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As filed with the Securities and Exchange Commission on January 7, 1998
Registration No. 333-39609
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TARPON COAST BANCORP, INC.
(Name of Small Business Issuer as specified in its charter)
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FLORIDA 6712 65-0772718
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(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification Number)
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4055 TAMIAMI TRAIL
PORT CHARLOTTE, FLORIDA 33952
(941) 625-1744
(Address and telephone number of principal place of business)
LEWIS S. ALBERT
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
TARPON COAST BANCORP, INC.
4055 TAMIAMI TRAIL
PORT CHARLOTTE, FLORIDA 33952
(941) 625-1744
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
JOHN P. GREELEY, ESQUIRE CHESTER E. BACHELLER, ESQUIRE
SMITH, MACKINNON, GREELEY, HOLLAND & KNIGHT LLP
BOWDOIN & EDWARDS, P.A. 400 NORTH ASHLEY DRIVE
255 SOUTH ORANGE AVENUE SUITE 2300
SUITE 800 TAMPA, FLORIDA 33602-4300
ORLANDO, FLORIDA 32801 (813) 227-8500
(407) 843-7300 FACSIMILE (813) 229-0134
FACSIMILE (407) 843-2448
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT
TO SAID SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION. DATED JANUARY 7, 1998
PROSPECTUS
1,000,000 SHARES
TARPON COAST BANCORP, INC.
(a holding company for Tarpon Coast National Bank, National Association)
Common Stock
All of the shares of common stock, par value $.01 per share (the "Common
Stock"), offered hereby are being sold by Tarpon Coast Bancorp, Inc. (the
"Company"), a Florida corporation and a proposed bank holding company organized
to own all of the common stock of Tarpon Coast National Bank, a national bank
association (in organization) to be located in Port Charlotte, Florida (the
"Bank"). Neither the Company nor the Bank has ever conducted any business
operations other than matters related to their initial organization and the
raising of capital. See "Business." There has been no public trading market for
the Common Stock. The Underwriter has advised the Company that it anticipates
making a market in the Common Stock following completion of this offering. See
"Underwriting" for a discussion of the factors considered in determining the
initial offering price. The Company expects that quotations for the Common Stock
will be reported on the OTC Bulletin Board under the symbol "____." Unless
otherwise waived by the Underwriter, shares of Common Stock will be sold only in
minimum lots of 250 shares ($2,500) and any one investor (together with the
investor's affiliates) will be permitted to purchase a maximum of 50,000 shares
($500,000).
THE COMMON STOCK OFFERED BY THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK.
INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFERING UNLESS THEY CAN AFFORD TO
LOSE THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" ON PAGE _.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMIS-
SION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Underwriting Discounts and
Price to Public Commissions (1)(2) Proceeds to Company (3)
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Per Share $10.00 $0.825 $9.175
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Total (4) $10,000,000 $825,000 $9,175,000
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(1) The Underwriter has agreed with the Company that there will be no
Underwriting Discounts and Commissions for sales to certain investors
identified to the Underwriter by the Company. See "Underwriting."
(2) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting estimated offering expenses payable by the Company of
$140,135, which amount does not include certain organizational expenses
which were $99,855 as of August 31, 1997, and which will continue to be
incurred until the Bank commences operations.
(4) The Company has granted the Underwriter a 30-day option to purchase up to
150,000 additional shares of its Common Stock solely to cover
over-allotments, if any. If the Underwriter exercises such option in full,
the total Price to Public, Underwriters Discounts and Commissions and
Proceeds to the Company will be $11,500,000, $948,750 and $10,551,250,
respectively.
The shares of Common Stock are offered by the Underwriter, subject to
prior sale, when, as and if delivered to and accepted by it, and subject to the
right of the Underwriter to withdraw, cancel or modify such offer and to reject
orders in whole or in part. It is expected that delivery of the certificates
representing shares of Common Stock will be made on or about _________ through
The Depository Trust Company or at the offices of Robert W. Baird & Co.
Incorporated, Milwaukee, Wisconsin.
ROBERT W. BAIRD & CO.
INCORPORATED
THE DATE OF THIS PROSPECTUS IS ______________________.
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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 State.
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[INSERT A MAP DEPICTING THE PROPOSED BANK'S PRIMARY MARKET AREA AND SITE OF ITS
MAIN OFFICE TOGETHER WITH A PROXIMITY MAP OF THE SOUTHERN PORTION OF FLORIDA
HIGHLIGHTING THE COUNTIES COMPRISING ITS EXTENDED MARKET AREA.]
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, ANY
OTHER GOVERNMENTAL AGENCY OR OTHERWISE.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK OF
THE COMPANY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT-COVERING TRANSACTIONS, AND PENALTY BIDS. ANY OF THE FOREGOING
TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME WITHOUT NOTICE. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
AVAILABLE INFORMATION
The Company is not currently a reporting company pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), but will file
the reports required to be filed thereunder for the Company's 1997 fiscal year
and for any other periods for which the Exchange Act's requirements apply to the
Company. The Company, which will use a December 31 fiscal year end, intends to
furnish its stockholders with annual reports containing audited financial
information and, for the first three quarters of each fiscal year, quarterly
reports containing unaudited financial information.
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PROSPECTUS SUMMARY
The following Summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context clearly suggests otherwise, references in this Prospectus to
the Company include the Bank. Except as otherwise indicated, all information in
this Prospectus assumes no exercise of the Underwriter's over-allotment options.
THE COMPANY
The Company is a proposed bank holding company organized in August, 1997
under Florida law to own all of the common stock of the Bank. The Bank is
organized as a national banking association with depository accounts to be
insured by the Federal Deposit Insurance Corporation (the "FDIC") to the extent
permitted by law. The Bank intends to offer a full range of commercial and
consumer banking services primarily in the communities of Port Charlotte and
Punta Gorda, Charlotte County; and North Port, Sarasota County, Florida as well
as the surrounding extended market in Charlotte and Sarasota Counties. The
Company and the Bank have filed applications with all necessary bank regulatory
agencies, and assuming timely approval of the applications and the successful
completion of this offering, currently anticipate commencing business in the
first quarter of 1998. On December 11, 1997, the Office of the Comptroller of
the Currency (the "OCC") approved the Bank's charter application, subject to
certain terms and conditions specified in such approval ("OCC Preliminary
Approval"). The Company currently maintains its offices at 4055 Tamiami Trail,
Suite A-6, Port Charlotte, Florida 33952. The Company has entered into a
contract to purchase the real estate on which it will construct its main
facility. Upon completion of this facility, the Bank's address will be 1490
Tamiami Trail, Port Charlotte, Florida 33948. The Company's phone number is
(941) 625-1744.
STRATEGY
The objective of the Bank's organizers and management is to create a
customer-driven financial institution focused on providing high value to clients
by delivering products and services matched directly to their needs. Management
of the Company believes that such a bank can attract those clients who prefer to
conduct business with a locally-managed institution that demonstrates an active
interest in their business and personal affairs.
With an experienced staff expected to provide a superior level of
personalized service, management believes it will be able to generate
competitively priced loans and deposits. The Company anticipates that this
experienced staff will have access to current data processing systems selected
to deliver high-quality products and provide responsive service to clients. The
Company anticipates the Bank will enter into agreements with third-party service
providers to provide customers with convenient electronic access to their
accounts and other bank products through debit cards, voice response and home
banking. The use of third-party service providers is intended to allow the Bank
to utilize current technology while minimizing the costs of delivery. This "high
touch-high tech" manner of operations is expected by management to be appealing
to clients who have been receiving banking services in the depersonalized
environment of the Bank's larger competitors. See "Business - Business
Strategy."
MARKET AREA
The Bank anticipates that the primary market area ("PMA") for its banking
services will be the northern part of Charlotte County, Florida (including the
communities of Port Charlotte and Punta Gorda) and the southeastern part of
Sarasota County, Florida (including the community of North Port). The Bank
anticipates that its extended market area ("Extended Market Area") will
encompass all of Charlotte and Sarasota Counties. The Bank's main office will be
located in Port Charlotte, Florida, which is bordered by the communities of
Punta Gorda and North Port, all of which surround Charlotte Harbor on the
southwest Florida coastline. According to the Charlotte County Chamber
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of Commerce, Inc. Statistical Prospectus, the U.S. Department of Commerce rated
the Punta Gorda Metropolitan Statistical Area ("MSA"), of which Port Charlotte
is a part, the "#1 Fastest growing metropolitan employment area in the United
States" for the period from 1993 through 2005. Punta Gorda has also been ranked
by Money Magazine as one of the top five places to live in the United States in
each of the last two years, ranking second in 1996 and fourth in 1997, and in
each case, number one in the Southern United States. For the period from 1990
through 1996, the rate of growth in each of Port Charlotte, Punta Gorda, and
North Port exceeded 15%.
The area's business economy is represented by the construction, real
estate, retail trade, business and personal services, tourism, health care,
government, and agriculture industries. Major employers include Charlotte
Regional Medical Center, Fawcett Memorial Hospital and St. Joseph Hospital, in
health services; WalMart, K-Mart, Target, Home Depot, Toys-R-US and Sears, among
others in the retail sector; and, Charlotte County Schools, Charlotte County
Government, and the cities of Punta Gorda and North Port in the public sector.
COMPETITION
The banking industry in the Bank's market area has experienced significant
consolidation in recent years principally as the result of the liberalization of
interstate banking and branching laws. Many of the area's former community banks
have been acquired by large regional organizations headquartered outside of the
Bank's market area. This consolidation has resulted in the repricing of products
and services, the elimination of local boards of directors, and changes in
management and branch personnel and, in the perception of the Company's
organizers, a decline in the level of customer service. Because of the recent
changes in interstate banking regulations, this type of consolidation is
expected to continue.
Management believes that this competitive situation, when coupled with the
area's household stability and growing economic business base, creates a
favorable opportunity for a new commercial bank. Management's experience
indicates that a locally-managed community bank can attract customers by
providing highly professional personalized attention, responding in a timely
manner to product and service requests and exhibiting an active interest in
customers' business and personal financial needs. Assuming the closing of a
pending acquisition, the Company expects the Bank will be the only independent
commercial bank headquartered in the PMA.
BANK PREMISES
The Company has entered into a real estate purchase contract to acquire
approximately 1.1 acres of commercially zoned land on which it will construct
its main banking facility. The site is located at the intersection of U.S.
Highway 41 and Murdock Circle, a major intersection in Charlotte County. The
surrounding area is composed of mixed use commercial and industrial properties
(including the regional Town Center Mall and the Port Charlotte Industrial Park)
and within one-half mile of the center of the area's residential development.
The banking facility is anticipated to consist of approximately 7,800
square feet of office space and a community meeting room/ board room. The
facility would have five inside teller stations, three customer service platform
stations, three drive through lanes and a drive up ATM lane. It is anticipated
that the land acquisition cost will be approximately $875,000; building
construction costs and improvements will be approximately $984,000; and the
costs to equip and furnish the facility will be approximately $278,000. It is
anticipated that the Bank will begin occupancy of the facility during the fourth
quarter of 1998.
The Bank expects to commence its operations in the first quarter of 1998
in a leased temporary modular facility to be located on the Bank's permanent
site during the period of construction of the Bank's permanent facility. The
temporary facility will consist of approximately 1,960 square feet and will
include a drive-up window. The rental
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costs, including equipment, will be approximately $4,500 per month. Site work
necessary to accommodate the temporary facility will be approximately $44,000.
See "Business - Bank Premises."
MANAGEMENT
The Company has assembled an experienced senior management team and board
of directors with a shared vision and commitment to the success of the Bank.
Certain of the officers and directors of the Company and the Bank have
significant banking experience and familiarity with the Bank's primary service
area, having previously worked with banks serving the Southwest Florida
community. Lewis S. Albert, Chairman and Chief Executive Officer of the Company
and the Bank, has 20 years of experience serving the banking industry both in
executive management capacities and as a service professional. Mr. Albert most
recently served as Senior Vice President & Chief Financial Officer of Southwest
Banks, Inc., a multi-bank holding company headquartered in Southwest Florida
which grew from approximately $150 million in assets to over $500 million in
assets during his four year tenure until its sale to F.N.B. Corporation in 1997.
Mr. Albert was previously a partner with Deloitte & Touche, an international
public accounting and consulting firm, during which time his emphasis was
providing audit, tax and consulting services to the financial institutions
industry; including assisting in the organization a number of community banks on
behalf of his clients. Todd H. Katz, Vice Chairman, President and General
Counsel of the Company and the Bank, recently served as General Counsel and
managed the Shareholder Relations Department at Southwest Banks, Inc.
Previously, he served as outside counsel to financial institutions through his
association with Miller, Hamilton, Snider & Odom, a regional banking law firm
based in Mobile, Alabama. The Company also intends to hire two additional
experienced individuals to serve as Senior Vice Presidents of the Bank. One such
individual will serve as the Bank's Senior Lending Officer and have experience
in that capacity within the Bank's market area. The second such individual will
serve as the Bank's Senior Operations Officer and have experience in that
capacity with community banks in the Southwest Florida area. The Company's
directors believe that the many years of experience and existing contacts of the
senior officers offer the Bank a substantial opportunity to attract new
relationships for the Bank.
The remaining directors are business people that have lived in the
Charlotte County area for many years or have otherwise had significant business
interests in the community and have developed a number of business and personal
relationships which they believe will add to the success of the Company and the
Bank. The Company's directors believe that their long-standing ties to the
community, coupled with their combined business and banking experience, provide
them with the unique perspective of the area's needs and the desire for a new
independent bank under local control. They further believe that the community
will react favorably to this new enterprise.
3
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THE OFFERING
Securities offered........... 1,000,000 shares of Common Stock
Minimum purchase........ 250 shares ($2,500)
Maximum purchase....... 50,000 shares ($500,000)
Common Stock to be
outstanding after this
offering........................ 1,000,000 shares
Use of proceeds by the
Company..................... The net proceeds to the Company from this offering (assuming
no exercise of the over-allotment option) are estimated to be
$9,034,865. The Company will contribute $7.5 million of the
net proceeds of this offering to the Bank to capitalize the Bank
by purchasing all of the Bank's common stock to be issued.
The Bank will use approximately $875,000 to purchase real
estate for its main banking facility site, approximately $984,000
for the construction of its main office including land
improvements, and approximately $278,000 to purchase
furniture, fixtures and equipment and other necessary assets for
the Bank's operations. The organizers of the Company have
advanced approximately $366,000 to the Company to cover
expenses of organizing the Bank. Under the terms of these
advances, on or about the closing of the offering, the organizers
will receive shares of Common Stock at the Price to Public to
repay such advances. The Company's organizers also have
indicated their present intention to purchase Common Stock in
this offering. It is currently anticipated that the balance of the
net proceeds by the Bank will be used to fund investments in
loans and securities and for the payment of operating expenses.
The remaining net proceeds (plus any net proceeds as a result
of the exercise of the Underwriter's over-allotment option) will
initially be invested by the Company in an overnight repurchase
agreement with the Bank secured by U.S. Treasury and Agency
issues and otherwise held by the Company as working capital
for general corporate purposes and to pay operating expenses,
as well as for possible future capital contributions to the Bank.
See "Use of Proceeds."
Risk factors................... The purchase of the securities offered hereby involves a high
degree of risk and should be considered only by persons who
can afford to sustain the total loss of their investment. See
"Risk Factors."
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SUMMARY FINANCIAL DATA
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AUGUST 31, 1997
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ACTUAL AS ADJUSTED (1)
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BALANCE SHEET DATA:
Cash.......................................... $ 179,874 $8,890,974
Total assets.................................. $ 224,910 $8,936,010
Total liabilities............................. $ 323,765 $ -0-
Shareholders' equity (deficit)................ $ (98,855) $8,936,010
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(1) Adjusted to reflect the application of the estimated net proceeds from the
shares offered hereby. See "Use of Proceeds."
5
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RISK FACTORS
The Common Stock offered hereby is speculative, involves a high degree
of risk and should be considered only by persons who can afford the loss of
their entire investment. The following constitute some of the potential risks of
an investment in the Common Stock and should be carefully considered by
prospective investors prior to purchasing shares of Common Stock. The order of
the following is not intended to be indicative of the relative importance of any
described risk nor is the following intended to be inclusive of all risks of an
investment in the Common Stock. Because the Company is only recently formed and
the Bank will only obtain the necessary regulatory approvals in the future but
will not have commenced banking operations as of the date hereof, prospective
investors do not have access to all of the information that, in assessing their
proposed investment, is available to the purchasers of securities of a financial
institution with a history of operations. The Company's profitability will
depend primarily upon the Bank's operations and there is no assurance that the
Bank will ever operate profitably.
