FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- ----- EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 0-24683
FLORIDA BANKS, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 58-2364573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5210 BELFORT ROAD, SUITE 310
JACKSONVILLE, FL
32256
(Address of principal executive offices)
(904) 332-7772
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Title Outstanding
COMMON STOCK, $.01 PAR VALUE OUTSTANDING AT MARCH 31, 2000
PER SHARE 5,644,137
<PAGE>
<TABLE>
ITEM 1. FINANCIAL STATEMENTS
FLORIDA BANKS, INC.
CONDENSED BALANCE SHEETS (Unaudited)
- ----------------------------------------------------------------------------------------------------------------------
March 31, December 31,
2000 1999
ASSETS
<S> <C> <C>
CASH AND DUE FROM BANKS $10,121,809 $6,088,628
FEDERAL FUNDS SOLD AND REPURCHASE AGREEMENTS PURCHASED 28,632,000 19,870,000
--------------- ---------------
Total cash and cash equivalents 38,753,809 25,958,628
INVESTMENT SECURITIES:
Available for sale, at fair value (cost $33,843,378 and $28,681,760
at March 31, 2000, and December 31, 1999, respectively) 32,675,524 27,609,601
Held to maturity, at cost (fair value $2,023,880) 2,027,806
Other investments 901,800 901,800
LOANS:
Commercial real estate 82,919,438 69,260,661
Commercial 86,124,607 68,991,516
Residential mortgage 15,410,835 10,845,841
Consumer 6,601,089 7,245,919
Credit card and other loans 1,263,097 1,244,256
--------------- ---------------
Total loans 192,319,066 157,588,193
Allowance for loan losses (2,259,787) (1,858,040)
Net deferred loan fees (57,021) (71,341)
--------------- ---------------
Net loans 190,002,258 155,658,812
PREMISES AND EQUIPMENT, NET 2.460.359 2,440,818
ACCRUED INTEREST RECEIVABLE 1,294,925 1,021,175
DEFERRED INCOME TAXES, NET 4,660,619 4,365,270
OTHER ASSETS 195,769 185,497
--------------- ---------------
TOTAL ASSETS $272,972,869 $218,141,571
=============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
DEPOSITS:
Noninterest-bearing demand $29,976,207 $22,035,567
Interest-bearing demand 8,604,171 11,211,366
Regular savings 34,803,447 38,954,093
Money market accounts 1,576,406 1,593,930
Time $100,000 and over 74,272,577 51,538,664
Other time 62,509,864 33,772,060
--------------- ---------------
Total deposits 211,742,672 159,105,680
REPURCHASE AGREEMENTS SOLD 13,994,366 11,037,111
OTHER BORROWED FUNDS 7,228,891 7,242,352
ACCRUED INTEREST PAYABLE 1,227,298 615,549
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 508,095 905,024
--------------- ---------------
Total liabilities 234,701,322 178,906,716
--------------- ---------------
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; 30,000,000 shares authorized;
5,885,237 and 5,853,756 shares issued, respectively 58,852 58,538
Additional paid-in capital 46,380,287 46,219,104
Warrants 164,832 164,832
Accumulated deficit (deficit of $8,434,037
eliminated upon quasi-reorganization on December 31, 1995) (6,096,847) (5,680,069)
Treasury Stock, 241,100 and 135,100 shares at cost (1,506,836) (858,844)
Accumulated other comprehensive loss, net of tax (728,741) (668,706)
--------------- ---------------
Total shareholders' equity 38,271,547 39,234,855
--------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $272,972,869 $218,141,571
=============== ===============
</TABLE>
2
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<TABLE>
FLORIDA BANKS, INC.
CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
- ------------------------------------------------------------------------------------------
Three-Month Period Ended
March 31,
------------------------------
2000 1999
------------------------------
INTEREST INCOME:
<S> <C>
Loans, including fees $3,708,671
Investment securities 555,507 431,526
Federal funds sold 215,833 84,774
--------- ---------
Total interest income 4,480,011 2,126,761
--------- ---------
INTEREST EXPENSE:
Deposits 2,103,493 700,364
Repurchase agreements 171,559 112,730
Borrowed funds 99,475 19,109
------ ---------
Total interest expense 2,374,527 832,203
--------- ---------
NET INTEREST INCOME 2,105,484 1,294,558
PROVISION FOR LOAN LOSSES 370,128 65,000
--------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 1,735,356 1,229,558
--------- ---------
NONINTEREST INCOME:
Service fees 124,114 97,035
Loss on sale of available for sale investment (6,225)
Other noninterest income 32,687 18,669
--------- ---------
150,576 115,704
--------- ---------
NONINTEREST EXPENSES:
Salaries and benefits 1,685,341 1,141,682
Occupancy and equipment 353,676 146,937
Data processing 75,965 39,997
Other 447,416 378,783
--------- ---------
2,562,398 1,707,399
--------- ---------
LOSS BEFORE BENEFIT
FOR INCOME TAXES (676,466) (362,137)
BENEFIT FOR INCOME TAX (259,688) (137,383)
--------- ---------
NET LOSS $ (416,778) $(224,754)
========= =========
LOSS PER SHARE:
Basic $ (0.07) $ (0.04)
========== =========
Diluted $ (0.07) $ (0.04)
========== =========
</TABLE>
3
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<TABLE>
FLORIDA BANKS, INC.
CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
Accumulated
Warrants Other
Additional to Acquire Comprehensive
Common Stock Paid-In Common Accumulated Income (loss) Treasury
Shares Par Value Capital Stock Deficit Net of Tax Stock Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1999 5,852,756 58,528 46,709,114 164,832 (3,832,909) (11,716) 42,587,849
Comprehensive loss:
Net Loss (1,847,160) (1,847,160)
Unrealized gain on available
for sale investment securities,
net of tax of $396,270 (656,990) (656,990)
Comprehensive loss (2,504,150)
Exercise of stock options 1,000 10 9,990 10,000
Purchase of treasury stock (858,844) (858,844)
BALANCE, DECEMBER 31, 1999 5,853,756 58,538 46,219,104 164,832 (5,680,069) (668,706) (858,844) 39,234,855
Comprehensive loss:
Net loss (416,778) (416,778)
Unrealized gain on available
for sale investment securities,
net of tax of $36,796 (60,035) (60,035)
Comprehensive loss (476,813)
Issuance of common stock to
Employee Stock Purchase Plan 31,481 314 161,183 161,497
Purchase of treasury stock (647,992) (647,992)
--------- ------ ---------- -------- ----------- -------- --------- ----------
BALANCE, MARCH 31, 2000(Unaudited) 5,885,237 $58,852 $46,380,287 $164,832 ($6,096,847) ($728,741) $(1,506,836) $38,271,547
========= ====== ========== ======== =========== ======== ========= ==========
</TABLE>
4
<PAGE>
<TABLE>
FLORIDA BANKS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
Three Month Period Ended
March 31,
2000 1999
------ ----
OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (416,778) $ (224,754)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 146,648 55,570
Deferred income tax benefit (259,688) (137,383)
Loss on sale of securities 6,225
Amortization of premiums on investments, net (10,566) (22,359)
Provision for loan losses 370,128 65,000
Increase in accrued interest receivable (273,750) (221,881)
Increase (decrease) in accrued interest payable 610,749 71,718
Decrease in other assets (10,302) (35,522)
Decrease in other liabilities (396,929) (236,332)
---------- -----------
Net case used in operating activities (234,263) (685,943)
---------- -----------
INVESTING ACTIVITIES:
Proceeds from sales, paydowns and maturities
of available for sale investment securities 3,396,509 6,061,096
Purchase of investment securities:
Available for sale (8,557,038) (15,500,000)
Held to maturity (2,024,555)
Other investments (446,800)
Net increase in loans (34,713,574) (16,572,224)
Purchases of premises and equipment (166,189) (137,357)
---------- ----------
Net cash used in investing activities (42,064,847) (26,595,285)
---------- ----------
FINANCING ACTIVITIES:
Net increase in demand deposits,
money market accounts and savings accounts 1,165,275 5,053,048
Net increase in time deposits 51,471,717 13,764,623
Increase in repurchase agreements 2,957,255 12,890,845
Decrease in borrowed funds (13,461) 241,424
Purchase of treasury stock (647,992)
Proceeds from sale of common stock 161,497
---------- ----------
Net cash provided by financing activities 55,094,291 31,949,940
---------- ----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS 12,795,181 4,668,712
CASH AND CASH EQUIVALENTS:
Beginning of period 25,958,628 20,945,139
---------- ----------
End of period 38,753,809 25,613,851
========== ==========
SUPPLEMENTAL DISCLOSURES
OF CASH FLOW INFORMATION:
Cash paid for interest $ 1,763,778 $ 760,485
========== ==========
See notes to condensed financial statements.
