<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE TRANSITION REPORT FROM _____ TO _____
Commission file number 0-23619
Tarpon Coast Bancorp, Inc.
--------------------------
(Exact name of small business issuer as specified in its charter)
Florida 65-0772718
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1490 Tamiami Trail
Port Charlotte, FL 33948
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(Address of principal executive offices)
941-629-8111
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant, as required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date.
Class Outstanding as of June 30, 2000
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Common Stock, $.01 par value 1,182,151
Transitional Small Business Disclosure Format: Yes[ ] No [X]
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TARPON COAST BANCORP, INC.
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
Balance Sheets as of June 30, 2000 and December 31, 1999 1
Statements of Operations for the Three Months
Ended June 30, 2000 and 1999 2
Statements of Operations for the Six Months
Ended June 30, 2000 and 1999 3
Statements of Cash Flows for the Six Months
Ended June 30, 2000 and 1999 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis 6
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 6. Exhibits and Reports on Form 8-K 8
SIGNATURES 8
EXHIBIT INDEX 8
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
TARPON COAST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
------------- -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 3,102,068 $ 2,224,990
Federal funds sold 3,700,000 --
------------ ------------
Total cash and cash equivalents 6,802,068 2,224,990
Securities available for sale 10,030,129 9,467,906
Loans 33,747,141 29,390,411
Less allowance for loan losses (443,486) (454,576)
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Net loans 33,303,655 28,935,835
Premises and equipment, net 4,340,753 3,123,866
Accrued interest & other assets 482,866 351,066
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Total assets $ 54,959,471 $ 44,103,663
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 7,838,468 $ 5,192,481
Interest bearing 33,781,598 24,292,246
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Total deposits 41,620,066 29,484,727
Customer Repurchase Agreements 4,260,777 5,309,717
Accrued interest & other liabilities 111,871 184,440
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Total liabilities 45,992,714 34,978,884
Shareholders' equity:
Common stock, par value $.01 per share,
10,000,000 shares authorized; 1,182,151 shares
issued and outstanding 11,821 11,821
Additional paid-in capital 10,940,915 10,940,915
Accumulated Deficit (1,797,696) (1,638,175)
Unrealized loss on securities available for sale (188,283) (189,782)
------------ ------------
Total shareholders' equity 8,966,757 9,124,779
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Total liabilities and shareholders' equity $ 54,959,471 $ 44,103,663
============ ============
</TABLE>
See accompanying notes to financial statements.
1
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TARPON COAST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended June 30,
2000 1999
----------- -----------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 688,505 $ 279,071
Interest on securities 148,093 148,389
Interest on federal funds sold 56,852 63,006
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Total interest income 893,450 490,466
Interest expense:
Interest on deposits 356,286 212,148
Interest on repurchase agreements 60,261 22,745
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Total interest expense 416,547 234,893
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Net interest income 476,903 255,573
Provision for loan losses 20,000 79,000
Net interest income after
provision for loan losses 456,903 176,573
Non-interest income 52,364 18,887
Non-interest expense:
Salaries and benefits 297,093 224,077
Occupancy and equipment expense 104,752 91,607
Other expense 199,123 153,424
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Total non-interest expense 600,968 469,108
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Net loss (91,701) (273,648)
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Other comprehensive income (loss) 10,473 (97,090)
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Comprehensive income (loss) $ (81,228) $ (370,738)
=========== ===========
Net loss per share $ (0.08) $ (0.23)
=========== ===========
Average shares outstanding 1,182,151 1,182,151
=========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE> 5
TARPON COAST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
2000 1999
----------- -----------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 1,318,400 $ 469,673
Interest on securities 289,370 266,446
Interest on federal funds sold 63,419 114,838
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Total interest income 1,671,189 850,957
Interest expense:
Interest on deposits 642,515 350,075
Interest on repurchase agreements 116,719 32,254
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Total interest expense 759,234 382,329
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Net interest income 911,955 468,628
Provision for loan losses 45,000 154,000
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Net interest income after
provision for loan losses 866,955 314,628