LACK OF OPERATING HISTORY; SIGNIFICANT INITIAL LOSSES EXPECTED
Neither the Company nor the Bank has any operating history. The business
of the Company and the Bank is subject to the risks inherent in the
establishment of a new business enterprise. Because the Company is only recently
formed, the Company and the Bank have only recently applied for the necessary
regulatory approvals and the Bank has not commenced banking operations as of the
date hereof, prospective investors do not have access to all of the information
that, in assessing their proposed investment, is available to the purchasers of
securities of a financial institution with a history of operations. The
Company's profitability will depend primarily upon the Bank's operations and
there is no assurance that the Bank will ever operate profitably. As a result of
the substantial start-up expenditures that must be incurred by a new bank, the
Company can be expected to incur significant operating losses during its initial
years of operations.
FAILURE TO COMMENCE OPERATIONS
Although the Company and the Bank expect to commence operations in its
leased temporary modular facility in the first quarter of 1998, there can be no
assurance as to when, if at all, this will occur. As of August 31, 1997, the
Company's accumulated deficit was $99,855 ($153,411 as of November 30, 1997),
and the Company will continue to incur pre-opening expenses until the Bank
commences operations. Any delay in commencing operations will increase
pre-opening expenses and postpone realization by the Bank of potential revenues
and income. Absent the commencement of profitable operations, the Company's
accumulated deficit will continue to increase (and book value per share
decrease) as operating expenses such as rent on the Bank's proposed premises,
salaries and other administrative expenses continue to be incurred. After the
offering and prior to the time the Bank receives final approvals from the OCC
and the FDIC to commence banking operations, the proceeds from this offering
will be segregated, but will be available for certain organizational and
pre-opening expenses of the Company and the Bank. Although certain proceeds from
this offering may be segregated, these proceeds may still be subject to claims
of creditors of the Bank or the Company (including the claims of organizers who
have advanced proceeds to the Company in connection with the organization of the
Company and the Bank). On a liquidation basis, the Company is unlikely to
recover its full investment in furniture, fixtures and equipment. As a result,
if a liquidation of the Company were to occur, investors in this offering would
likely realize substantially less than the $10 per share public offering price
and would suffer a significant loss.
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POSSIBLE LOSS OF A PORTION OF INVESTMENT
If the Company satisfies the offering conditions and issues the shares of
Common Stock, but final approval to commence banking operations is not granted
within 18 months after the receipt of OCC Preliminary Approval, the Company will
solicit shareholder approval for its dissolution and liquidation in which event,
the Company will return to shareholders their investment, less all expenses
incurred by the Company, including the expenses of the offering, the
organizational and pre-opening expenses of the Company and the Bank and claims
of creditors (including the claims of organizers who have advanced proceeds to
the Company in connection with the organization of the Company and the Bank). In
the event of dissolution and liquidation following the issuance of shares of
Common Stock, it is possible that shareholders will receive only a portion of
their investment due to the foregoing expenses.
REGULATORY APPROVALS
Although the Company and the Bank have applied for all regulatory
approvals required to commence operations (and have received OCC Preliminary
Approval), no assurances can be given that such required final approvals will be
granted in a timely manner if at all. The closing of this offering is not
conditioned upon the Company and the Bank receiving final approval to commence
business; however the closing will not take place until the Company and the Bank
have received preliminary approval. Management believes that all such regulatory
approvals will be obtained after a reasonable period, subject to the
satisfaction of certain conditions. Such conditions may include, among other
things that: (i) beginning paid-in capital of the Bank be not less than $7.5
million; (ii) the Tier 1 capital-to-total-assets ratio of the Bank be not less
than 8.0% for the first three years of operations; (iii) without the prior
approval of the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), no debt will be incurred by the Company for five years from the
date the Company acquires 100% of the Bank stock; (iv) there is no major
deviation from the operating plan submitted to the OCC with the application for
OCC Preliminary Approval; and (v) the OCC receives acceptable background checks
on Company directors and officers. The Company proposes to satisfy the Bank's
capital requirements by using $7.5 million of the proceeds from this offering to
purchase all of the capital stock of the Bank. See "Use of Proceeds." While the
organizers currently anticipate receiving bank and bank holding company
approvals during the first quarter of 1998, no assurance can be given that these
approvals will be granted in a timely manner, if at all. If such regulatory
approvals are substantially delayed, the Company's accumulated deficit will
continue to increase. If such regulatory approvals are not obtained, the Company
would not be able to commence its banking activities and would probably be
liquidated and dissolved. Upon liquidation, investors would likely realize a
substantial loss on their investment. See " Failure to Commence Operations."
COMPETITION
The Company and the Bank will face strong competition for deposits, loans
and other financial services from numerous Florida and out-of-state banks,
thrifts, credit unions and other financial institutions as well as other
entities which provide financial services. Some of the financial institutions
and financial services organizations with which the Bank will compete are not
subject to the same degree of regulation as the Bank. As of June, 1997,
approximately 24 branch bank offices, five thrift offices and one credit union
office were located within the PMA. See "Business General" and "Business -
Market Area". Many of these financial institutions aggressively compete for
business in the PMA. Most of these competitors have been in business for many
years, have established customer bases, are larger, have substantially higher
lending limits than the Bank and will be able to offer certain services,
including multiple branches and international banking services, that the Bank
can offer only through correspondents, if at all. In addition, most of these
entities have greater capital resources than the Bank, which, among other
things, may allow them to price their services at levels more favorable to the
customer and to provide larger credit facilities than could the Bank. See
"Business - Market Area" and "Business - Competition." Additionally, recently
enacted federal and Florida legislation regarding interstate branching and
banking may act to increase competition in the future from larger out-of-state
banks. See "Supervision and Regulation - Recent Regulatory Developments."
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NEED FOR CAPITAL
Although the Company does not currently anticipate the need for additional
capital in the next 12 months to commence its planned business activities,
additional capital beyond that which will be provided by this offering and any
amounts likely to be generated by the Bank's operations over the next four years
would probably be necessary before the Company could undertake any significant
acquisitions or other expansion of its operations. There can be no assurance
that any funds necessary to finance such acquisitions or expansion will be
available. Regulatory capital requirements and borrowing restrictions which will
apply to the Bank and the Company may have the effect of constraining future
growth. To the extent the Company relies upon the sale of additional equity
securities to finance future expansion, such sale could result in significant
dilution to the interests of investors purchasing shares in this offering.
GOVERNMENT REGULATION AND MONETARY POLICY
The Company and the Bank will be subject to extensive federal and state
government supervision and regulation. Existing federal and state banking laws
will subject the Bank to substantial limitations with respect to loans, purchase
of securities, payment of dividends and many other aspects of its banking
business. There can be no assurance that future legislation or government policy
will not adversely affect the banking industry or the operations of the Bank.
Federal economic and monetary policy may affect the Bank's ability to attract
deposits, make loans and achieve satisfactory interest spreads. See "Supervision
and Regulation."
DEPENDENCE ON MANAGEMENT
The Company and the Bank are, and for the foreseeable future will be,
dependent upon the services of Lewis S. Albert, the Chairman of the Board and
Chief Executive Officer of the Company and the Bank, and Todd H. Katz, Vice
Chairman, President and General Counsel of the Company and the Bank, as well as
other senior managers retained by the Company and the Bank. The loss of any of
these individuals could adversely affect the operations of the Company and the
Bank. The Company has entered into an employment agreements with Mr. Albert and
Mr. Katz, in an effort to assure the continued availability of their services to
the Bank and the Company, although these individuals are not precluded from
competing with the Bank upon termination of their employment with the Bank. In
light of the Company's dependence upon the banking expertise of its chief
executive officer and president, the Company has obtained a policy of key person
life insurance on both Mr. Albert and Mr. Katz in the amount of $500,000 each
payable to the Company, although there is no assurance such amount will
adequately compensate the Company for the loss of service of either or both
individuals. See "Business - Employees" and "Management."
LENDING RISKS AND LENDING LIMITS
The risk of nonpayment of loans is inherent in commercial banking, and
such nonpayment, if it occurs, may have a material adverse effect on the
Company's earnings and overall financial condition as well as the value of the
Common Stock. Moreover, the Bank expects to focus on small-to-medium sized
businesses, which may result in a larger concentration by the Bank of loans to
such businesses. As a result, the Bank may assume greater lending risks than
banks which have a lesser concentration of such loans and tend to make loans to
larger companies. Management will attempt to minimize the Bank's credit exposure
by carefully monitoring the concentration of its loans within specific
industries and through prudent loan application and approval procedures, but
there can be no assurance that such monitoring and procedures will reduce such
lending risks.
Based upon capitalization of $7.5 million, the Bank will be subject to a
limit of $1,125,000 in loans that it may make to any one borrower. The Board of
Directors will establish an "in-house" limit that will be somewhat lower
8
<PAGE> 13
than the Bank's legal lending limit. The Board may from time to time raise or
lower the "in-house" limit as it deems appropriate to comply with safe and sound
banking practices and respond to overall economic conditions. Accordingly, the
size of the loans which the Bank can offer to potential customers is less than
the size of loans that most of the Bank's competitors are able to offer.
Initially, this limit may adversely affect the ability of the Bank to seek
relationships with the area's larger businesses. The Bank expects to accommodate
loan volumes in excess of its lending limit through the sale of participations
in such loans to other banks. However, there can be no assurance that the Bank
will be successful in attracting or maintaining customers seeking larger loans
or that the Bank will be able to engage in the sale of participations in such
loans on terms favorable to the Bank.
The business economy of the Bank's PMA is represented primarily by the
retail trade, construction and real estate, entertainment services, finance and
insurance, health care, and agribusiness industries. The Bank may experience
concentrations of credit extended to one or more of these industry groups.
Adverse conditions in any one or more of the industries operating in the Bank's
PMA or a slowdown in general economic conditions could have an adverse effect on
the Bank, including on its ability to originate and collect loans. See "Business
- - Market Area."
IMPACT OF INTEREST RATES AND ECONOMIC CONDITIONS
The results of operations for financial institutions, including the Bank,
may be materially and adversely affected by changes in prevailing economic
conditions, including declines in real estate market values, rapid changes in
interest rates and the monetary and fiscal policies of the federal government.
See "Supervision and Regulation - General" and "Supervision and Regulation -
Recent Regulatory Developments." The Bank's profitability is in part a function
of the spread between the interest rates earned on investments and loans and the
interest rates paid on deposits and other interest-bearing liabilities. In the
early 1990s, many banking organizations experienced historically high interest
rate spreads. More recently, interest rate spreads have generally narrowed due
to changing market conditions and competitive pricing pressure, and there can be
no assurance that such factors will not continue to exert such pressure or that
such high interest rate spreads will return. Substantially all the Bank's loans
will be to businesses and individuals in the Southwest Florida area and any
decline in the economy of this area could have an adverse impact on the Bank.
Like most banking institutions, the Bank's net interest spread and margin will
be affected by general economic conditions and other factors that influence
market interest rates and the Bank's ability to respond to changes in such
rates. At any given time, the Bank's assets and liabilities will be such that
they are affected differently by a given change in interest rates. As a result,
an increase or decrease in rates, the length of loan terms or the mix of
adjustable and fixed rate loans in the Bank's portfolio could have a positive or
negative effect on the Bank's net income, capital and liquidity. There can be no
assurance that the positive trends or developments discussed in this Prospectus
will continue or that negative trends or developments will not have a material
adverse effect on the Bank.
NEED FOR TECHNOLOGICAL CHANGE
The banking industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs. The Company's
future success will depend in part on its ability to address the needs of its
clients by using technology to provide products and services that will satisfy
client demands for convenience as well as to create additional efficiencies in
the Bank's operations. Many of the Bank's competitors have substantially greater
resources to invest in technological improvements. There can be no assurance
that the Bank will be able to effectively implement new technology-driven
products and services or be successful in marketing such products and services
to its clients. See "Business - Business Strategy."
9
<PAGE> 14
ANTI-TAKEOVER PROVISIONS
Under the Federal Change in Bank Control Act (the "Control Act"), a notice
must be submitted to the Federal Reserve if any natural person or, generally, a
group of natural persons acting in concert seeks to acquire 10% or more of any
class of outstanding voting securities of a bank holding company, including the
Company, unless the Federal Reserve determines that the acquisition will not
result in a change of control of the Company. Under the Control Act, the Federal
Reserve reviews the acquisition to determine if it will result in a change of
control of the Company. Under the Control Act, the Federal Reserve has sixty
days within which to act on such notice, taking into consideration certain
factors, including the financial and managerial resources of the acquirer, the
convenience and needs of the community to be served by the bank holding company
and its subsidiary banks, and the antitrust effects of the acquisition. Under
the Bank Holding Company Act of 1956, as amended (the "BHC Act"), a company
generally is required to obtain prior approval of the Federal Reserve before it
may obtain control of a bank holding company. "Control" is generally described
as the beneficial ownership of 25% or more of all outstanding voting securities
of a bank holding company, but may be as low as 5% under certain circumstances.
See "Supervision and Regulation."
Florida law contains certain provisions which may have the effect of
deterring unsolicited attempts to acquire the Company. Further, the Company's
Articles of Incorporation divide the Board of Directors into three classes with
the term of office of one class expiring each year, and also authorize the Board
of Directors to issue shares of preferred stock, with such rights as the
directors may determine upon issuance. These provisions may have the effect of
delaying or preventing a change in control of the Company without action by the
shareholders. These provisions also could result in the Company being less
attractive to a potential acquiror or result in shareholders receiving less for
their shares than otherwise might be available in the event of a change in
control of the Company. See "Description of Capital Stock - Certain
Anti-Takeover, Indemnification and Limited Liability Provisions."
NO ASSURANCE OF DIVIDENDS
It is anticipated that no dividends will be paid on the Common Stock for
the immediately foreseeable future. It is likely that the Company will be
largely dependent upon dividends paid by the Bank for funds to pay dividends on
the Common Stock, if and when such dividends are declared. The Bank does not
anticipate paying dividends during at least the first three years of its
operations. No assurance can be given that future earnings of the Bank, and any
resulting dividends to the Company, will be sufficient to permit the legal
payment of dividends to Company stockholders at any time in the future. Even if
the Company may legally declare dividends, the amount and timing of such
dividends will be at the discretion of the Company's Board of Directors. The
Board may in its sole discretion decide not to declare dividends. For a more
detailed discussion of other regulatory limitations on the payment of cash
dividends by the Company. See "Dividend Policy."
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation and Bylaws provide for the
indemnification of its officers and directors and insulate its officers and
directors from liability for certain breaches of the duty of care. It is
possible that the indemnification obligations imposed under these provisions
could result in a charge against the Company's earnings and thereby affect the
availability of funds for payment of dividends to the Company's stockholders.
The Bank's bylaws will contain similar provisions. See "Description of Common
Stock - Anti-Takeover, Indemnification and Limited Liability Provisions."
10
<PAGE> 15
DETERMINATION OF OFFERING PRICE
The initial public offering price of $10.00 per share was determined by
negotiations between the Company and Robert W. Baird & Co. Incorporated, the
underwriter of this offering (the "Underwriter"). This price is not based upon
earnings or any history of operations and should not be construed as indicative
of the present or anticipated future value of the Common Stock. See
"Underwriting."
CONTROL BY MANAGEMENT
Although the combined ownership and control over the Company's Common
Stock by the Company's officers and directors is likely to be less than 10%
after this offering, such individuals will be able to exert a significant
measure of control over the affairs and policies of the Company. Such control
could be used, for example, to help prevent an acquisition of the Company,
thereby precluding shareholders from possibly realizing any premium which may be
offered for the Company's Common Stock by a potential acquiror. See "Principal
Stockholders."
NO PRIOR PUBLIC MARKET; LIMITED TRADING MARKET EXPECTED
Prior to this offering, there has been no public trading market for the
Common Stock. The offering price of $10 per share has been determined by
negotiations between the Company and the Underwriter and may be greater than the
market price for the Common Stock following this offering. The Company expects
that the quotations for the Common Stock will be reported on the OTC Bulletin
Board under the symbol "____." The Underwriter has also advised the Company
that, upon completion of this offering, it presently intends to act as a market
maker in the Common Stock, subject to applicable laws and regulatory
requirements. Making a market in securities involves maintaining bid and ask
quotations and being able, as principal, to effect transactions in reasonable
quantities at those quoted prices, subject to various securities laws and other
regulatory requirements. The development of a public trading market depends,
however, upon the existence of willing buyers and sellers, the presence of which
is not within the control of the Company, the Bank or any market maker. Even
with a market maker, factors such as the limited size of this offering, the lack
of earnings history for the Company and the absence of a reasonable expectation
of dividends within the near future mean that there can be no assurance of the
development in the foreseeable future of an active and liquid market for the
Common Stock. Even if a market develops, there can be no assurance that a market
will continue, or that shareholders will be able to sell their shares at or
above the offering price of $10 per share. Furthermore, the Underwriter has no
obligation to make a market in the Common Stock and, if commenced, may cease
market making activities at any time. The potential size of a secondary market
for the Common Stock might, at least initially, be limited to some extent by the
requirement of a $2,500 minimum investment imposed in connection with this
offering. The minimum investment requirement may act to restrict the number of
shareholders and make subsequent trading of small numbers of shares less likely.