</TABLE>
5
<PAGE>
FLORIDA BANKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 2000 AND 1999 (UNAUDITED)
- -------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
Florida Banks, Inc. (the "Company") was incorporated on October 15, 1997
for the purpose of becoming a bank holding company and acquiring First
National Bank of Tampa (the "Bank"). On August 4, 1998, the Company
completed its initial public offering and its merger (the "Merger") with
the Bank pursuant to which the Bank was merged with and into Florida Bank
No. 1, N.A., a wholly-owned subsidiary of the Company, and renamed Florida
Bank, N.A. Shareholders of the Bank received 1,375,000 shares of common
stock of the Company valued at $13,750,000. The Merger was considered a
reverse acquisition for accounting purposes, with the Bank identified as
the accounting acquiror. The Merger has been accounted for as a purchase,
but no goodwill has been recorded in the Merger and the financial
statements of the Bank have become the historical financial statements of
the Company.
The condensed financial statements have been prepared in accordance with
the rules and regulations of the Securities and Exchange Commission
related to interim financial statements. These unaudited condensed
financial statements do not include all disclosures provided in the annual
financial statements. The condensed financial statements should be read in
conjunction with the financial statements and notes thereto contained in
the Company's Registration Statement on Form S-1 as filed with the
Securities and Exchange Commission. All adjustments of a normal recurring
nature which, in the opinion of management, are necessary to fairly
present the results of the interim periods have been made. Results of
operations for the three month period ended March 31, 2000, are not
necessarily indicative of the results to be expected for the full year.
The consolidated financial statements include the accounts of the Company
and the Bank. All significant intercompany balances and transactions have
been eliminated in consolidation.
2. EARNINGS PER SHARE
The following is a reconciliation of the denominator used in the
computation of basic and diluted earnings per common share.
Three Month Period Ended
March 31,
------------------------
2000 1999
------------------------
Weighted average number of common
shares outstanding - Basic 5,692,689 5,858,756
Incremental shares from the assumed
conversion of stock options - -
--------- ---------
Total - Diluted 5,692,689 5,858,756
========= =========
6
<PAGE>
FLORIDA BANKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS ENDED
MARCH 31, 2000 AND 1999 (UNAUDITED) (Continued)
- -------------------------------------------------------------------------------
The exercise prices of stock options outstanding in the three month
periods ended March 31, 2000 and 1999 were above the fair market value of
the stock during those periods, therefore the options are considered
anti-dilutive for purposes of calculating the loss per share.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the financial
statements and related notes appearing elsewhere in this Form 10-Q.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999
The Company's net loss for the first quarter of 2000 increased $192,000 to
$417,000 for the three month period ending March 31, 2000, from net loss of
$225,000 for the three month period ended March 31, 1999. Basic loss per share
for the first quarter of 2000 was $.07 compared to basic loss per share of $.04
for the first quarter of 1999. The increase in the loss can be primarily
attributed to costs associated with the opening of the Pinellas County and
Broward county banking offices.
The increase in net interest income of $811,000 or 62.6%, to $2.1 million for
the first quarter of 2000 compared to $1.3 million the first quarter in 1999,
consists of an increase in interest income of $2.4 million, or 110.6%, and an
increase in interest expense of $1.5 million, or 185.3%. The increase in
interest income of $2.4 million in the first quarter of 2000 is primarily
attributable to an increase of $2.1 million in interest and fees on loans
resulting from the growth in the loan portfolio.
The provision for loan losses charged to operations increased $305,000 to
$370,000 for the first quarter of 2000 from $65,000 in the first quarter of
1999. This increase represents the additional reserves resulting from new loan
growth.
Non-interest income increased 30.1% or $35,000 to $151,000 for the three months
ended March 31, 2000 from $116,000 for the three months ended March 31, 1999.
The increase in non-interest income primarily resulted from an increase in
service fees to $124,000 at March 31, 2000 from $97,000 at March 31, 1999. The
increase in service fees resulted primarily from an increase in deposits.
Non-interest expense increased $855,000 or 50.0% to $2.6 million for the three
month period ended March 31, 2000 compared to $1.7 million for the three month
period ended March 31, 1999. The increase in non-interest expense resulted
primarily from increases in salaries and benefits, occupancy and equipment, and
other expenses. Salaries and benefits expenses increased $544,000 to $1.7
million for the first quarter of 2000 compared to $1.1 million for the first
quarter of 1999. This increase is the result of additional staff associated with
the new banking offices. The increase in occupancy and equipment expense of
$207,000, or 140.7%, resulted from the additional leased space for the
Jacksonville banking office and the Company, startup costs for the Pinellas
County and Broward County banking offices, and from additional depreciation and
maintenance expenses resulting from the purchase of additional furniture and
computer equipment. Data processing expenses increased $36,000 or 89.9% to
$76,000 for the three months ended March 31, 2000 as compared to $40,000 for the
same period in 1999. This increase resulted primarily from the additional
processing expenses for the Pinellas County and Broward County banking offices.
