bear the signature of either or both,
which signature or signatures may be in facsimile form if the Board by
resolution authorizes such procedure.
Except as otherwise provided by law, the Company shall be
entitled to recognize the exclusive right of a person who is registered on its
books as the owner of shares of its capital stock to receive dividends or other
distributions and to vote as such owner, and hold such person liable for calls
and assessments. The Company shall not be bound to recognize any equitable,
legal, or other claim to or interest in such share or shares on the part of any
other person whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
Section 5.2 Stock Certificates. Certificates of stock shall bear the
signature of two officers designated by the Board of Directors and shall be
signed manually or by facsimile process, and may bear the corporate seal or its
facsimile. Each certificate shall recite on its face the name of the Company and
that it is organized under the laws of the Commonwealth of Virginia, the name of
the person to whom issued; and the number and class of shares and the
description of the series, if any, the certificate represents.
Section 5.3 Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issue in place of
any certificate or certificates theretofore issued by the Company alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such a manner as it shall require and/or to give the Company a bond in such
sum as it may direct as indemnity against any claim that may be made against the
Company with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 5.4 Shareholder Record Date. In order that the Company may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or entitled to receive payment of any
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dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which shall not be more than seventy (70) days before
the date of such meeting, nor more than seventy (70) days prior to any other
action. Only such shareholders as shall be shareholders of record on the date so
fixed shall be entitled to notice of, and vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend or other
distribution, or to exercise such rights in respect of any such change,
conversion or exchange of stock, or to participate in such action, as the case
may be, notwithstanding any transfer of any stock on the books of the Company
after any record date so fixed.
If no record date is fixed by the Board of Directors, (i) the record
date for determining shareholders entitled to notice of or to vote at a meeting
of shareholders shall be at the close of business on the date next preceding the
date on which notice is given, and (ii) the record date for determining
shareholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
A determination of shareholders of record entitled to notice of or to
vote at a meeting of shareholders shall apply to any adjournment of the meeting
to the extent permitted by Virginia law; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
ARTICLE VI
Seal
The President, the Cashier, the Secretary or any Assistant Cashier or
Assistant Secretary, or other officer thereunto designated by the Board of
Directors shall have authority to affix the corporate seal to any document
requiring such seal, and to attest the same. Such seal shall be substantially in
the following form:
( Impression )
( of )
( Seal )
ARTICLE VII
Miscellaneous Provisions
Sections 7.1 Fiscal Year. The Fiscal Year of the Company shall be the
calendar year.
Section 7.2 Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyance, transfers, satisfactions, declarations, petitions,
schedules, accounts, affidavits, bonds, undertakings, proxies, and other
documents may be signed, executed, acknowledged, verified, delivered or accepted
on behalf of the Company by the Chairman of the Board, or the President or any
Vice President, or the Secretary, or the Cashier, or the officer vested with the
authority of a Cashier. Any such instruments may also be executed, acknowledged,
verified, delivered or accepted in behalf of the Company in such other manner
and by such other officers as the Board of Directors may from time to time
direct. The provisions of this Section 7.2 are supplementary to any other
provisions of these By-Laws.
Section 7.3 Records. The Articles of Incorporation, the By-Laws and the
proceedings of all meetings of the shareholders, the Board of Directors, and
standing committees of the Board, shall be recorded in appropriate minute books
provided for the purpose. The minutes of each meeting shall be signed by the
Secretary, Cashier, or other officer appointed to act as Secretary of the
meeting.
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<PAGE>
ARTICLE VIII
By-laws
Section 8.1 Inspection. A copy of the By-laws, with all amendments
thereof, shall at all times be kept in a convenient place at the Main Office of
the Company, and shall be open for inspection to all shareholders, during
banking hours.
Section 8.2 Amendments. The By-laws may be amended, altered or repealed
at any regular meeting of the Board of Directors, by a vote of a majority of the
total number of Directors, or at any special or annual meeting of shareholders,
by a vote of a majority of the shares of the Company's capital stock issued,
outstanding and entitled to vote.
I certify that: (1) I am the duly constituted Secretary of America's
Bancorp, Inc. and Secretary of its Board of Directors, and as such officer am
the official custodian of its records; (2) the foregoing By-laws are the By-laws
of said Company, and all of them are now lawfully in force and effect.
IN TESTIMONY WHEREOF, I have hereunto affixed my official signature and
seal of the said Company, in the District of Columbia, on this _____________ of
____________, 1997.
--------------------------------------
, Secretary
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EXHIBIT 5
Opinion of Kennedy, Baris & Lundy, L.L.P.
<PAGE>
KENNEDY, BARIS & LUNDY, L.L.P.
TEXAS OFFICE: ATTORNEYS AT LAW WASHINGTON, DC OFFICE:
SUITE 1775 SUITE 300 SEVENTH FLOOR
112 EAST PECAN STREET 4719 HAMPDEN LANE 1225 NINETEENTH STREET, NW
SAN ANTONIO, TX 78205 BETHESDA, MD 20814 WASHINGTON, DC 20036
(210) 228-9500 (301) 654-6040 (202) 835-0313
FAX: (210) 228-0781 FAX: (301) 654-1733 FAX: (202) 835-0319
September 9, 1997
Board of Directors
America's Bancorp, Inc.