Purchasers of Common Stock should carefully consider the potentially illiquid
and long-term nature of their investment in the shares being offered hereby.
RECENT DEVELOPMENTS
Since August 31, 1997, the date of the Company's most recent audited
financial statements, the Company has continued to incur pre-opening expenses.
As of November 30, 1997, the Company's accumulated deficit was $153,411. The
additional expenses incurred related principally to legal and professional fees
incurred in the regulatory application process and in connection with this
offering, salaries and supplies.
11
<PAGE> 16
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,000,000 shares of
Common Stock offered hereby are estimated to be $9,034,865 ($10,411,115) if the
Underwriter's over-allotment option is exercised in full), after deduction of
the underwriting discounts and commissions and estimated offering expenses. Such
net proceeds have not been reduced by the amount of the Company's organizational
and other operating expenses which were $153,411 as of November 30, 1997. The
net proceeds of this offering will be segregated until the Bank's receipt of
final approvals from the OCC and the FDIC to commence banking operations, but
will be available for certain organizational and pre-opening expenses of the
Company and the Bank.
Approximately $7.5 million of the net proceeds of this offering will be
invested by the Company in shares of Common Stock of the Bank to provide the
Bank's initial capitalization. The Bank expects to use approximately $2,137,000
of these funds to acquire, construct, furnish and equip the permanent premises
in which it is anticipated that the Bank will be located, and approximately
$132,000 to cover occupancy expenses and necessary furniture, fixtures and
equipment expense for the Bank's temporary offices during the period of
construction of its main facility. It is currently anticipated that the
remaining amount will be used by the Bank to fund investments in loans and U.S.
government and agency securities, federal funds sold and for payment of
operating expenses.
The balance of the net proceeds of this offering, after capitalizing
the Bank with $7.5 million, is estimated to be approximately $1,534,865. A total
of approximately $366,000 has been advanced by the organizers to the Company to
cover expenses of organizing the Bank. Under the terms of these advances, the
organizers will receive repayment in full, on or about the closing of this
offering, in shares of Common Stock valued at the Price to Public. The Company's
organizers also have indicated their present intention to purchase shares of
Common Stock in this offering. See "Principal Stockholders." The remaining
amount of net proceeds (plus any net proceeds as a result of the exercise of the
Underwriter's over-allotment option) will initially be invested by the Company
in an overnight repurchase agreement with the Bank secured by U.S. Treasury and
Agency securities and otherwise will be held by the Company as working capital
for general corporate purposes as well as for possible future capital
contributions to the Bank to support asset growth. Such uses by the Company,
however, may be subject to change. The Company believes that the net proceeds of
the offering will satisfy the Company's cash requirements for at least the first
12 month period following the opening of the Bank.
The following table sets forth a tabular presentation of the use of net
proceeds to the Company:
<TABLE>
<CAPTION>
Dollar Amounts Percentage
-------------- ----------
<S> <C> <C>
Estimated net proceeds $ 9,034,865 100%
Use of net proceeds (in order of priority)
Investment in shares of Common Stock
of the Bank $ 7,500,000 83%
Working capital/potential contributions
to the Bank $ 1,534,865 17%
Estimated net proceeds-
if over-allotment option is
exercised in full $10,411,115 100%
Use of net proceeds (in order of priority)
Investment in shares of Common Stock
of the Bank $ 7,500,000 72%
Working capital/potential contributions
to the Bank $ 2,911,115 28%
</TABLE>
DIVIDEND POLICY
The Company initially expects that all Company and Bank earnings, if any,
will be retained to finance the growth of the Company and the Bank and that no
cash dividends will be paid for the foreseeable future. If and when dividends
are declared, the Company will probably be largely dependent upon dividends paid
by the Bank for funds to pay dividends on the Common Stock. It is also possible,
however, that the Company will pay dividends in the future generated from
investment income and other activities of the Company. Under Federal regulation,
the Bank will be restricted as to the maximum amount of dividends it may pay on
its common stock. Moreover, the approval of the OCC is required for the payment
of any dividend if the aggregate amount of all dividends paid by the Bank during
such calendar year would exceed the sum of: (i) the total net profits of the
Bank for that year; and (ii) the retained net profits of the Bank for the
previous two years less any required transfer to surplus. The OCC and the FDIC
are also authorized under certain circumstances to prohibit the payment of
dividends by the Bank. Under federal law and Federal Reserve policy, a bank
holding company is required to serve as a source of financial strength to its
subsidiary bank and to commit resources to support the bank. Consistent with
this requirement the Federal Reserve has stated that, as a matter of prudent
banking, a bank holding company generally should not pay cash dividends unless
the available net income of the bank holding company is sufficient to fully fund
the dividends, and the prospective rate of earnings retention appears to be
consistent with the company's needs, asset quality and overall financial
condition.
12
<PAGE> 17
For additional information regarding restrictions on payment of dividends, see
"Supervision and Regulation - Dividends."
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
November 30, 1997, and as adjusted to reflect the sale of the shares of Common
Stock offered hereby:
<TABLE>
<CAPTION>
November 30, 1997
-----------------------------
Actual As Adjusted
------------ -----------
<S> <C> <C>
Long-term and short-term debt....................................................$ 374,791 $ -0-
============ ===========
Stockholders' equity:
Preferred Stock; no stated par; 2,000,000 shares authorized; no shares
issued or outstanding......................................................
Common Stock; $.01 par value, 10,000,000 shares authorized; 100 shares
issued and outstanding (1,000,000 shares as adjusted) (1).................. 1 10,000
Additional paid-in capital....................................................... 999 9,025,865
Accumulated deficit (2).......................................................... (153,411) (153,411)
------------ -----------
Total stockholders' equity.......................................................$ (152,411) $8,882,454
============ ===========
</TABLE>
(1) Does not include 60,000 shares of Common Stock issuable upon exercise of
outstanding options under the Company's incentive stock option plan and
96,443 shares of Common Stock issuable under certain warrants granted to
the Company's organizers. See "Management - Incentive Stock Option Plan"
and "Management - Organizers' Warrants."
(2) The accumulated deficit as of November 30, 1997, is comprised primarily of
pre-opening expenses related principally to legal and professional fees
incurred in the regulatory application process, creation of the holding
company, office occupancy costs and supplies. In addition, Lewis S. Albert
and Todd H. Katz have been receiving consulting fees from the Company
since June 15, 1997. The accumulated deficit will continue to increase
prior to the Bank's commencement of operations, and will then increase
further as expected initial operating losses are incurred. Additional
employees will be hired prior to the opening of the Bank and further
salary expenses and training costs will be incurred at such time.
Additional professional fees will also be incurred in connection with this
offering and other corporate matters.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
The Company is still in a development stage and will remain in that stage
until the offering of the Company's Common Stock is completed and the Bank
commences operations. The Company has funded its start-up and organization
costs through $366,000 in advances from the organizers to the Company. Under
the terms of these advances, the organizers will receive repayment in full on or
about the closing of this offering, in shares of Common Stock valued at the
Price to Public. The net proceeds of the offering will be segregated until the
Bank's receipt of final approvals from the OCC and the FDIC to commence banking
operations, but will be available for certain organizational and pre-opening
expenses of the Company and the Bank. The Company believes that the net
proceeds of the offering will satisfy the Company's cash requirements for at
least the first 12 month period following the opening of the Bank. Accordingly,
the Company does not anticipate that it will be necessary to raise additional
funds for the operation of the Company and the Bank over the next twelve months.
For additional information regarding material expenditures during such period,
see "Use of Proceeds." For information regarding the increase in Company
employees following the opening of the Bank, see "Business - Employees." For
additional information regarding the plan of operations for the Company and the
Bank see "Business" and "Management."
BUSINESS
GENERAL
The Company was incorporated under the laws of the State of Florida on
August 7, 1997 under the name Gulf Coast Bancorp, Inc. and changed its name to
Tarpon Coast Bancorp., Inc. on December 23, 1997. The Company was formed to own
all of the common stock of the Bank and to engage in the business of a bank
holding company under the BHC Act. The Bank is organizing as a national banking
association with depository accounts to be insured by the FDIC to the extent
permitted by law. The Bank intends to offer a full range of commercial and
consumer banking services primarily within the Bank's designated PMA. The PMA
includes the northern part of Charlotte County, Florida (including the
communities of Port Charlotte and Punta Gorda) and the southeastern part of
Sarasota County (including the community of North Port). The Bank's Extended
Market Area encompasses all of Charlotte
13
<PAGE> 18
and Sarasota Counties. The Company and the Bank have applied for all necessary
regulatory approvals. Assuming such regulatory approvals are received and the
successful completion of this offering, the Company and the Bank anticipate
commencing business in a leased temporary modular facility in the first quarter
of 1998 to be located in Port Charlotte. On December 11, 1997, the Bank received
OCC Preliminary Approval. This date is only an estimate and is subject to many
factors inherent in the regulatory approval process. The Bank intends to
commence business as soon as reasonably possible upon completion of the offering
and satisfaction of conditions to which certain of its regulatory approvals is
subject. See "Risk Factors - Governmental Regulation and Monetary Policy". The
Company currently maintains its offices at 4055 Tamiami Trail, Suite A-6, Port
Charlotte, Florida 33952. Upon completion of the Bank's facility, the address
will be 1490 Tamiami Trail, Port Charlotte, Florida 33948. The Company's
telephone number is (941) 625-1744.
BACKGROUND
The liberalization of Federal and State of Florida interstate banking
laws in recent years has led to substantial consolidation of the banking
industry in Florida and the Southwest Florida area. Since the early 1980s,
several of the area's locally owned or locally managed financial institutions
have been acquired by large regional bank holding companies. Members of the
Board, all of whom have been participants or observers of the local banking
scene for many years, have noticed the need for a locally owned, highly
service-oriented banking organization to fill a void created by this
consolidation in the banking industry. Specifically, the Board believes that the
area could greatly benefit from a financial institution whose focus would be to
serve the business and personal banking needs of local entrepreneurs and local
business owners. The Board also believes that this niche is currently being
under-served by other banks.
In the opinion of the Company's management, this situation has created a
favorable opportunity for a new commercial bank with headquarters in the Port
Charlotte area. Management of the Company believes that such a bank can attract
those clients who prefer to conduct business with a locally-managed institution
that demonstrates an active interest in their businesses and personal financial
affairs. The Company believes that a locally managed institution will be better
able to deliver more timely responses to client requests, provide customized
financial products or services addressing out-of-the-ordinary matters and offer
the personal attention of senior banking officers. The Bank will seek to take
advantage of this opportunity by emphasizing in its marketing plan the Bank's
local management and the Bank's ties and commitment to the local community.
The Company and the Bank to date have conducted no business other than
matters incidental to their organization, including negotiations with additional
prospective executive officers. Following completion of this offering and before
commencement of operations, the Bank intends to occupy and furnish its temporary
office, hire and train staff, purchase or lease and install equipment necessary
to transact business, establish correspondent banking relationships and make
other arrangements for necessary services
BUSINESS STRATEGY
The Bank intends to concentrate on the financial services needs of
individuals and local businesses. A cornerstone of the Bank's business strategy
will be to emphasize the Bank's local management and its commitment to the
Bank's market area. Lewis S. Albert, the Chairman of the Board and Chief
Executive Officer of the Company and the Bank, has 20 years of experience
serving the banking industry both in executive management capacities and as a
service professional. Mr. Albert most recently served as Senior Vice President
and Chief Financial Officer of Southwest Banks, Inc. a community multi-bank
holding company headquartered in Southwest Florida until its acquisition by
F.N.B. Corporation in 1997. Todd H. Katz, Vice Chairman, President and General
Counsel of the Company and the Bank, recently served as General Counsel and
managed the Shareholder Relations Department at Southwest Banks,
14
<PAGE> 19
Inc. The directors of the Company believe that the officers of the Company
represent a range of business, banking and investment knowledge and expertise.
The Company directors believe that the years of experience and existing contacts
of the senior officers offer the Bank a substantial opportunity to attract new
relationships for the Bank.
In addition, the Company intends to hire two additional experienced
individuals to serve as Senior Vice Presidents of the Bank. One such individual
will serve as the Bank's Senior Lending Officer and has experience in that
capacity within the Bank's market area. The second such individual will serve as
the Bank's Senior Operations Officer and have experience in that capacity with
community banks in the Southwest Florida area.
The Bank intends to encourage its employees to be active in the civic,
charitable and social organizations located in the local communities. Most of
the Company's directors currently hold, and have held in the past, leadership
positions in a number of community organizations, and intend to continue this
active involvement in future years. Other members of the management team will
also be encouraged to volunteer for such positions.
The Company's goal is to create a "customer-driven" organization focused
on providing high value to clients by promptly delivering products and services
matched directly to their needs. The Bank will strive to establish a high
standard of quality in each service it provides and the employees of the Bank
will be expected to emphasize service in their dealings with clients. Because
the Bank intends to commence operations with a staff of fewer than 15 full time
employees, these employees will need to be flexible in the duties they perform
in an effort to satisfy clients. However, management believes that the use of
current technology will permit each employee to devote more time and attention
to personal service, respond more quickly to a client's requests and deliver
services in the most timely manner possible. Management expects this "high
touch-high tech" manner of operations to be appealing to clients.
Upon its opening, the Bank is planning to undertake a marketing campaign
utilizing an officer calling program and community-based promotions. The
campaign will emphasize the Bank's independence, local management and special
focus on client service. All employees will be expected to actively market the
Bank's services.
The Bank's initial legal lending limit will be approximately $1,125,000.
The Board of Directors will establish an "in-house" limit that will be somewhat
lower than the Bank's legal lending limit. The Board may from time to time raise
or lower the "in-house" limit as it deems appropriate to comply with safe and
sound banking practices and respond to overall economic conditions. Initially,
this limit will affect to a degree the ability of the Bank to seek relationships
with the area's larger businesses. However, in light of senior management's
previous experience and the relationships with a number of the region's other
financial institutions, the Bank may originate loan volumes in excess of its
lending limit and sell participations in such loans to other banks. Likewise, it
is quite possible that the Bank will purchase participations from other area
institutions. See "Risk Factors - Lending Risks and Lending Limits".
PRODUCTS AND SERVICES
It is anticipated that the Bank's hours of operation will initially be
8:30 a.m. to 6:00 p.m., Monday through Friday and from 8:30 to 12:30 on
Saturday. In addition, the Bank's employees will be available to clients wishing
to make appointments outside traditional banking hours, either at the Bank or at
the clients' homes or businesses. By providing "appointment banking," the Bank
intends to demonstrate its high level of responsiveness and service to its
clients.
The Bank intends to offer a range of deposit services, including checking
accounts, NOW accounts, savings accounts and time deposits of various types. The
transaction accounts and time certificates will be tailored to the principal
market area at rates competitive with those offered in the area. All deposit
accounts will be insured by the
15
<PAGE> 20
FDIC up to the maximum amount permitted by law. The Bank intends to solicit
these accounts from individuals, businesses, associations, organizations,
financial institutions and government authorities. It does not intend to accept
brokered deposits. The Bank may also use alternative funding sources as needed,
including advances from Federal Home Loan Banks, conduit financing and the
packaging of loans for securitization and sale.
The Bank will offer a range of short to intermediate term personal and
commercial loans. The Bank intends to make personal loans directly to
individuals for various purposes, including purchases of automobiles, mobile
homes, boats and other recreational vehicles, home improvements, education and
personal investments. The Bank anticipates that it will retain substantially all
of such loans. The Bank intends initially to offer only balloon payment and
adjustable rate mortgages. It does not anticipate offering long-term fixed rate
mortgage products, except through an arrangement with outside providers. The
Bank expects that any fixed rate residential mortgage loans it generates will be
sold to third party investors, though with respect to some of such loans, the
Bank may continue to service the loans for a fee. Commercial loans are expected
to be made primarily to small and mid-sized businesses. These loans will be both
secured and unsecured and will be available for general operating purposes,
acquisition of fixed assets, including real estate, purchases of equipment and
machinery, financing of inventory and accounts receivable as well as any other
purpose considered appropriate.
The Bank currently plans to offer other services, including credit cards,
money orders, traveler's checks, automated teller services with access to one or
more regional or national automated teller networks and safe deposit services.
Although the Bank has been involved in discussions with a number of vendors
regarding the provision of such services, the Bank does not expect to make final
decisions with respect to the providers of such services until approximately 60
days before its commencement of business. The Bank also intends to establish
relationships with correspondent banks and other financial institutions to
provide other services for its clients, including requesting correspondent banks
to participate in loans where the loan amount exceeds the Bank's policies or
legal lending limit.
Many of the data processing services, including on-line teller service,
will be purchased on a contract basis, reducing the number of persons otherwise
required to handle the operational functions of the Bank. The Bank is in the
process of discussing arrangements with potential data processing companies.