Non-interest income 86,325 31,359
Non-interest expense:
Salaries and benefits 563,900 419,495
Occupancy and equipment expense 196,674 145,975
Other expense 352,227 257,966
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Total non-interest expense 1,112,801 823,436
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Net loss (159,521) (477,449)
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Other comprehensive income (loss) 1,499 (115,921)
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Comprehensive income (loss) $ (158,022) $ (593,370)
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Net loss per share $ (0.13) $ (0.40)
=========== ===========
Average shares outstanding 1,182,151 1,182,151
=========== ===========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 6
TARPON COAST BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (159,521) $ (477,449)
Adjustments to reconcile net loss to net
Cash used in operating activities:
Depreciation 116,141 76,154
Provision for loan losses 45,000 154,000
(Increase) Decrease in accrued interest
and other assets (131,800) (173,164)
Increase (Decrease) in accrued interest
and other liabilities (72,569) 100,718
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Total adjustments (43,228) 157,708
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Net cash used in operating activities (202,749) (319,741)
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Cash flows from investing activities:
Net increase in loans (4,412,820) (10,349,719)
Purchases of securities available for sale (1,985,602) (5,609,374)
Maturities of securities available for sale 1,424,878 2,861,061
Purchases of premises and equipment (1,333,028) (895,889)
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Net cash used in investing activities (6,306,572) (13,993,921)
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Cash flows from financing activities:
Increase in deposits 12,135,339 11,776,236
(Decrease)Increase in customer repurchase
agreements (1,048,940) 1,872,533
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Net cash provided by financing activities 11,086,399 13,648,769
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Increase (Decrease) in cash and cash equivalents 4,577,078 (664,893)
Cash and cash equivalents, beginning of period 2,224,990 4,690,881
------------ ------------
Cash and cash equivalents, end of period $ 6,802,068 $ 4,025,988
============ ============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 754,656 $ 435,278
============ ============
</TABLE>
See accompanying notes to financial statements.
4
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TARPON COAST BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 2000
NOTE A - ORGANIZATION AND BASIS OF PRESENTATION
Organization:
Tarpon Coast Bancorp, Inc. (the "Company") was incorporated under the
laws of the state of Florida on August 7, 1997. Effective June 1, 1998, the
Company's new wholly owned subsidiary, Tarpon Coast National Bank (the "Bank")
received federal regulatory approval to commence its banking operations.
Contemporaneously, the Company became a registered bank holding company under
the Bank Holding Company Act of 1956, as amended. Until June 1, 1998, the
Company was in the development stage and its activities were limited to the
organization of the Bank, as well as the offering of $11,500,000 in common stock
(the "Offering"). Approximately $8.2 million of the proceeds of the Offering
have been used by the Company to provide for the capitalization of the Bank.
Also effective June 1, 1998, the Bank received approval from the Federal Deposit
Insurance Corporation (the "FDIC") for deposit insurance.
Basis of Presentation:
The accompanying unaudited consolidated financial statements include
the accounts of the Company. All inter-company accounts and transactions have
been eliminated in consolidation.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with instructions to Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary have been made for the fair presentation of the Company's consolidated
financial position and results of operations. Operating results for the
three-month and six-month periods ended June 30, 2000 are not necessarily
indicative of the results that may be expected for the year ended December 31,
2000.
5
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
The following is a discussion of the Company's financial condition and results
of operations for the period ended June 30, 2000:
FINANCIAL CONDITION
At June 30, 2000, the Company had approximately $46 million in deposits and $4.3
million in customer repurchase agreements as compared to $29.5 million and $5.3
million, respectively, at December 31, 1999. Stockholders equity comprised $9
million at June 30, 2000 compared to $9.1 million at December 31, 1999.
At June 30, 2000, the Company used these funds to generate $33.3 million in net
loans ($28.9 million at December 31, 1999) and approximately $5.7 million in
unfunded loan commitments. At June 30, 2000 it also held approximately $10
million ($9.5 million at December 31, 1999) in investment securities. At June
30, 2000, the Company had $4.3 million ($ 3.1 million at December 31, 1999) in
premises and equipment. The Company's remaining liquidity at June 30, 2000, less
current cash reserve requirements was invested in overnight federal funds of
$3.7 million.