Re: Registration Statement on Form SB-2
Gentlemen:
As counsel to America's Bancorp, Inc. (the "Company") we have
participated in the preparation of the Company's Registration Statement on Form
SB-2 to be filed with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, relating to the proposed public offering,
through the efforts of certain directors and officers of the Company, of up to
1,000,000 shares of the Company's Common Stock (the "Shares").
As counsel to the Company, we have examined such corporate records,
certificates and other documents of the Company, and made such examinations of
law and inquiries of such officers of the Company, as we have deemed necessary
or appropriate for purposes of this opinion. Based upon such examinations we are
of the opinion that the Shares, when sold in the manner set forth in the
Registration Statement, will be duly authorized, validly issued, fully paid and
non-assessable shares of the Common Stock of the Company.
We hereby consent to the inclusion of this opinion as an exhibit to the
Registration Statement on Form SB-2 filed by the Company and the reference to
our firm contained therein under "Legal Matters."
Sincerely,
/s/ Kennedy, Baris & Lundy, L.L.P.
----------------------------------
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
As of the date hereof, the Registrant has no subsidiaries. The
Registrant is in the process of formation of America's Bank, National
Association, a bank to be organized under the laws of the United States as a
wholly owned subsidiary of the Registrant.
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Registration Statement of our
report dated September 5, 1997 relating to the Balance Sheet of America's
Bancorp, Inc. (a Development Stage Company) and to the reference to our Firm
under the heading "Experts" in the Prospectus.
/s/ YOUNT, HYDE & BARBOUR, P.C.
-------------------------------
Winchester, Virginia
September 8, 1997
EXHIBIT 99
FORM OF
AMERICA'S BANCORP, INC.
SUBSCRIPTION AGREEMENT FOR OFFERING OF SHARES OF COMMON STOCK
THE TERMS AND CONDITIONS OF THE OFFERING ARE SET FORTH IN THE ACCOMPANYING
PROSPECTUS. PERSONS WHO WISH TO PURCHASE SHARES OF COMMON STOCK IN THE OFFERING
ARE URGED TO CAREFULLY READ THE PROSPECTUS IN ITS ENTIRETY PRIOR TO SUBMITTING
THIS SUBSCRIPTION AGREEMENT. ALL SUBSCRIPTIONS, ONCE SUBMITTED, ARE IRREVOCABLE
BY THE SUBSCRIBER.
1. Subscription for Shares of Common Stock. The undersigned hereby
irrevocably subscribes for _______________________________ shares of
Common Stock of America's Bancorp, Inc. at the purchase price of 10.00
per share.1
2. Purchase Price and Manner of Payment. The undersigned submits
herewith, by means of:
o check, bank draft or money order in the amount of
$__________________ ($10.00 multiplied by the total number of
shares subscribed for in 1 above), payable to "F&M Bank-
Allegiance Escrow Agent for America's Bancorp, Inc."
o wire transfer directed to _________ F&M Bank- Allegiance,
Escrow Agent for America's Bancorp, Inc.", ABA No. ___________
from (name of institution wiring funds); payment in the amount
of $_______________ ($10.00 multiplied by the total number of
shares subscribed for in 1 above), in full payment of the
Subscription Price of the shares subscribed for hereby.2
3. (a) Registration Instructions. This Part must be completed with
respect to all Shares purchased.
- --------------------------------------------------------------------------------
(Names(s) in which securities are to be registered)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Address, including Street, City, County, State and ZIP Code)
Taxpayer identification or Social Security Number: ____________________
- -------------------
1. Subject to a minimum subscription of 500 shares and a maximum subscription
of 5% of the total number of shares actually sold in the offering. Subject
to reduction in the event that the offering is oversubscribed.
2. If the aggregate subscription price paid does not equal the total number of
shares subscribed for, or if no number of shares is specified, the
subscriber will be deemed to have to subscribed for shares of Common Stock
to the full extent of the payment tendered.
<PAGE>
Manner in which securities are to be owned:
[ ] Tenants in Common [ ] Joint Tenants [ ] Uniform Transfer to Minors
[ ] Individual [ ] Other (for example, corporation, trust or estate. If
shares are purchased for a trust, the
date of the trust agreements and trust title must be included).
(b) Special Delivery Instructions: If certificate(s) representing the
Shares subscribed for is to be delivered to an address other than as indicated
on the face of this Agreement.
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Address, including Street, City, County, State and ZIP Code)
4. Deadline. This Subscription Agreement and payment in full of the
Subscription Price must be actually received by the Company NO LATER
THAN 5:00 P.M., eastern time, on ____________________ (the
"Termination Date").
Name of Subscriber:
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SIGNATURE:
- --------------------------------------------------------------------------------
(Signature(s) of subscriber(s) exactly as name(s) appear above)
Dated: ______________, 199___
If signature is by trustee(s), executor(s), administrator(s), guardian(s),
attorney(s)-in-fact, agent(s), officer(s) of a corporation or another acting in
a fiduciary or representative capacity, please provide the following information
as to such person.
Name (please print)
- --------------------------------------------------------------------------------
Capacity (Full title)
- --------------------------------------------------------------------------------
Address (including ZIP Code)
- --------------------------------------------------------------------------------
Business Telephone Number (including area code)
- --------------------------------------------------------------------------------
Taxpayer identification or Social Security Number
- --------------------------------------------------------------------------------
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