ASSET/LIABILITY MANAGEMENT
It will be the objective of the Company and the Bank to manage assets and
liabilities to provide a satisfactory, consistent level of profitability within
the framework of established cash, loan, investment, borrowing and capital
policies. Certain of the officers of the Bank will be responsible for monitoring
policies and procedures that are designed to insure acceptable composition of
the asset/liability mix, and stability and leverage of all sources of funds
while adhering to prudent banking practices. It also will be the overall
philosophy of management to support asset growth primarily through growth of
deposits, which include deposits of all categories made by individuals,
partnerships and corporations. Management of the Bank will seek to invest the
largest portion of its assets in commercial, consumer and real estate loans.
Bank management also will view the Bank's investment portfolio as a source of
liquidity and as a means to balance its asset/liability mix. The Bank will
invest primarily in obligations of the United States or obligations guaranteed
as to principal and interest by the United States, or other taxable securities
and in certain obligations of states and municipalities. The Bank also will
enter into Federal Funds transactions with its principal correspondent banks,
which represent a short term (generally overnight) loan from one bank to
another, to balance its liquidity needs.
The Bank intends to monitor its asset/liability mix on a daily basis and a
quarterly report reflecting interest-sensitive assets and interest-sensitive
liabilities will be prepared and presented to the Bank's Asset and Liability
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<PAGE> 21
Management Committee. The objective of this policy will be to manage liquidity
and control interest-sensitive assets and liabilities so as to minimize the
impact of substantial movements in interest rates on the Bank's earnings.
MARKET AREA
Overview
The Bank anticipates that the PMA for its services will be the Northern
part of Charlotte County, Florida and the Southeastern part of Sarasota County,
Florida. The communities of Port Charlotte and North Port are located in
Charlotte County and Sarasota County, respectively, on the Southwest coast of
Florida. Port Charlotte is part of the Punta Gorda MSA and North Port is part of
the Sarasota-Bradenton MSA. However, the Port Charlotte and North Port areas are
contiguous and form one market area, which the Bank considers its PMA. The PMA
is located approximately 40 miles south of Sarasota and 40 miles north of Ft.
Myers. Port Charlotte is unincorporated and North Port is incorporated. Both
communities were created and developed in the late 1950s. The PMA encompasses an
area of approximately 120 square miles.
The population of Charlotte County (which is also in the Punta Gorda MSA)
was 132,000 in 1996 and the population of Port Charlotte, at 48,000, comprised
36% of the County and the MSA. The population of North Port was 15,000, or 5% of
Sarasota County's population and 3% of the population of the Sarasota-Bradenton
MSA. The total population of the PMA in 1996 was 63,000, with 76% of the
population in Port Charlotte and 24% in North Port. The Bank's Extended Market
Area encompasses all of Charlotte and Sarasota Counties.
The Primary and Extended Market Areas offer recreational facilities,
cultural events, resorts, commercial office parks, residential developments,
major transportation routes, shopping centers, and entertainment areas. Access
to the area is by Interstate 75 and U.S. 41. Air service is through the
Sarasota/Bradenton International Airport and the Southwest Florida International
Airport in Ft. Myers, both less than an hour's drive from the area. The area's
annual average temperature of 75(0) provides comfortable year-round living.
Population
According to the Charlotte County Chamber of Commerce, Inc. Statistical
Prospectus, the U.S. Department of Commerce rated the Punta Gorda MSA, of which
Port Charlotte is a part, the "#1 Fastest growing metropolitan employment area
in the United States, for the period from 1993 through 2005." Seasonal
population, which includes part-time residents who may live for several months
in Charlotte County while maintaining another residence elsewhere, increases
from January through April, thereby increasing the population of the PMA during
that time.
The historical growth rate for the past five years was 15.3% in Port
Charlotte and 28.3% in North Port. These growth rates are higher than the
historical growth rates during the past five years of 6.6% for the United States
and 10.8% for Florida. In Charlotte County approximately 48% of the population
is over 55. This is reflective of the populations in the PMA. However, low
taxes, a below average cost of living, and a healthy business environment are
attracting young professionals to the area, as well as retirees.
Industry and Employment
Port Charlotte and North Port are part of one of the fastest growing areas
of the country. Business and entertainment service industries, retail trade,
government, construction, real estate, finance/ insurance, health care and
transportation/communication/ utility form the basis for the area's business
economy. Commercial construction of small shopping centers and small office
parks are in progress throughout the area (and throughout the Extended
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<PAGE> 22
Market Area). Until the late 1950s and early 1960s, agriculture was a major
economic basis for the area. Although not as important as it once was,
agriculture remains a part of the area's industry, with citrus crops, nurseries,
and vegetables making up the bulk of the agriculture business.
The largest employers in Charlotte County are the Charlotte County
Schools, the Charlotte Regional Medical Center, Fawcett Memorial Hospital,
Publix Super Market, the Charlotte Corrections Institute, and St. Joseph
Hospital. Other large employers include WalMart, K-Mart, and Sears. The
Charlotte County Government and the City of Punta Gorda also employ a
significant number of people. Many North Port residents work in Charlotte
County. However, North Port's major business areas include Trott Circle, a small
business park, and North Port Industrial Park, a 150+ acre complex anchored by
Florida Power & Light.
Management believes that this diverse and growing commercial base provides
potential for business banking services, together with personal banking services
for owners and employees of these enterprises.
COMPETITION
The Bank's intended market area is competitive. There are currently 13
banks and thrifts with 29 offices in the PMA and 24 banks and thrifts
representing 151 offices in the Extended Market Area. The Bank will also face
competition from finance companies, insurance companies, mortgage companies,
securities brokerage firms, money market funds, loan production offices and
other providers of financial services. Most of the Bank's competitors have been
in business for many years, have established customer bases, are substantially
larger, have substantially larger lending limits than the Bank and can offer
certain services, including multiple branches and international banking
services, that the Bank will be able to offer only through correspondent banks,
if at all. In addition, most of these entities have greater capital resources
than the Bank, which among other things, may allow them to price their services
at levels more favorable to clients and to provide larger credit facilities than
could the Bank. The Company anticipates that the Bank's legal lending limit of
approximately $1,125,000 will be adequate to satisfy the credit needs of most of
its clients and that the needs of its clients in excess of this amount will be
met through loan participation arrangements with correspondent banks and others.
The Bank will compete for loans principally through the range and quality
of the services it will provide, interest rates and loan fees. The Company
believes that its personal service philosophy will enhance the Bank's ability to
compete favorably in attracting individuals and local businesses. The Bank will
actively solicit deposit related clients and will compete for deposits by
offering clients personal attention, professional service and competitive
interest rates.
BANK PREMISES
The Company currently leases its premises at 4055 Tamiami Trail, Port
Charlotte, Florida 33952. The Company has entered into a contract to purchase
approximately 1.1 acres of commercially zoned land on which it will build the
Bank's main facility, which will also serve as the Company's executive offices.
The site is located at 1490 Tamiami Trail, which is at the intersection of U.S.
Highway 41 and Murdock Circle, a major intersection in Charlotte County. The
surrounding area is mixed-use commercial and industrial properties, including
the regional Town Center Mall and Port Charlotte Industrial Park. The
intersection is within one-half mile of the center of the area's residential
development.
The banking facility is anticipated to consist of approximately 7,800
square feet of office space and will include a community meeting / board room.
The facility will have five inside teller stations, three customer service
platform stations, three drive-through lanes, and one drive-up ATM lane.
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<PAGE> 23
A temporary banking facility comprising 1,960 square feet will be leased
and located on the site and will be utilized during the construction of the
permanent facility. This facility will be leased for a period of one year with
monthly lease payments, including equipment, estimated at $4,500 per month,
together with a one time $3,700 charge to deliver, install and remove the
facility. Site work necessary to accommodate the temporary facility will cost
approximately $44,000.
It is anticipated that the estimated land acquisition cost and
improvements will total approximately $875,000; building construction costs will
total approximately $984,000; and total costs for equipment and furnishings for
the building will total approximately $278,000. The Company has not entered into
any agreement with respect to the foregoing expenditures and, accordingly, there
is no insurance that the amounts actually incurred by the Company in connection
with the foregoing will not exceed the foregoing estimates.
EMPLOYEES
The Bank intends to commence operations with a staff of fewer than 15
full-time equivalent employees. Lewis S. Albert will serve as the Chairman of
the Board, Chief Executive Officer, and Treasurer of the Company and the Bank.
Todd H. Katz will serve as Vice Chairman, President, Secretary and General
Counsel of the Company and the Bank. The Bank has also identified and obtained
employment commitments with its remaining executive officers which are comprised
of a Senior Vice President-Senior Lending Officer and a Senior Vice
President-Cashier. At present, Messrs. Albert and Katz are the only employees
actively involved in the organization of the Company and the Bank and,
commencing in June 1997, have each been receiving a monthly consulting fee of
$7,000. This fee will be continued until such time as the Bank is authorized to
enter into employment agreements. See "Management Employment Agreements."
The Company will hire additional officers and employees prior to
commencement of the Bank's operations. Company management anticipates that the
Company will increase its staff from 15 to 21 full-time equivalent employees
during the second year of its operations in order to provide for anticipated
growth. The Company plans to employ as officers and employees of the Bank
primarily persons from the Bank's market areas who have experience in banking.
The Company intends to pay competitive salaries to attract and retain such
officers and employees.
MANAGEMENT
DIRECTORS AND OFFICERS
The directors and officers of the Company as of the date hereof, are as
follows:
<TABLE>
<CAPTION>
Positions Positions
Name Age with the Company with the Bank
- ---- --- ---------------- -------------
<S> <C> <C>
Lewis S. Albert... .............. 45 Chairman of the Board, Chairman of the Board,
Treasurer, and Chief and Chief Executive Officer
Executive Officer
Todd H. Katz..................... 32 Vice Chairman, President, Vice Chairman, President,
Secretary and General Counsel Secretary and General Counsel
Mark O. Asperilla, M.D.... 43 Director Director
</TABLE>
19
<PAGE> 24
<TABLE>
<S> <C> <C> <C>
James R. Baker................. 60 Director Director
Billie A. Barger................. 69 Director Director
James C. Brown................ 58 Director Director
Gerald P. Flagel ................ 61 Director Director
Gina D. Hahn.................... 65 Director Director
Larry A. Tenbusch............ 40 Director Director
</TABLE>
The Company has a classified board of directors, with directors serving
staggered three-year terms. The terms of Mr. Brown, Mrs. Hahn and Mr. Tenbusch,
as Class I directors, expire in April, 1998, the terms of Messrs. Albert,
Asperilla and Flagel, as Class II directors, expire in April, 1999, and the
terms of Messrs. Baker, Barger and Katz, as Class III directors, expire in
April, 2000. There are no family relationships among any of the Company'
directors, officers or key personnel, except that Gina D. Hahn is the
mother-in-law of Todd H. Katz . Officers of the Company and the Bank will be
elected annually by their respective Boards of Directors.
COMMITTEES OF THE BANK
The Board of Directors will establish various working committees of its
members. Committees will meet routinely and will report directly to the entire
Board of Directors. The Board Committees will include:
Asset - Liability Management Committee - Responsible for (i) overall
investment strategy, including liquidity and risk management, (ii) monitoring
deposit level trends and pricing, (iii) monitoring asset level trends and
pricing, and (iv) portfolio investment decisions, and (v) establishing
appropriate levels of insurance.
Audit, Compliance and CRA Committee - Responsible for (i) insuring the
Board receives objective information regarding policies, procedures and controls
of the Bank including auditing, accounting, internal accounting controls,
financial reporting, (ii) recommending the appointment of an independent auditor
on an annual basis, (iii) reviewing independent auditor's report and
management's response, (iv) reviewing all reports from regulatory authorities
and management's response, (v) establishing independent reviews and audits (vi)
insuring the Bank is in full compliance with all pertinent regulations and laws;
(vii) establishing an appropriate and independent testing program for
compliance, (viii) developing a proactive CRA program, (ix) developing programs
to insure compliance with Fair Lending Laws, and (x) establishing appropriate
levels of insurance.
Compensation Committee - Responsible for (i) establishing appropriate
levels of compensation throughout the Bank, (ii) analyzing compensation levels
on an annual basis, (iii) recommending overall compensation increases and
changes in benefits to the Board for approval, (iv) establishing policies with
regard to compensation and benefits at the Bank; and (v) recommending all
compensation increases, benefit changes and bonuses for senior officers to the
Board for approval.
Loan Committee - Responsible for (i) establishing, in conjunction with
management, and approving all major policies and procedures pertaining to
credit, (ii) establishing a loan approval system, (iii) reviewing all loans in
excess of specific amounts determined in policies and procedures, (iv) reviewing
all past due reports, rated loan reports, real estate owned, non-accrual
reports, and other indicators of overall loan portfolio quality, (v) assuring
adequate funding
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<PAGE> 25
of the loan loss reserve exists, and (v) handling other matters pertaining to
the credit function, such as yields and loan concentrations.
EXPERIENCE OF DIRECTORS AND OFFICERS
The experience and backgrounds of the directors and executive officers of
the Company and the Bank are summarized below.
DIRECTOR, CHAIRMAN AND CHIEF EXECUTIVE OFFICER - LEWIS S. ALBERT
Mr. Albert will be the Chairman, Treasurer and CEO for the Company and the
Bank. He is a Certified Public Accountant with 17 years experience at Deloitte
and Touche. From 1993 until May 1997, Mr. Albert was the Senior Vice President
and Chief Financial Officer for a $750 million multi-bank holding company in
Florida, Southwest Banks, Inc., that was acquired by an out-of-state holding
company. At Southwest Banks, Mr. Albert was responsible for financial and
regulatory reporting, tax planning and compliance, strategic financial planning,
investor relations, merger and acquisition analysis and implementation, capital
formation, budget management, and supervision of all affiliate financial,
corporate legal, compliance and internal audit functions. Mr. Albert also was
involved with retail and support functions at Southwest Banks, including product
selection and pricing, systems development and modification, employee benefit
plan issues and executive compensation matters. From 1992 until 1993, Mr. Albert
was President of Trebla Sales, Inc., a distributor of medical diagnostic
equipment and supplies. Mr. Albert has been actively involved in the South
Florida business community, having served as Secretary/Treasurer of the Board
for the South Florida Manufacturers Association, a member of the Fort Lauderdale
Chamber of Commerce, a member of the South Florida Business Council, and as
Chairman of the Chamber's Florida Industry Appreciation Week Committee.
DIRECTOR, VICE CHAIRMAN AND PRESIDENT - TODD H. KATZ
Mr. Katz, a banking attorney with both private practice and in-house
experience, will be the Vice Chairman, President, Secretary and General Counsel
of the Company and the Bank. He served as General Counsel of Southwest Banks,
Inc. from February 1993 to May 1997, with oversight of the holding company's and
its subsidiaries' legal and regulatory affairs, while directing the holding
company's shareholder relations and services departments. While at Southwest
Banks, Inc., Mr. Katz was involved in various financial, retail and planning
aspects for the holding company and its banks, including extensive involvement
in structuring the holding company's acquisition and branching objectives. From
January through December 1992, Mr. Katz directed the political campaign for Rob
Quartel, a candidate vying to represent Florida in the U.S. Senate. Prior to
organizing the campaign, Mr. Katz was an attorney with the banking firm of
Miller, Hamilton, Snider, and Odom. Mr. Katz has been active in the Southwest
Florida community through his service as a board member of the Collier County
Humane Society and the Youth Development Board and as an active member of the
Collier County Bar Association and the Florida Bar.
DIRECTORS
MARK O. ASPERILLA, M.D. - Born in Manila, Philippines, Dr. Asperilla is a
U.S. citizen who has lived in Charlotte County since 1991, when he formed his
current medical practice. Dr. Asperilla attended the University of St. Thomas,
Manila, Phillippines for his undergraduate and medical degrees. In addition to
managing his own medical practice, where he specializes in infectious disease
and internal medicine, Dr. Asperilla serves on the Executive Boards of St.
Joseph's Hospital and Fawcett Medical Center Hospital and is presently the
Secretary of the Charlotte County Medical Society. In addition to serving as a
Fellow of the American Board of Internal Medicine,
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<PAGE> 26
Dr. Asperilla is the President of two commercial citrus growing entities located
in the area, Emerald Groves and A&M Groves.
JAMES R. BAKER - Mr. Baker moved to Charlotte County in 1969 and
established his bio-solids management operations company, J&J Baker Enterprises,
in 1984. J&J Baker Enterprises is one of the largest privately owned
corporations of its type in Florida, with offices and divisions throughout the
State. Mr. Baker has served as President of that concern since its inception and
is actively involved in community and business associations, including the
Florida Cattleman's Association, the Charlotte County Chamber of Commerce, the
Charlotte County Economic Development Council, Charlotte County Pop Warner
Football Program, and the Charlotte County Fair Association Livestock and Cattle
Sale.