RESULTS OF OPERATIONS
For the three-month period ended June 30, 2000, the Company reported a net loss
of $91,701, compared to $273,648 for the comparable period in 1999. Interest
income for the three-month period was $893,450 in 2000 and $490,466 in 1999 or a
yield on average earning assets of 7.81% and 6.76%, respectively. Net interest
income was $476,903 in 2000 and $255,573 in 1999 (net interest margins of 4.17%
and 3.52%, respectively) after deducting interest expense of $416,547 in 2000
and $234,893 in 1999 or an average rate paid on interest-bearing funds of 4.20%
and 4.06%, respectively. Rate variances between the comparable three-month
periods of 2000 and 1999 contributed approximately $74,000 to net interest
income while corresponding volume variances contributed approximately $147,000.
For the six-month period ended June 30, 2000, the Company reported a net loss of
$159,521, compared to $477,449 for the comparable period in 1999. Interest
income for the six-month period was $1,671,189 in 2000 and $850,957 in 1999 or a
yield on average earning assets of 7.78% and 6.73%, respectively. Net interest
income was $911,955 in 2000 and $468,628 in 1999 (net interest margins of 4.25%
and 3.71%, respectively) after deducting interest expense of $759,234 in 2000
and $382,329 in 1999 or an average rate paid on interest-bearing funds of 4.11%
and 3.93%, respectively. Rate variances between the comparable six-month periods
of 2000 and 1999 contributed approximately $115,000 to net interest income while
corresponding volume variances contributed approximately $328,000.
6
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As the Bank has limited historical loan loss experience, the provision for loan
losses of $20,000 and $45,000 for the three-month and six-month periods ended
June 30, 2000, respectively, has been based principally on peer industry data of
comparable commercial banks. In 1999, the provision for loan losses included an
additional provision of 0.5% for potential Year 2000 credit loss exposures.
Non-interest income, comprised principally of service charges on deposit
accounts, was $52,364 and 18,887 for the three-month periods ended June 30, 2000
and 1999, respectively, and $86,325 and $31,359 for the comparable six-month
periods. The increases are consistent with the increases in volume of deposit
activity.
Non-interest expenses for the comparable three-month periods were $600,968 and
469,108, comprised principally of salaries and benefits ($297,093 in 2000 and
$224,078 in 1999) and occupancy costs ($104,752 in 2000 and $91,607 in 1999).
For the comparable six-month periods ended June 30, 2000 and 1999, non-interest
expenses were $1,112,801 and $823,436, respectively, comprised principally of
salaries and benefits ($563,900 in 2000 and $419,495 in 1999) and occupancy
costs ($196,674 in 2000 and $145,975 in 1999). At June 30, 2000, the Company and
the Bank had 25 employees and two full-service banking facilities compared to 21
employees and one full-service banking facility a year earlier.
On June 1, 1999, the Bank opened a branch office in the City of North Port,
Sarasota County, Florida comprising approximately 1,100 square feet of rental
space at a monthly rental of $1,700. The Bank opened its permanent North Port
branch facility comprising approximately 3,300 square feet in April 2000. These
expansion activities have impacted the Company's results of operations by
generating net incremental losses of $91,473 and $152,537 for the three and
six-month periods ended June 30, 2000, respectively.
Management anticipates that the Company will continue to experience losses from
operations until such time as the volume of the operations of the Bank, together
with that of its expansion activities, achieve profitable levels.
7
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PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On April 24, 2000, the Company held its annual meeting of shareholders
during which Todd H. Katz, Vice Chairman of the Board and President, James R.
Baker, and Billie A. Barger, were re-elected to the Company's Board of Directors
to serve three-year terms. 1,136,716 or 96.1% of shares entitled to vote were
cast in favor of the measure with no dissenting votes. In addition to Messrs.
Katz, Baker and Barger, the following individuals serve as continuing directors
until their respective terms expire: Lewis S. Albert, Chairman and Chief
Executive Officer, Mark O. Asperilla, M.D., James C. Brown, Gerald P. Flagel,
CPA, Gina D. Hahn, and Larry A. Tenbusch. There were no other matters submitted
to a vote of security holders during the second quarter of 2000.
Item 6. Exhibits and Reports on Form 8-K
1. Exhibits
27.1 Financial Data Schedule
2. Reports on Form 8-K
The Company did not file a Current Report on Form 8-K during the
quarter ended June 30, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized.
Date: July 24, 2000 /s/ George E. Cline, III
------------------------
George E. Cline, III
Chief Financial Officer
Date: July 24, 2000 /s/ Lewis S. Albert
-------------------------
Lewis S. Albert
Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number
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27.1 Financial Data Schedule
8