BILLIE A. BARGER - Mr. Barger has spent over 30 years in the banking and
thrift industries, most recently serving as Director, President and Chief
Executive Officer of Murdock Florida Bank in Charlotte County, Florida. He has
served in various Board of Director capacities for two other institutions in
Southwest Florida, having participated in the organization of Seminole Savings
Bank in St. Petersburg, Florida in 1983. Mr. Barger has also held Executive
Management positions with four institutions since 1974. Since 1989, Mr. Barger
has served as President of Bar-ton of Pinellas, Inc. d/b/a Northwest Mobile
Marts. He has been active in area civic groups including the Rotary Club of
Charlotte County as a member of the Board of Directors, and the Charlotte County
Chamber of Commerce and Economic Development Committee. He has also served as
past president for a number of civic groups including the Greater Seminole Area
Chamber of Commerce and the Southwest Florida Council for the Boy Scouts of
America.
JAMES C. BROWN - Mr. Brown moved to Charlotte County in 1982 from his home
state of Ohio to expand his concrete manufacturing company, Miami-Valley
Concrete, for which he has served as President since 1975. The company has
plants in Ohio and Florida and is a supplier of concrete products to
construction and real estate development concerns. Mr. Brown is an active member
of the North Port Builders Association, the Charlotte Building Contractors
Association, and the Florida Independent Concrete and Associated Products, Inc.
GERALD P. FLAGEL - Mr. Flagel graduated from Northwestern University and
the Ohio State University College of Law. He is an attorney and CPA specializing
in tax matters. He was the managing partner of a regional CPA firm in Dayton,
Ohio, his native state, until 1989 when he relocated to Naples, Florida, where
he has since practiced under Gerald P. Flagel, P.A., a tax and accounting firm.
Mr. Flagel helped found the Jewish Federation of Collier County and was that
organization's first president, and he currently sits on its board. He is active
in Temple Shalom and the Naples Philharmonic Center for the Arts.
GINA D. HAHN - A New Jersey native and a seasonal visitor to Southwest
Florida since 1969, Ms. Hahn relocated to Naples, Florida, in 1978. With her
husband, she founded Jewel Equities Corporation, a real estate development and
operating company located in upstate New York that recently purchased
substantial acreage in North Port. Ms. Hahn has overseen Jewel Equities
Corporation's operations as Vice President since 1968. Ms. Hahn served as the
Republican Party's Chairman of the 14th Congressional District from 1995 through
1996 and served two terms as the President of the 200 member Women's Republican
Club of Naples. She has served as the Second Vice President of the Florida
Federation of Republican Women since January 1997 and has been re-elected to
four-year terms as Republican State Committeewoman from Collier County since
1982.
LARRY A. TENBUSCH - Born in Michigan, Mr. Tenbusch moved to North Port in
1975 and, with his father, founded Tenbusch Construction. He has served as
President of the company since 1983, which is a high quality custom homebuilder.
He also served as the founding President of the North Port Contractors
Association. Mr. Tenbusch currently serves as Chairman of both the Certificate
Licensing Board and the Building and Construction Advisory Board for the City of
North Port.
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<PAGE> 27
EXECUTIVE OFFICERS OF THE BANK
In addition to Messrs. Albert and Katz, the Company also anticipates that
the Bank will hire two additional experienced individuals to serve as Senior
Vice Presidents of the Bank. One such individual will serve as the Bank's Senior
Lending Officer and have experience in that capacity within the Bank's PMA. The
second such individual will serve as the Bank's Senior Operations Officer and
will have experience in that capacity with community banks in the Southwest
Florida area.
EMPLOYMENT AGREEMENTS
The Company intends to enter into employment agreements with Messrs.
Albert and Katz. Each contract will be for a term effective upon the date
employment commences and run through the second anniversary from the date the
Bank receives its charter from the OCC. Unless renewed prior to the end of the
term, the contracts will provide that they be treated as a termination "without
cause" requiring severance benefits as discussed in the paragraph that follows.
The agreements further will provide for participation in the Company's health,
life, disability and retirement plans and the payment of club membership dues.
The agreements also will provide for the grant of options to purchase shares of
Common Stock under the Company's stock option plan. See " Incentive Stock Option
Plan."
The employment agreements will be terminable at any time by the Company's
Board of Directors. The agreements will provide severance benefits in the event
the executive is terminated "without cause" or his employment contract is not
renewed at the end of its term, including severance compensation equal to 100%
of his then current annual salary (including any incentive compensation) paid
during the full year preceding the notice of termination, together with the
value (if any) of stock options held by the executive whether or not vested. The
Company may terminate the agreements at any time for "cause" without incurring
any post-termination obligations. Upon a change in control, as defined, each
executive may, at his option, be paid severance benefits on the same basis as
discussed above. The agreements also will provide for the issuance of Incentive
Stock Options to the Executive Officers of the Company and the Bank at an
exercise price equal to that in this offering of Common Stock of $10 per share.
See "Incentive Stock Option Plan."
INCENTIVE STOCK OPTION PLAN
The Company's Board of Directors and initial stockholders have adopted an
Incentive Stock Option Plan to promote equity ownership of the Company by
selected officers and employees of the Company and the Bank, to increase their
proprietary interest in the success of the Company and to encourage them to
remain in the employ of the Company.
ADMINISTRATION. The Stock Incentive Plan will be administered by the
Company's Compensation Committee (the "Committee"), which is comprised of at
least two non-employee directors appointed by the Company's Board of Directors.
The Committee will have the authority to select the officers and employees to
whom awards may be granted, to determine the terms of each award, to interpret
the provisions of the Incentive Stock Option Plan and to make all other
determinations that it may deem necessary or advisable for the administration of
the Incentive Stock Option Plan.
The Stock Incentive Plan provides for the grant of "incentive stock
options," as defined under Section 422(b) of the Internal Revenue Code of 1986,
as amended. The Board of Directors has reserved 125,000 shares of Common Stock
for issuance under the Stock Incentive Plan. In general, if any award granted
under the Stock Incentive Plan expires, terminates, is forfeited or is canceled
for any reason, the shares of Common Stock allocable to such award may again be
made subject to an award granted under the Incentive Stock Option Plan.
23
<PAGE> 28
AWARDS. Officers and policy-making employees of the Company and the Bank
are eligible to receive grants under the Incentive Stock Option Plan. Awards may
be granted subject to a vesting requirement and in any event will become fully
vested upon a merger or change of control of the Company. The exercise price of
incentive stock options must at least equal the fair market value of the Common
Stock subject to the option (determined as provided in the plan) on the date the
option is granted.
An incentive stock option granted under the Incentive Stock Option Plan to
an employee owning more than 10% of the total combined voting power of all
classes of capital stock of the Company is subject to the further restriction
that such option must have an exercise price of at least 110% of the fair market
value of the shares of Common Stock, issuable upon exercise of the option
(determined as of the date the option is granted) and may not have an exercise
term of more than five years. Incentive stock options are also subject to the
further restriction that the aggregate fair market value (determined as of the
date of grant) of Common Stock as to which any such incentive stock option first
becomes exercisable in any calendar year, is limited to $100,000. To the extent
options covering more than $100,000 worth of Common Stock first become
exercisable in any one calendar year, the excess will be nonstatutory options.
For purposes of determining which, if any, options have been granted in excess
of the $100,000 limit, options will be considered to become exercisable in the
order granted.
Each officer and key employee eligible to participate in the Incentive
Stock Option Plan will be notified by the Committee. To receive an award under
the Incentive Stock Option Plan, an award agreement must be executed which
specifies the type of award to be granted, the number of shares of Common Stock
to which the award relates, the terms and conditions of the award and the date
granted. In the case of an award of options, the award agreement will also
specify the price at which the shares of Common Stock subject to the option may
be purchased, and the date(s) on which the option becomes exercisable.
The full exercise price for all shares of Common Stock purchased upon the
exercise of options granted under the Incentive Stock Option Plan must be paid
by cash, personal check, personal note, award surrender or Common Stock owned at
the time of exercise. Incentive stock options granted to employees under the
Incentive Stock Option Plan may remain outstanding and exercisable for 10 years
from the date of grant or until the expiration of 90 days (or such lesser period
as the Committee may determine) from the date on which the person to whom they
were granted ceases to be employed by the Company. Options granted under the
Plan are exercisable in increments of 10% per year commencing on the date of
grant.
INCOME TAX. Incentive stock options granted under the Stock Incentive Plan
have certain advantageous tax attributes to the recipient under the income tax
laws. No taxable income is recognized by the option holder for income tax
purposes at the time of the grant or exercise of an incentive stock option,
although neither is there any income tax deduction available to the Company as a
result of such a grant or exercise. Any gain or loss recognized by an option
holder on the later disposition of shares of Common Stock acquired pursuant to
the exercise of an incentive stock option generally will be treated as capital
gain or loss if such disposition does not occur prior to one year after the date
of exercise of the option.
AMENDMENT AND TERMINATION. The Incentive Stock Option Plan expires 10
years after its adoption, unless sooner terminated by the Board of Directors.
The Board of Directors has authority to amend the Plan in such manner as it
deems advisable. The Plan provides for appropriate adjustment, as determined by
the Committee, in the number and kind of shares subject to unexercised options,
in the event of any change in the outstanding shares of Common Stock by reason
of a stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger or similar event.
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<PAGE> 29
ORGANIZERS' WARRANTS
The Company's Board of Directors and its initial stockholders have adopted
a warrant plan to compensate its non-employee organizers for their efforts in
and funding of the organization of the Company and the Bank. The Company intends
to issue warrants to purchase 0.34 shares of Common Stock for each share of
Common Stock purchased by such organizers prior to commencement by the Bank of
its banking business. The exercise price will be $10 per share, the offering
price of the Common Stock being offered herein. The warrants will vest over a
four year period (25% per year) commencing at the date of issuance and will have
a term of 10 years from the issuance date at which time they will expire. The
warrant agreement further provides for a call provision in the event the Bank is
determined to require additional capitalization under supervisory order, and if
not honored when called, will terminate at that time. The Company has reserved
96,443 shares of its Common Stock for issuance thereunder.
CERTAIN TRANSACTIONS
ORGANIZATIONAL ADVANCES
The organizers of the Company and the Bank have advanced to the Company an
aggregate of $366,000 for use in connection with organizational and capital
raising expenses. All such amounts advanced to the Company from its organizers
do not bear interest. Such advances will be repaid in the form of shares of
Common Stock sold in this offering, valued at the offering price of $10 per
share. In compensation for their efforts in and funding of the organization of
the Company and the Bank, the Company will grant certain warrants to the
non-employee organizers to purchase Common Stock of the Company for $10 per
share. See "Principal Shareholders" and "Management - Organizers' Warrants."
BANKING TRANSACTIONS
It is anticipated that the directors and officers of the Company and the
Bank and the companies with which they are associated will have banking and
other transactions with the Company and the Bank in the ordinary course of
business. All transactions between the Company and affiliated persons, including
5% stockholders, will be on terms no less favorable to the Company than could be
obtained from independent third parties. Any loans and commitments to lend to
such affiliated persons or entities included in such transactions will be made
in accordance with all applicable laws and regulations and on substantially the
same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with unaffiliated parties of similar
creditworthiness.
INDEMNIFICATION
The Articles of Incorporation and Bylaws of the Company provide for the
indemnification of directors and officers of the Company and the Bank, including
reasonable legal fees, incurred by such directors and officers while acting for
or on behalf of the Company or the Bank as a director, officer, employee or
agent, subject to certain limitations. See "Description of Capital Stock -
Certain Anti-Takeover, Indemnification and Limited Liability Provisions." The
Company expects to purchase directors' and officers' liability insurance for
directors and officers of the Company and the Bank.
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<PAGE> 30
PRINCIPAL SHAREHOLDERS
Except for 100 shares issued to Lewis S. Albert and Todd H. Katz for the
sole purpose of incorporating the Company and electing its directors, the
Company has not yet issued any Common Stock. These organizational shares will be
repurchased by the Company at their $1,000 cost concurrently with the closing of
this offering. See "Description of Capital Stock - Common Stock." The following
table sets forth certain information with respect to the anticipated beneficial
ownership of Common Stock after the sale of shares offered hereby, by: (i) each
person expected by the Company to beneficially own more than 5% of the
outstanding Common Stock; (ii) each of the current directors and executive
officers of the Company and the contemplated directors and executive officers of
the Bank; and (iii) all such directors and executive officers of the Company and
the Bank as a group. All share numbers are provided based upon estimates,
supplied to the Company by the persons listed below, of the number of shares of
Common Stock expected to be purchased in this offering by such persons,
including shares which may be issued to certain directors in full or partial
satisfaction of advances made to the Company. See "Certain Transactions
Organizational Advances." Depending upon their individual circumstances at the
time, each of such individuals may purchase a greater or fewer number of shares
than indicated in the following table.
<TABLE>
<CAPTION>
Number of shares
beneficially owned Percentage of outstanding
Name after this offering (1) shares owned after this offering
- ---- ----------------------- --------------------------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Lewis S. Albert 4,500 0.45%
Mark O. Asperilla 13,017 1.30%
James R. Baker 10,847 1.08%
Billie A. Barger 1,084 0.11%
James C. Brown 10,847 1.08%
Gerald P. Flagel 21,695 2.17%
Gina D. Hahn 10,847 1.08%
Todd H. Katz 4,500 0.45%
Larry A. Tenbusch 6,508 0.65%
------ ----
Directors and executive officers as a group (9 83,845 8.30%
individuals)
</TABLE>
(1) The information contained in this column is based upon information
furnished to the Company by the persons named above and the members of the
designated group. The nature of beneficial ownership for shares shown in
this column is sole voting and investment power. Inclusion of shares shall
not constitute an admission of beneficial ownership or voting or
investment power over included shares. The shares set forth above also
include as to each director the number of shares listed below, which
represents shares the individual will have the right to acquire pursuant
to then presently exercisable options and warrants.
<TABLE>
<CAPTION>
Name of Individual Number of Shares
------------------ ----------------
<S> <C>
Lewis S. Albert 2,000
Mark O. Asperilla 1,017
James R. Baker 847
Billie A. Barger 84
James C. Brown 847
</TABLE>
26
<PAGE> 31
<TABLE>
<S> <C>
Gerald P. Flagel 1,695
Gina D. Hahn 847
Todd D. Katz 2,000
Larry A. Tenbusch 508
-------
9,845
</TABLE>
SUPERVISION AND REGULATION
Banks and their holding companies, and many of their affiliates, are
extensively regulated under both federal and state law. The following is a brief
summary of certain statutes, rules, and regulations affecting the Company and
the Bank. This summary is qualified in its entirety by reference to the
particular statutory and regulatory provisions referred to below and is not
intended to be an exhaustive description of the statutes or regulations
applicable to the business of the Company and the Bank. Any change in the
applicable law or regulation may have a material effect on the business and
prospects of the Company and the Bank. See "Risk Factors -- Government
Regulation and Monetary Policy." Supervision, regulation, and examination of
banks by regulatory agencies are intended primarily for the protection of
depositors, rather than shareholders.
Bank Holding Company Regulation. The Company is a bank holding company
registered with the Federal Reserve under the BHC Act. As such, the Company is
subject to the supervision, examination and reporting requirements of the BHC
Act and the regulations of the Federal Reserve. The Company is required to
furnish to the Federal Reserve an annual report of its operations at the end of
each fiscal year, and such additional information as the Federal Reserve may
require pursuant to the BHC Act. The BHC Act requires that a bank holding
company obtain the prior approval of the Federal Reserve before (i) acquiring
direct or indirect ownership or control of more than 5% of the voting shares of
any bank, (ii) taking any action that causes a bank to become a subsidiary of
the bank holding company, or (iii) merging or consolidating with any other bank
holding company.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business of
banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy and consideration of convenience and needs issues includes the parties'
performance under the Community Reinvestment Act of 1977 (the "CRA"), both of
which are discussed below.
The BHC Act generally prohibits a bank holding company from engaging in
activities other than banking, or managing or controlling banks or other
permissible subsidiaries, and from acquiring or retaining direct or indirect
control of any company engaged in any activities other than those activities
determined by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In determining
whether a particular activity is permissible, the Federal Reserve must consider
whether the performance of such an activity can reasonably be expected to
produce benefits to the public, such as greater convenience, increased
competition, or gains in efficiency that outweigh possible adverse effects, such
as undue concentration of resources, decreased or unfair competition, conflicts
of interest, or unsound banking practices. For example, factoring accounts
receivable, acquiring or servicing loans, leasing personal property, conducting
securities brokerage activities, performing certain data processing services,
acting as agent or broker in selling credit life insurance and certain other
27
<PAGE> 32
types of insurance in connection with credit transactions, and certain insurance
underwriting activities have all been determined by regulations of the Federal
Reserve to be permissible activities of bank holding companies. Despite prior
approval, the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or terminate its ownership or control of
any subsidiary, when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.
Banks are subject to the provisions of the CRA. Under the terms of the
CRA, the appropriate federal bank regulatory agency is required, in connection
with its examination of a bank, to assess such bank's record in meeting the
credit needs of the community served by that bank, including low- and
moderate-income neighborhoods. The regulatory agency's assessment of the bank's
record is made available to the public. Further, such assessment is required of
any bank which has applied to (i) charter a national bank, (ii) obtain deposit
insurance coverage for a newly chartered institution, (iii) establish a new
branch office that will accept deposits, (iv) relocate an office, or (v) merge
or consolidate with, or acquire the assets or assume the liabilities of, a
federally regulated financial institution. In the case of a bank holding company
applying for approval to acquire a bank or other bank holding company, the
Federal Reserve will assess the record of each subsidiary bank of the applicant
bank holding company, and such records may be the basis for denying the
application.
Bank Regulation. The Bank will be chartered by the OCC under the National
Banking Act. The Bank's deposits will be insured by the FDIC to the extent
provided by law. The Bank will be subject to comprehensive regulation,
examination and supervision by the OCC. The Bank also will be subject to other
laws and regulations applicable to banks. Such regulations include limitations
on loans to a single borrower and to its directors, officers and employees;
restrictions on the opening and closing of branch offices; the maintenance of
required capital and liquidity ratios; the granting of credit under equal and
fair conditions; and the disclosure of the costs and terms of such credit. The
Bank will be examined periodically by the OCC, to whom the Bank will submit
periodic reports regarding its financial condition and other matters. The OCC
has a broad range of powers to enforce regulations under its jurisdiction, and
to take discretionary actions determined to be for the protection and safety and
soundness of banks, including the institution of cease and desist orders and the
removal of directors and officers. The OCC also has the authority to approve or
disapprove mergers, consolidations, and similar corporate actions.
Under federal law, federally insured banks are subject, with certain
exceptions, to certain restrictions on any extension of credit to their parent
holding companies or other affiliates, on investment in the stock or other
securities of affiliates, and on the taking of such stock or securities as
collateral from any borrower. In addition, banks are prohibited from engaging in
certain tie-in arrangements in connection with any extension of credit or the
providing of any property or service.
In 1989, the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA") was enacted. FIRREA contains major regulatory reforms,
stronger capital standards for savings and loan associations and stronger civil
and criminal enforcement provisions. FIRREA also provides that a depository
institution insured by the FDIC can be held liable for any loss incurred by, or
reasonably expected to be incurred by, the FDIC after August 9, 1989 in
connection with (i) the default of a commonly controlled FDIC insured depository
institution, or (ii) any assistance provided by the FDIC to a commonly
controlled FDIC insured institution in danger of default.
In 1991, the FDIC Improvement Act of 1991 ("FDICIA") was enacted. FDICIA
made a number of reforms addressing the safety and soundness of deposit
insurance funds, supervision, accounting, and prompt regulatory action, and also
implemented other regulatory improvements. Annual full-scope, on-site
examinations are required of all insured depository institutions. The cost for
conducting an examination of an institution may be assessed to that institution,
with special consideration given to affiliates and any penalties imposed for
failure to provide information
28
<PAGE> 33
requested. Insured state banks also are precluded from engaging as principal in
any type of activity that is impermissible for a national bank, including
activities relating to insurance and equity investments. FDICIA also recodified
current law restricting extensions of credit to insiders under the Federal
Reserve Act.
Transactions with Affiliates. There are various legal restrictions on the
extent to which the Company and any future nonbank subsidiaries can borrow or
otherwise obtain credit from the Bank. There also are legal restrictions on the
Bank's purchase of or investments in the securities of and purchases of assets
from the Company and any of its future nonbank subsidiaries, the Bank's loans or
extensions of credit to third parties collateralized by the securities or
obligations of the Company and any of its future nonbank subsidiaries, the
issuance of guarantees, acceptances, and letters of credit on behalf of the
Company and any of its future nonbank subsidiaries, and certain bank
transactions with the Company and any of its future nonbank subsidiaries, or
with respect to which the Company and nonbank subsidiaries act as agent,
participate or have a financial interest. Subject to certain limited exceptions,
the Bank may not extend credit to the Company or to any other affiliate in an
amount which exceeds 10% of the Bank's capital stock and surplus and may not
extend credit in the aggregate to such affiliates in an amount which exceeds 20%
of its capital stock and surplus. Further, there are legal requirements as to
the type, amount and quality of collateral which must secure such extensions of
credit transactions between the Bank and the Company or such other affiliates,
and such transactions must be on terms and under circumstances, including credit
standards, that are substantially the same or at least as favorable to the Bank
as those prevailing at the time for comparable transactions with non-affiliated
companies. Also, the Company and its subsidiaries are prohibited from engaging
in certain tie-in arrangements in connection with any extension of credit, lease
or sale of property or furnishing of services.
Dividends. Dividends from the Bank constitute the primary source of funds
for dividends to be paid by the Company. For additional information, see " Risk
Factors - No Assurance of Dividends" and "Dividend Policy." There also are
various statutory and contractual limitations on the ability of the Bank to pay
dividends, extend credit, or otherwise supply funds to the Company. As a
national bank, the Bank may not pay dividends from its paid-in surplus. All
dividends must be paid out of undivided profits then on hand, after deducting
expenses, including reserves for losses and bad debts. In addition, a national
bank is prohibited from declaring a dividend on its shares of common stock until
its surplus equals its stated capital, unless there has been transferred to
surplus no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the OCC is required if the total of all dividends declared by a national bank
in any calendar year exceeds the total of its net profits for that year combined
with its retained net profits for the preceding two years, less any required
transfers to surplus. Florida law applicable to companies (including the
Company) provides that dividends may be declared and paid only if, after giving
it effect, (i) the company is able to pay its debts as they become due in the
usual course of business, and (ii) the company's total assets would be greater
than the sum of its total liabilities plus the amount that would be needed if
the company were to be dissolved at the time of the dividend to satisfy the
preferential rights upon dissolution of shareholders whose preferential rights
are superior to those receiving the dividend.
Capital Requirements. The federal bank regulatory authorities have adopted
risk-based capital guidelines for banks and bank holding companies that are
designed to make regulatory capital requirements more sensitive to differences
in risk profile among banks and bank holding companies. The resulting capital
ratios represent qualifying capital as a percentage of total risk-weighted
assets and off-balance sheet items. The guidelines are minimums, and the federal
regulators have noted that banks and bank holding companies contemplating
significant expansion programs should not allow expansion to diminish their
capital ratios and should maintain all ratios well in excess of the minimums.
The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common stockholders' equity, qualifying perpetual preferred stock, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
29
<PAGE> 34
lease losses. Tier 2 capital includes the excess of any preferred stock not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred stock, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
FDICIA contains "prompt corrective action" provisions pursuant to which
banks are to be classified into one of five categories based upon capital
adequacy, ranging from "well capitalized" to "critically undercapitalized" and
which require (subject to certain exceptions) the appropriate federal banking
agency to take prompt corrective action with respect to an institution which
becomes "significantly undercapitalized" or "critically undercapitalized".
The OCC has issued final regulations to implement the "prompt corrective
action" provisions of FDICIA. In general, the regulations define the five
capital categories as follows: (i) an institution is "well capitalized" if it
has a total risk-based capital ratio of 10% or greater, has a Tier 1 risk-based
capital ratio of 6% or greater, has a leverage ratio of 5% or greater and is not
subject to any written capital order or directive to meet and maintain a
specific capital level for any capital measures; (ii) an institution is
"adequately capitalized" if it has a total risk-based capital ratio of 8% or
greater, has a Tier 1 risk-based capital ratio of 4% or greater, and has a
leverage ratio of 4% or greater; (iii) an institution is "undercapitalized" if
it has a total risk-based capital ratio of less than 8%, has a Tier 1 risk-based
capital ratio that is less than 4% or has a leverage ratio that is less than 4%;
(iv) an institution is "significantly undercapitalized" if it has a total
risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio
that is less than 3% or a leverage ratio that is less than 3%; and (v) an
institution is "critically undercapitalized" if its "tangible equity" is equal
to or less than 2% of its total assets. The OCC also, after an opportunity for a
hearing, has authority to downgrade an institution from "well capitalized" to
"adequately capitalized" or to subject an "adequately capitalized" or
"undercapitalized" institution to the supervisory actions applicable to the next
lower category, for supervisory concerns. The degree of regulatory scrutiny of a
financial institution will increase, and the permissible activities of the
institution will decrease, as it moves downward through the capital categories.
Institutions that fall into one of the three undercapitalized categories may be
required to (i) submit a capital restoration plan; (ii) raise additional
capital; (iii) restrict their growth, deposit interest rates, and other
activities; (iv) improve their management; (v) eliminate management fees; or
(vi) divest themselves of all or part of their operations. Bank holding
companies controlling financial institutions can be called upon to boost the
institutions' capital and to partially guarantee the institutions' performance
under their capital restoration plans. These capital guidelines can affect the
Company in several ways. After completion of this offering, the Company's
capital levels will be in excess of those required to be maintained by a "well
capitalized" financial institution. However, rapid growth, poor loan portfolio
performance, or poor earnings performance, or a combination of these factors,
could change the Company's capital position in a relatively short period of
time, making an additional capital infusion necessary.
Additionally, FDICIA requires, among other things, that (i) only a "well
capitalized" depository institution may accept brokered deposits without prior
regulatory approval and (ii) the appropriate federal banking agency annually
examine all insured depository institutions, with some exceptions for small,
"well capitalized" institutions and state-chartered institutions examined by
state regulators. FDICIA also contains a number of consumer banking provisions,
including disclosure requirements and substantiative contractual limitations
with respect to deposit accounts.
Enforcement Powers. Congress has provided the federal bank regulatory
agencies with an array of powers to enforce laws, rules, regulations and orders.
Among other things, the agencies may require that institutions cease and desist
from certain activities, may preclude persons from participating in the affairs
of insured depository institutions, may suspend or remove deposit insurance, and
may impose civil money penalties against institution-affiliated parties for
certain violations.
Maximum Legal Interest Rates. Like the laws of many states, Florida law
contains provisions on interest rates that may be charged by banks and other
lenders on certain types of loans. Numerous exceptions exist to the general
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<PAGE> 35
interest limitations imposed by Florida law. The relative importance of these
interest limitation laws to the financial operations of the Bank will vary from
time to time, depending on a number of factors, including conditions in the
money markets, the costs and availability of funds, and prevailing interest
rates.
Bank Branching. Banks in Florida are permitted to branch state wide. Such
branch banking by national banks, however, is subject to prior approval by the
OCC. Any such approval would take into consideration several factors, including
the bank's level of capital, the prospects and economics of the proposed branch
office, and other conditions deemed relevant by the OCC for purposes of
determining whether approval should be granted to open a branch office. For
information regarding legislation on interstate branching in Florida, see "--
Interstate Banking" below.
Change of Control. Federal law restricts the amount of voting stock of a
bank holding company and a bank that a person may acquire without the prior
approval of banking regulators. The overall effect of such laws is to make it
more difficult to acquire a bank holding company and a bank by tender offer or
similar means than it might be to acquire control of another type of
corporation. Consequently, shareholders of the Company may be less likely to
benefit from the rapid increases in stock prices that may result from tender
offers or similar efforts to acquire control of other companies. Federal law
also imposes restrictions on acquisitions of stock in a bank holding company and
a state bank. Under the federal Change in Bank Control Act and the regulations
thereunder, a person or group must give advance notice to the Federal Reserve
before acquiring control of any bank holding company and the OCC before
acquiring control of any national bank (such as the Bank). Upon receipt of such
notice, the Federal Reserve or the OCC, as the case may be, may approve or
disapprove the acquisition. The Change in Bank Control Act creates a rebuttable
presumption of control if a member or group acquires a certain percentage or
more of a bank holding company's or state bank's voting stock, or if one or more
other control factors set forth in the Act are present.
Interstate Banking. The Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, provides for nationwide interstate banking and
branching. Under the law, interstate acquisitions of banks or bank holding
companies in any state by bank holding companies in any other state are
permissible subject to certain limitations. Florida also has a law that allows
out-of-state bank holding companies (located in states that allow Florida bank
holding companies to acquire banks and bank holding companies in that state) to
acquire Florida banks and Florida bank holding companies. The law essentially
provides for out-of-state entry by acquisition only (and not by interstate
branching) and requires the acquired Florida bank to have been in existence for
at least three years. Interstate branching and consolidation of existing bank
subsidiaries in different states is permissible. A Florida bank also may
establish, maintain, and operate one or more branches in a state other than
Florida pursuant to an interstate merger transaction in which the Florida bank
is the resulting bank. An interstate merger transaction resulting in the
acquisition by an out-of-state bank of a Florida bank is not permitted unless
the Florida bank has been in existence and continuously operating, on the date
of the acquisition, for more than three years.
Effect of Governmental Policies. The earnings and businesses of the
Company and the Bank are affected by the policies of various regulatory
authorities of the United States, especially the Federal Reserve. The Federal
Reserve, among other things, regulates the supply of credit and deals with
general economic conditions within the United States. The instruments of
monetary policy employed by the Federal Reserve for those purposes influence in
various ways the overall level of investments, loans, other extensions of
credit, and deposits, and the interest rates paid on liabilities and received on
assets.
INDUSTRY RESTRUCTURING
For well over a decade, the banking industry has been undergoing a
restructuring process which is anticipated to continue. The restructuring has
been caused by product and technological innovations in the financial services
industry, deregulation of interest rates, and increased competition from foreign
and nontraditional banking
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<PAGE> 36
competitors, and has been characterized principally by the gradual erosion of
geographic barriers to intrastate and interstate banking and the gradual
expansion of investment and lending authorities for bank institutions.
Members of Congress and the administration have indicated their intention
to consider additional legislation designed to institute reforms to promote the
viability of the industry. Certain of the proposals would revise the federal
regulatory structure for insured depository institutions; others would affect
the nature of products, services, and activities that bank holding companies and
their subsidiaries may offer or engage in, and the types of entities that may
control depository institutions. There can be no assurance as to whether or in
what form any such proposed legislation might be enacted, or what impact such
legislation might have upon the Company.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company presently consists of
10,000,000 shares of Common Stock, par value $.01 per share, and 2,000,000
shares of preferred stock, par value not stated (the "Preferred Stock").
COMMON STOCK
As of the date of this Prospectus, there were 100 shares of Common Stock
issued and outstanding of which Messrs. Albert And Katz held 50 shares each.
These shares were issued at a price of $10.00 per share for the sole purpose of
incorporating the Company, and for other organizational purposes, and they will
be redeemed at cost and canceled concurrently with the closing of this offering.
All outstanding shares of Common Stock offered hereby will be fully paid and
nonassessable. The holders of Common Stock are entitled to one vote for each
share held of record on all matters voted upon by stockholders. Subject to
preferences that may be applicable to any outstanding shares of Preferred Stock,
each share of outstanding Common Stock is entitled to participate equally in any
distribution of net assets made to the stockholders in liquidation, dissolution
or winding up the Company and is entitled to participate equally in dividends as
and when declared by the Company's Board of Directors. There are no redemption,
sinking fund, conversion or preemptive rights with respect to the shares of
Common Stock. All shares of Common Stock have equal rights and preferences. The
transfer agent and registrar for the Common Stock is American Stock Transfer &
Trust Company.
PREFERRED STOCK
As of the date of this Prospectus, no shares of Preferred Stock were
issued or outstanding. The Board of Directors is authorized to fix or alter the
rights, preferences, privileges and restrictions of any wholly unissued series
of Preferred Stock, including the dividend rights, original issue price,
conversion rights, voting rights, terms of redemption, liquidation preferences
and sinking fund terms thereof, and the number of shares constituting any such
series and the designation thereof and to increase or decrease the number of
shares of such series subsequent to the issuance of shares of such series (but
not below the number of shares then outstanding). The Board of Directors,
without shareholder approval, can issue Preferred Stock with the voting and
conversion rights described above, which could adversely affect the voting
power of the shareholders of Common Stock.
CERTAIN ANTI-TAKEOVER, INDEMNIFICATION AND LIMITED LIABILITY PROVISIONS
The Company's Board of Directors may authorize the issuance of additional
shares of Common Stock or Preferred Stock without further action by the Company
shareholders, unless such action is required in a particular case by applicable
laws or regulation. The authority to issue additional Common Stock or Preferred
Stock provides the Company with the flexibility necessary to meet its future
needs without the delay resulting from seeking shareholder approval. The
unissued Common Stock or Preferred Stock may be issued from time to time for any
corporate
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<PAGE> 37
purposes, including without limitation, stock splits, stock dividends, employee
benefit and compensation plans, acquisitions and public and private sales for
cash as a means of raising capital. Such shares could be used to dilute the
stock ownership of persons seeking to obtain control of the Company. In
addition, the sale of a substantial number of shares of Common Stock or
Preferred Stock to persons who have an understanding with the Company concerning
the voting of such shares, or the distribution or dividend of Common Stock or
Preferred Stock (or right to receive such shares) to the Company's shareholders,
may have the effect of discouraging or otherwise increasing the cost of
unsolicited attempts to acquire control of the Company. Further, because the
Company's Board has the power to determine the voting, conversion or other
rights of the Preferred Stock, the issuance of a series of Preferred Stock to
persons friendly to management could effectively discourage or preclude
consummation of a change in control transaction or have the effect of
maintaining the position of the Company's incumbent management. The Company does
not currently have any plans or commitments to use its authority to effect any
such issuance, but reserves the right to take any action that the Board of
Directors deems to be in the best interests of the Company and its shareholders.
The Company's Bylaws also contain provisions that provide that the Board
of Directors shall be divided into three classes as nearly equal in number as
the then total number of directors constituting the Board permits, with the
total of office of one class expiring each year. The classification of directors
has the effect of making it more difficult to change the composition of the
Board of Directors. At least two shareholder meetings, instead of one, is
required to effect a change in a majority of the Board. The Board believes that
the longer time required to elect a majority of a classified Board will help to
assure the continuity and stability of the Company's directors and policies in
the future, since a majority of the directors at any given time will have prior
experience as directors of the Company. The classification provision applies for
every election of directors, regardless of whether a change in the Board might
arguably be beneficial to the Company and its shareholders and whether or not a
majority of the Company's shareholders believes that such a change would be
desirable.
The Company is subject to several provisions under Florida law which may
deter or frustrate unsolicited attempts to acquire certain Florida corporations.
These statutes, commonly referred to as the "Control Share Act" and the "Fair
Price Act," apply to most public corporations organized in Florida unless the
corporation has specifically elected to opt out of such provisions. The Company
has not elected to opt out of these provisions. The Fair Price Act generally
requires that certain transactions between a public corporation and an affiliate
must be approved by two-thirds of the disinterested directors or shareholders
(not including those shares beneficially owned by an "interested shareholder").
The Control Share Act generally provides that shares of a public corporation
acquired in excess of certain specified thresholds will not posses any voting
rights unless such voting rights are approved by a majority vote of the
corporation's disinterested shareholders. These anti-takeover provisions of
Florida law could result in the Company being less attractive to a potential
acquiror and/or result in shareholders receiving less for their shares than
might otherwise might be available in the event an unsolicited takeover attempt.
The Florida Business Corporation Act authorizes a company to indemnify its
directors and officers in certain instances against certain liabilities which
they may incur by virtue of their relationship with the company. A company may
indemnify any director, officer, employee or agent against judgments, fines,
penalties, amounts paid in settlement, and expenses incurred in any pending,
threatened or completed civil, criminal, administrative, or investigative
proceeding (except an action by the company) against him in his capacity as a
director, officer, employee, or agent of the company, or another company if
serving in such capacity at the company's request if he (i) acted in good faith;
(ii) acted in a manner which he reasonably believed to be in or not opposed to
the best interests of the company; and (iii) with respect to a criminal action,
had no reasonable cause to believe his conduct was unlawful. Furthermore, a
company may indemnify any director, officer, agent or employee against expenses
incurred in defense or settlement of any proceeding brought by the company
against him in his capacity as a director, officer, employee or agent of the
company, or another company if serving in such capacity at the company's
request, if he:
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<PAGE> 38
(i) acted in good faith; (ii) acted in a manner which he reasonably believed to
be in or not opposed to the best interests of the company; and (iii) is not
adjudged to be liable to the company (unless the court finds that he is
nevertheless reasonably entitled to indemnity for expenses which the court
deems proper). A company must repay the expenses of any director, officer,
employee or agent who is successful on the merits of an action against him in
his capacity as such.
A Florida company is authorized to make any other or further
indemnification or advancement of expenses of any of its directors, officers,
employees, or agents, except for acts or omissions which constitute (i) a
violation of the criminal law (unless the individual had reasonable cause to
believe it was lawful); (ii) a transaction in which the individual derived an
improper personal benefit; (iii) in the case of a director, a circumstance
under which certain liability provisions of the Florida Business Corporation
Act are applicable (related to payment of dividends or other distributions or
repurchases of shares in violation of such Act); or (iv) willful misconduct or
a conscious disregard for the best interest of the company in a proceeding by
the company, or a company shareholder. A Florida company also is authorized to
purchase and maintain liability insurance for its directors, officers,
employees and agents.
The Company's Articles of Incorporation and Bylaws provide that the
Company shall indemnify each of its directors and officers to the fullest
extent permitted by law, and that the indemnity will include advances for
expenses and costs incurred by such director or officer related to any action
in regard to which indemnity is permitted. At present, the Company maintains
directors' and officers' liability insurance covering its directors and
officers against expenses and liabilities arising from certain actions to which
they may become subject by reason of having served in such role. Such insurance
is subject to the coverage amounts, exceptions, deductibles and other
conditions set forth in the policy. There is no assurance that the Company will
maintain liability insurance for its directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to Directors, officers, or 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 such Act and is
therefore unenforceable.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company expects to have 1,000,000
shares of its Common Stock outstanding. The 1,000,000 shares of the Company's
Common Stock purchased in this offering (plus any additional shares sold upon
the Underwriter's exercise of its over-allotment option) have been registered
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), and may generally be
resold without registration under the Securities Act unless they were acquired
by directors, executive officers, or other affiliates of the Company or the
Bank (collectively, "Affiliates"). Affiliates of the Company may generally only
sell shares of the Common Stock pursuant to the Commission's Rule 144.
In general, under Rule 144 as currently in effect, an affiliate (as
defined in Rule 144) of the Company may sell shares of Common Stock within any
three-month period in an amount limited to the greater of 1% of the outstanding
shares of the Company's Common Stock (10,000 shares immediately after the
completion of this offering) or the average weekly trading volume in the
Company's Common Stock during the four calendar weeks preceding such sale.
Sales under Rule 144 are also subject to certain manner-of-sale provisions,
notice requirements and the availability of current public information about
the Company.
The Company and the directors and officers of the Company and the Bank
(who are expected to hold an aggregate of approximately 74,000 shares after
this offering), have agreed, or will agree, that they will not issue, offer
34
<PAGE> 39
for sale, sell, grant any options for the sale of or otherwise dispose of any
shares of Common Stock or any rights to purchase shares of Common Stock, in the
open market or otherwise, without the prior written consent of the Underwriter
for a period of 180 days from the date of this Prospectus. Prior to this
offering, there has been no public trading market for the Common Stock, and no
predictions can be made as to the effect, if any, that sales of shares or the
availability of shares for sale will have on the prevailing market price of the
Common Stock after completion of this offering. Nevertheless, sales of
substantial amounts of Common Stock in the public market could have an adverse
effect on prevailing market prices.
UNDERWRITING
Subject to the terms and conditions contained in an Underwriting
Agreement, Robert W. Baird & Co. Incorporated, as Underwriter, has agreed to
purchase from the Company an aggregate of up to 1,000,000 shares of Common
Stock at the Price to Public less the Underwriting Discounts and Commissions
set forth on the cover page of this Prospectus.
The Underwriting Agreement provides that the Underwriter's obligation
thereunder is subject to approval of certain legal matters by its counsel and
various other conditions. The Underwriter is obligated to purchase all such
shares, excluding shares covered by the over-allotment option granted to the
Underwriter, if any are purchased.
The Company has been advised by the Underwriter that it proposes to offer
the Common Stock to the public at the initial public offering price set forth
on the cover page of this Prospectus and to certain dealers at such price, less
a concession not in excess of $0.825 per share. However, no underwriting
discounts or commissions will be assessed with respect to sales to certain
investors identified by the Company to the Underwriter, in writing, prior to
the effectiveness of the registration statement, and that the Underwriter and
such dealers may reallow a concession not in excess of $_________ per share to
other dealers. The public offering price and concessions and reallowances to
dealers may be changed by the Underwriter after the initial public offering.
Unless waived by the Company, shares of Common Stock will be sold to the
public only in minimum lots of 250 shares ($2,500) and any one investor
(together with the investor's affiliates) will be permitted to purchase a
maximum of 50,000 shares ($500,000).
The Underwriter has informed the Company that it does not intend to
confirm sales of the shares of Common Stock offered hereby to any accounts over
which it exercises discretionary authority.
The Company has granted the Underwriter an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of 150,000
additional shares of Common Stock to cover over-allotments, if any, at the same
price per share to be paid by the Underwriter for the other shares of Common
Stock offered hereby. The Underwriter may exercise such option only for the
purpose of covering any over-allotments of the 1,000,000 shares of Common Stock
offered hereby.
The Company, its directors and executive officers and those of the Bank
agreed or will agree with the Underwriter, for a period of 180 days after the
date of this Prospectus, not to issue, sell, offer to sell, grant any options
for the sale of, or otherwise dispose of any shares of Common Stock or any
rights to purchase shares of Common Stock, in the open market or otherwise,
without the prior written consent of the Underwriter.
The Underwriter has advised the Company that it presently intends to make
a market in the Common Stock after the commencement of the offering, but no
assurance can be made as to the liquidity of the Common Stock or that an
35
<PAGE> 40
active and liquid trading market will develop or, if developed, that it will be
sustained. The Underwriter will have no obligation to make a market in the
Common Stock, however, and may cause market-making activities, if commenced, to
cease at any time.
The Company and the Underwriter have agreed to indemnify, or to
contribute to payments made by, each other against civil liabilities, including
civil liabilities under the Securities Act.
There has been no public trading market for the Common Stock. The
offering price of $10 per share was determined by negotiations between the
Company and the Underwriter. This price is not based upon earnings or any
history of operations and should not be construed as indicative of the present
or anticipated future value of the Common Stock. Several factors were
considered in determining the initial offering price of the Common Stock, among
them the size of the offering, the desire that the security being offered be
attractive to individuals and the Underwriter's experience in dealing with
initial public offerings for financial institutions.
William H. Elett, an employee of the Underwriter, is one of the Bank's
organizers. In connection with Mr. Elett's advancement of funds to the Bank for
organization expenses, as well as anticipated shares to be purchased by him in
the offering, he could receive warrants to purchase up to 14,577 shares of the
Common Stock having an exercise price of $10.00 per share.
In connection with the offering of the Common Stock, the Underwriter and
any selling group members and their respective affiliates may engage in
over-allotment, stabilizing transactions, syndicate covering transactions, and
penalty bids effected in accordance with Rule 104 of the SEC's Regulation M.
Over-allotment is a transaction in which the Underwriter creates a short
position for its own account by selling more Common Stock than it is committed
to purchase from the Company. To cover all or part of a short position, the
Underwriter may exercise the over-allotment option described above or may
purchase Common Stock in the open market following completion of the initial
offering of the Common Stock. In stabilizing transactions, the Underwriter may
bid for, and purchase, shares of the Common Stock at a level above that which
might otherwise prevail in the open market for the purpose of preventing or
retarding a decline in the market price of the Common Stock. Syndicate covering
transactions involve purchases of Common Stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Penalty bids permit the Underwriter to reclaim a selling concession from a
syndicate member when the Common Stock originally sold by such syndicate member
is purchased in a syndicate covering transaction to cover syndicate short
positions. Such over-allotment, stabilizing transactions, syndicate covering
transactions, and penalty bids may cause the price of the Common Stock to be
higher than it would otherwise be in the absence of such a transaction. The
Underwriter is required to engage in any of the foregoing transactions, and, if
commenced, may be discontinued at any time.
LEGAL PROCEEDINGS
Neither the Bank nor the Company is a party to any pending legal
proceeding. Management believes there is no litigation threatened in which the
Company or the Bank faces potential loss or exposure or which will materially
affect stockholders' equity or the Company's business or financial condition
upon completion of this offering.
LEGAL OPINIONS
The legality of the shares of Common Stock being offered hereby will be
passed upon for the Company by Smith, Mackinnon, Greeley, Bowdoin & Edwards,
P.A., Orlando, Florida. Holland & Knight LLP, Tampa, Florida
36
<PAGE> 41
is acting as counsel for the Underwriter in connection with certain legal
matters relating to the shares of Common Stock offered hereby.
EXPERTS
The financial statements of the Company included in this Prospectus have
been audited by Hill, Barth & King, Inc., independent public accountants, as
indicated in their report with respect thereto. Such financial statements have
been included herein and in the Registration Statement in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.
ADDITIONAL INFORMATION
The Company has filed a Registration Statement with the Commission in
accordance with the provisions of the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and regulations
of the Commission. For further information pertaining to the shares of Common
Stock offered hereby and to the Company, reference is made to the Registration
Statement, including the Exhibits filed as a part thereof, copies of which can
be inspected at and copied at the prescribed rates at the Public Reference
Section of the Commission Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the following Commission's regional offices: Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York, 10048; and
Midwest Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. In addition, the Company is required to file electronic versions of
these documents with the Commission through the Commission's Electronic Data
Gathering, Analysis and Retrieval (EDGAR) system. The Commission maintains a
World Wide Web site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission.
37
<PAGE> 42
FINANCIAL STATEMENTS
TARPON COAST BANCORP, INC.
(A Development Stage Company)
August 31, 1997
- - - o o O o o - - -
C O N T E N T S
<TABLE>
<CAPTION>
P A G E
- - - -
<S> <C>
Independent Auditors' Report - - - - - - - - - - - - - - F-2
Balance Sheet - - - - - - - - - - - - - - - - - - - - - F-3
Statement of Operations - - - - - - - - - - - - - - - - F-4
Statement of Changes in Shareholders Deficit - - - - - F-5
Statement of Cash Flows - - - - - - - - - - - - - - - - F-6
Notes to Financial Statements - - - - - - - - - - - - - F-7-9
</TABLE>
- - - o o O o o - - -
F-1
<PAGE> 43
[HILL, BARTH & KING, INC. LETTERHEAD]
Board of Directors
Tarpon Coast Bancorp, Inc.
Naples, Florida
Independent Auditors' Report
We have audited the accompanying balance sheet of Tarpon Coast Bancorp,
Inc. formerly known as Gulf Coast Bancorp, Inc. (the Company) as of August 31,
1997 and the related statements of operations, shareholders deficit and cash
flows for the period from May 1, 1997 (date of inception) to August 31, 1997.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements 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 financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Tarpon Coast
Bancorp, Inc. as of August 31, 1997, and the results of its operations and its
cash flows for the period from May 1, 1997 (date of inception) to August 31,
1997 in conformity with generally accepted accounting principles.
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
September 18, 1997, except for Note F,
as to which the date is December 23, 1997
F-2
<PAGE> 44
TARPON COAST BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
August 31, 1997
<TABLE>
<CAPTION>
November 30, 1997
August 31, 1997 (unaudited)
--------------- -----------------
<S> <C> <C>
A S S E T S
Cash and due from banks $ 179,874 $ 119,442
--------- ---------
TOTAL CASH AND CASH EQUIVALENTS 179,874 $ 119,442
--------- ---------
Equipment - NOTE B 10,666 75,188
Deferred offering costs 2,100 26,000
Prepaid expenses 7,095 1,575
Other assets 25,175 175
--------- ---------
$ 224,910 $ 222,380
========= =========
LIABILITIES AND SHAREHOLDERS DEFICIT
Liabilities:
Advances from organizers - Note C $ 307,000 $ 365,835
Accrued expenses and other liabilities 16,765 8,956
--------- ---------
TOTAL LIABILITIES 323,765 $ 374,791
--------- ---------
Shareholders Deficit:
Preferred stock, no stated par,
2,000,000 shares authorized; no shares
issued and outstanding -- --
Common stock, par value $.01 per share,
10,000,000 shares authorized;
100 shares issued and outstanding 1 1
Additional paid-in capital 999 999
Deficit accumulated during the
development stage (99,855) (153,411)
--------- ---------
TOTAL SHAREHOLDERS DEFICIT (98,855) (152,411)
--------- ---------
$ 224,910 $ 222,380
========= =========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 45
TARPON COAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period from May 1, 1997 (date of inception) to August 31, 1997
<TABLE>
<CAPTION>
Seven months
Four months ended
ended November 30, 1997
August 31, 1997 (unaudited)
--------------- -----------------
<S> <C> <C>
INCOME
Interest income $ 0 $ 2
EXPENSES
Consulting fees 42,000 84,000
Professional fees 44,890 46,707
Other expenses 12,965 22,706
-------- ---------
TOTAL EXPENSES 99,855 153,413
-------- ---------
NET LOSS $(99,855) $(153,411)
======== =========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 46
TARPON COAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS DEFICIT Period
from May 1, 1997 (date of inception) to August 31, 1997
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the Total
Common Paid-in Development Total November 30, 1997
Stock Capital Stage August 31, 1997 (unaudited)
------- ---------- ------------ --------------- -----------------
<S> <C> <C> <C> <C> <C>
Balance
May 1, 1997 $0 $ 0 $ 0 $ 0 $ 0
Proceeds from
issuance of
common stock 1 999 0 1,000 1,000
Net loss 0 0 (99,855) (99,855) (153,411)
-- ---- -------- --------- ---------
Balance (deficit)
August 31, 1997 $1 $999 $(99,855) $ (98,855 $(152,411)
== ==== ======== ========= =========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 47
TARPON COAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period from May 1, 1997 (date of inception) to August 31, 1997
<TABLE>
<CAPTION>
Seven months
Four months ended
ended November 30, 1997
August 31, 1997 (unaudited)
--------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (99,855) $(153,411)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation 288 759
Increase in prepaid expenses (7,095) (1,575)
Increase in other assets (27,275) (26,175)
Increase in accounts payable 16,765 8,956
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (117,172) (18,035)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (10,954) (75,947)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (10,954) (75,947)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 1,000 1,000
Proceeds from organizer advances 307,000 365,835
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 308,000 366,835
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 179,874 119,442
CASH AND CASH EQUIVALENTS
Beginning of period 0 0
--------- ---------
End of period $ 179,874 $ 119,442
========= =========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE> 48
TARPON COAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
August 31, 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization:
Tarpon Coast Bancorp, Inc. formerly known as Gulf Coast Bancorp, Inc.
(the Company) was incorporated under the laws of the state of Florida on August
7, 1997 with an initial capitalization of $1,000. The company is the successor
entity to Gulf Coast Community Partners, organized on May 1, 1997 as a general
partnership. The Company's activities to date have been limited to the
organization of Tarpon Coast National Bank formerly known as Gulf Coast
Community Bank, National Association, (the Bank), as well as preparation for a
$10,000,000 common stock offering (the Offering). A substantial portion of the
proceeds of the Offering will be used by the Company to provide the initial
capitalization of the Bank. The start-up of the Bank is contingent upon
receiving the approval of various banking regulatory authorities and also a
successful completion of the Offering.
Nature of Business:
The Bank intends to offer a full range of commercial and consumer
banking services primarily within the Port Charlotte and Punta Gorda, Florida
area.
Use of Estimates:
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents:
Cash, demand balances due from banks and interest bearing deposits in
banks are considered cash and cash equivalents for cash flow reporting
purposes.
Deferred Offering Costs:
Deferred offering costs consist of legal and accounting fees related
to the initial public stock offering and will be offset against the offering
proceeds when received.
F-7
<PAGE> 49
TARPON COAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 1997
NOTE B - EQUIPMENT
Equipment at August 31, 1997 consists of the following:
<TABLE>
<S> <C> <C>
EDP equipment $ 9,393
Construction in progress 1,561
--------
10,954
Less accumulated depreciation 288
--------
TOTAL $ 10,666
========
</TABLE>
Depreciation is computed on the straight-line method over the
estimated useful lives of the depreciable assets. Depreciation expense was $288
for the period ended August 31, 1997.
NOTE C - ADVANCES FROM ORGANIZERS
The Company arranged a series of advances from certain individual
organizers in the aggregate amount of $307,000 to pay organizational and
pre-opening expenses for the Bank and the Company. The foregoing advances bear
no interest and will be converted into the Company's common stock on the
closing date of the Offering. In the event that the Bank's charter is denied,
each Organizer will receive back only their pro rata share of monies remaining
in the organization expense account after all organizing expenses and expenses
related to closing down the organizational project are paid.
Subsequent to the balance sheet date, the Company obtained additional
advances from certain organizers in the aggregate amount of $58,835 to pay
additional expenses for the Bank and the Company. Terms of these advances are
the same as those previously disclosed above.
NOTE D - COMMITMENTS AND CONTINGENCIES
The Company has committed to lease a temporary facility to house its
main office location. The proposed lease has a term of one year with the option
to renew on a month-to-month basis at the current market rate; to begin on the
earlier of February 1, 1998 or 60 days from the date preliminary OCC approval
is obtained. The aggregate annual lease payment is $45,000 plus applicable
sales tax. The Company has also entered into a short-term lease for office
space to conduct its activities during the development stage. The lease has a
term of six months ending November 30, 1997 with the option for one 3-month
renewal period.
F-8
<PAGE> 50
TARPON COAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
August 31, 1997
NOTE D - COMMITMENTS AND CONTINGENCIES (CONTINUED)
The Company has entered into a contract to purchase 1.09 acres of land
for $875,000 to be used to build the Banks permanent facility; closing to occur
within 15 days of receiving FDIC and OCC approval but in any event no later
than January 30, 1998.
NOTE E - STOCK OPTIONS AND WARRANTS
The Board of Directors of the Company has reserved 125,000 shares of
common stock for issuance under an Incentive Stock Option Plan. The Board has
designated 60,000 of these shares for options to be granted to various
executive officers upon the execution of their respective employment
agreements. The shares are exercisable at $10.00 per share and in increments of
10% of the number of shares subject to the Option on each anniversary of the
date of grant until all shares subject to the Option have become exercisable,
with 10% of the shares becoming exercisable on the date of the grant.
The Board of Directors of the Company have also agreed to grant Stock
Purchase Warrants in consideration of the Organizers efforts in organizing the
Company and the Bank. The Company intends to issue warrants to purchase 0.34
shares of Common Stock for each share of Common Stock purchased by each
organizer from the Offering. The Warrants will vest in equal increments of 25%
commencing on the date of grant and on each anniversary date thereafter until
fully vested. Warrants may be exercised in whole or in part for $10.00 per
share beginning on the date of grant and expiring 10 years after the grant
date. The Company has reserved 96,443 shares of its Common Stock for issuance
thereunder.
NOTE F - SUBSEQUENT EVENT
As of December 23, 1997, the Company amended its Articles of
Incorporation to change its name from Gulf Coast Bancorp, Inc. to Tarpon Coast
Bancorp, Inc. The name change was executed solely to avoid potential trademark
infringement issues which were discovered subsequent to the original
incorporation and balance sheet date.
F-9
<PAGE> 51
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE IN THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIEF UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A 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. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS.
TABLE OF CONTENTS
Prospectus Summary.......................................................
Risk Factors.............................................................
Recent Developments .....................................................
Use of Proceeds..........................................................
Dividend Policy..........................................................
Capitalization...........................................................
Management's Discussion and Analysis of Financial Condition and
Results of Operations...................................................
Business.................................................................
Management...............................................................
Certain Transactions.....................................................
Principal Stockholders...................................................
Supervision and Regulation...............................................
Description of Capital Stock.............................................
Shares Eligible for Future Sale..........................................
Underwriting.............................................................
Legal Proceedings........................................................
Legal Opinions...........................................................
Experts..................................................................
Additional Information...................................................
Index to Financial Statements.........................................F-1
UNTIL ___________, 199__, ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON
STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION
OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
1,000,000 SHARES
TARPON COAST BANCORP, INC.
COMMON STOCK
PROSPECTUS
ROBERT W. BAIRD & CO.
INCORPORATED
______________, 199__
<PAGE> 52
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850, Florida Statutes, grants a corporation the power to
indemnify its directors, officers, employees, and agents for various expenses
incurred resulting from various actions taken by its directors, officers,
employees, or agents on behalf of the corporation. In general, if an individual
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the action was
unlawful, then the corporation has the power to indemnify said individual who
was or is a party to any proceeding (including, in the absence of an
adjudication of liability (unless the court otherwise determines), any
proceeding by or in the right of the corporation) against liability expenses,
including counsel fees, incurred in connection with such proceeding, including
any appeal thereof (and, as to actions by or in the right of the corporation,
against expenses and amounts paid in settlement not exceeding, in the judgment
of the board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof). To the extent that
a director, officer, employee, or agent has been successful on the merits or
otherwise in defense of any proceeding, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith. The term
"proceeding" includes any threatened, pending, or completed action, suit, or
other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Any indemnification in connection with the foregoing, unless pursuant to a
determination by a court, shall be made by the corporation upon a determination
that indemnification is proper in the circumstances because the individual has
met the applicable standard of conduct. The determination shall be made (i) by
the board of directors by a majority vote of a quorum consisting of directors
who are not parties to such proceeding; (ii) by majority vote of a committee
duly designated by the board of directors consisting solely of two or more
directors not at the time parties to the proceeding; (iii) by independent legal
counsel selected by the board of directors or such committee; or (iv) by the
shareholders by a majority vote of a quorum consisting of shareholders who are
not parties to such proceeding. Evaluation of the reasonableness of expenses and
authorization of indemnification shall be made in the same manner as the
determination that indemnification is permissible. However, if the determination
of permissibility is made by independent legal counsel, then the directors or
the committee shall evaluate the reasonableness of expenses and may authorize
indemnification. Expenses incurred by an officer or director in defending a
civil or criminal proceeding may be paid by the corporation in advance of the
final disposition of the proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount if he is ultimately found
not to be entitled to indemnification by the corporation. Expenses incurred by
other employees and agents may be paid in advance upon such terms or conditions
that the board of directors deems appropriate.
Section 607.0850 also provides that the indemnification and advancement of
expenses provided pursuant to that Section are not exclusive, and a corporation
may make any other or further indemnification or advancement of expenses of any
of its directors, officers, employees, or agents, under any bylaw, agreement,
vote of shareholders or disinterested directors, or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office. However, indemnification or advancement of expenses may not be made if a
judgment or other final adjudication established that the individual's actions,
or omissions to act, were material to the cause of action so adjudicated and
constitute (i) a violation of the criminal law (unless the individual had
reasonable cause to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful); (ii) a transaction from which the individual
derived an improper personal benefit; (iii) in the case of a director, a
circumstance under which the liability provisions of Section 607.0834 are
applicable; or (iv) willful misconduct or a conscious disregard for the
II-1
<PAGE> 53
best interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor in a proceeding by or in the
right of a shareholder. Indemnification and advancement of expenses shall
continue as, unless otherwise provided when authorized or ratified, to a person
who has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such person, unless
otherwise provided when authorized or ratified.
Section 607.0850 further provides that unless the corporation's articles
of incorporation provide otherwise, then notwithstanding the failure of a
corporation to provide indemnification, and despite any contrary determination
of the board or of the shareholders in the specific case, a director, officer,
employee, or agent of the corporation who is or was a party to a proceeding may
apply for indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice that it considers necessary, may order indemnification and
advancement of expenses, including expenses incurred in seeking court-ordered
indemnification or advancement of expenses, if it determines that (i) the
individual is entitled to mandatory indemnification under Section 607.0850 (in
which case the court shall also order the corporation to pay the director
reasonable expenses incurred in obtaining court-ordered indemnification or
advancement of expenses); (ii) the individual is entitled to indemnification or
advancement of expenses, or both, by virtue of the exercise by the corporation
of its power under Section 607.0850; or (iii) the individual is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether the person met the
standard of conduct set forth in Section 607.0850. Further, a corporation is
granted the power to purchase and maintain indemnification insurance.
Article VI of the Company's Articles of Incorporation and Article VI of
the Company's Bylaws provide for indemnification of the Company's officers and
directors and advancement of expenses. The text of the indemnification
provisions contained in the Company's Articles and Bylaws is set forth in
Exhibits 3.1 and 3.2, respectively, to this Registration Statement. Among other
things, indemnification is granted to each person who is or was a director,
officer or employee of the Company and each person who is or was serving at the
request of the Company as a director, officer or employee of another corporation
to the full extent authorized by law. Article VI of the Company's Bylaws also
sets forth certain conditions in connection with any advancement of expenses and
provision by the Company of any other indemnification rights and remedies. The
Company also is authorized to purchase insurance on behalf of any person against
liability asserted whether or not the Company would have the power to indemnify
such person under the Bylaws. Pursuant to such authority, the Company has
purchased directors and officers liability insurance although there is no
assurance that the Company will maintain such insurance or, if so, the amount of
insurance that it will so maintain.
Pursuant to the Underwriting Agreement, the Company and the Underwriters
have agreed to indemnify each other under certain circumstances and conditions
against and from certain liabilities, including liabilities under the Securities
Act of 1933, as amended. Reference is made to Section 10 of the Underwriting
Agreement filed as Exhibit 1.1 hereto.
II-2
<PAGE> 54
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 3,485
NASD Filing Fee............................................. 1,650
Transfer Agent and Registration Fees........................ 4,000
Printing and Engraving Expenses............................. 45,000
Accounting Fees and Expenses................................ 15,000
Legal Fees and Expenses..................................... 35,000
Blue Sky Fees and Expenses.................................. 31,000
Miscellaneous............................................... 5,000
---------
Total................................................... $ 140,135
---------
</TABLE>
* To be furnished by amendment
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On August 8, 1997, the Company issued 100 shares of Common Stock to its
Chief Executive Officer and President solely to facilitate the organization of
the Company. The foregoing sale of Common Stock by the Company was exempt from
the registration requirements of the Securities Act by operation of Section 4(2)
thereof, the provision which exempts private offerings. No underwriter or
independent selling agent was used and no compensation or commission were paid
in connection with the sale of Common Stock.
II-3
<PAGE> 55
ITEM 27. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
(a) NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
<S> <C> <C>
1.1 - Form of Underwriting Agreement *
3.1 - Articles of Incorporation *
3.2 - Articles of Amendment to Articles of
Incorporation *
3.3 - Bylaws *
4.1 - See Exhibits 3.1 and 3.2 for provisions of
the Articles of Incorporation and Bylaws of
the Company defining rights of holders of
the Company's Common Shares.
4.2 - Specimen Common Stock Certificate *
5 - Form of Legal Opinion of Smith, Mackinnon,
Greeley, Bowdoin & Edwards, P.A. with
respect to the validity of the Common Stock
being offered hereby *
10.1 - 1997 Stock Option Plan and Form of Stock
Option Agreement *
10.2 - Form of Employment Agreement to be entered
into between the Company and Lewis S. Albert
*
10.3 - Form of Employment Agreement to be entered
into between the Company and Todd H. Katz *
10.4 - Financial Facilities Lease Agreement dated
August 6, 1997 between the Company and SON
Corporation *
10.5 - Form of Stock Purchase Warrant *
10.6 - Real Estate Sales Agreement dated August 6,
1997 between GMRI, Inc. and the Company *
10.7 - Preorganization Agreement and Amendment
thereto between Company Organizers *
21 - List of subsidiaries of the Company *
23.1 - Consent of Hill, Barth & King, Inc.
23.2 - Consent of Smith, Mackinnon, Greeley,
Bowdoin & Edwards, P.A. (included in Exhibit
5) *
</TABLE>
II-4
<PAGE> 56
24 - Power of Attorney (contained in the
Signature Section of the Registration
Statement) *
27 - Financial Data Schedule *
* Previously filed
II-5
<PAGE> 57
ITEM 28. UNDERTAKINGS
The Registrant will provide to the Underwriter at the closing specified
in the underwriting agreement certificates in such denominations and registered
in such names as required by the underwriter to permit prompt delivery to each
purchaser.
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 whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of the
Registration Statement in reliance on Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Act shall be deemed part of the Registration Statement as of the time
it was declared effective; and
(2) For purposes of determining liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-6
<PAGE> 58
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 for filing on Form SB-2 and authorized this Amendment to
Registration Statement to be signed in its behalf by the undersigned, in the
City of Port Charlotte, State of Florida, on January 7, 1998.
TARPON COAST BANCORP, INC.
/s/ Lewis S. Albert
-------------------------------------------
Lewis S. Albert
Chairman and Chief Executive Officer
/s/ Todd H. Katz
-------------------------------------------
Todd H. Katz, Vice Chairman and President
II-7
<PAGE> 59
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ Lewis S. Albert
- ------------------------- Chairman of the Board, Chief January 7, 1998
Lewis S. Albert Executive Officer and Director,
(Principal Financial Officer and
Principal Accounting Officer)
/s/ Todd H. Katz
- ------------------------ Vice Chairman of the Board, January 7, 1998
Todd H. Katz President and Director
Mark O. Asperilla, M.D. Director
James R. Baker Director
Billie A. Barger Director
James C. Brown Director
Gerald P. Flagel, CPA, JD Director
Gina D. Hahn Director
Larry A. Tenbusch Director
By: /s/ Lewis S. Albert
----------------------------------------------
Lewis S. Albert, acting pursuant to Power of Attorney, has signed this
Amendment to Registration Statement for and on behalf of the persons
indicated above as such persons' true and lawful attorney-in-fact and in
their names, places and stead, in the capacities indicated above and on
the date indicated below.
January 7, 1998
</TABLE>
II-8
<PAGE> 1
EXHIBIT 23.1
CONSENT OF HILL, BARTH & KING, INC., INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on the Pre-Effective Amendment No. 2 to Form SB-2 and
related Prospectus of Tarpon Coast Bancorp, Inc. formerly known as Gulf Coast
Bancorp, Inc. for the registration of 1,150,000 shares of its common stock and
to the incorporation therein of our report dated September 18, 1997 except for
Note F, as to which the date is December 23, 1997 relating to the financial
statements of Tarpon Coast Bancorp, Inc. as of August 31, 1997 and for the
period from May 1, 1997 (date of inception) to August 31, 1997.
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
January 7, 1998