Other expenses increased $69,000, or 18.1% to $447,000 for the first quarter of
2000 compared to $379,000 for the first quarter of 1999. This increase is
primarily attributed to the additional operating expenses of the Pinellas County
and Broward County banking offices and the supporting operations. Specific
operational expenses which increased were communications, travel, stationery and
supplies, and consulting expenses.
8
<PAGE>
A benefit for income taxes of $260,000 was recognized for the three month period
ended March 31, 2000 as compared to a benefit for income taxes of $137,000 for
the same period ended March 31, 1999. These benefits for income taxes represent
an estimated effective annual tax rate of 38%.
FINANCIAL CONDITION
Total assets at March 31, 2000 were $272.9 million, an increase of $54.8 million
or 25.1%, from $218.1 million at December 31, 1999. The increase in total assets
primarily resulted from the investment of new deposit growth and other borrowed
funds in loans and investment securities. Federal Funds sold increased $8.8
million or 44.1% to $28.6 million at March 31, 2000 as compared to $19.9 million
at December 31, 1999. These assets represent short term reserves for future
funding of loan growth. Investment securities increased $7.1 million or 24.9% to
$35.6 million from $28.5 million at December 31, 1999. The increase in
investment securities reflects investment of the proceeds of deposit growth
during the first quarter in excess of loan growth.
Total loans increased $34.7 million, or 22.0%, to $192.3 million at March 31,
2000, from $157.6 million at December 31, 1999. The increase in total loans was
funded by increases in depository accounts. The allowance for loan losses
increased $402,000 or 21.6% for the first quarter of 2000. The increase resulted
from recoveries of previously charged-off loans of $31,000 and additional
provisions of $370,000, during the three month period ended March 31, 2000. The
allowance for loan losses as a percent of total loans was 1.18% at December 31,
1999 and 1.18% at March 31, 2000. Management believes that such allowance for
loan losses is sufficient to cover estimated losses in the Bank's loan
portfolio.
Deposits increased $52.6 million, or 33.1%, to $211.7 million at March 31, 2000
from $159.1 million at December 31, 1999. The increase in total deposits
resulted from an increase of $7.9 million or 36.0% in non-interest deposits, and
an increase of $51.5 million or 60.3% in time deposits, offset by a decrease of
$2.6 million or 23.2% in interest-bearing demand, a decrease of $4.2 million or
10.7% in savings deposits, and a decrease of $18,000 or 1.1% in money market
deposits. Time deposits often fluctuate in response to interest rate changes and
can vary rather significantly on a quarterly basis. The increase in time
deposits resulted primarily from an increase in brokered deposits, together with
an increase in time deposits issued through the Bank's internet banking
activities.
Shareholders' equity decreased by $963,000 to $38.3 million at March 31 2000,
from $39.2 million at December 31, 1999. This decrease is primarily the result
of operating losses from the opening of the Broward County and Pinellas County
banking offices, and the purchase of 106,000 shares of treasury stock at a cost
of $648,000.
Non-accrual loans increased $75,000 to $1,175,000 at March 31, 2000, compared to
$1,100,000 at December 31, 2000. The increase is the result of three additional
loans being changed from accrual to non-accrual status during the first quarter
of 2000.
LIQUIDITY
The Company, through its subsidiary, the Bank, has traditionally maintained
levels of liquidity above levels required by regulatory authorities. The Bank's
operational needs, demand for loan disbursements, and savings withdrawals can be
met by loan principal and interest payments received, new deposits, and excess
liquid assets. Significant loan demand, deposit withdrawal, increased
delinquencies and increased real estate acquired in settlement of loans could
alter this condition. Management does not foresee any liquidity problems for
2000.
9
<PAGE>
Liquidity and Sources of Capital
Liquidity is the Company's ability to meet all deposit withdrawals immediately,
while also providing for the credit needs of customers. The March 31, 2000
financial statements evidence a satisfactory liquidity position as total cash
and cash equivalents amounted to $38.8 million, representing 14.2% of total
assets. Investment securities amounted to $35.6 million, representing 13.0% of
total assets. These securities provide a secondary source of liquidity since
they can be converted into cash in a timely manner. The Company's ability to
maintain and expand its deposit base and borrowing capabilities are also a
source of liquidity. For the three-month period ended March 31, 2000, total
deposits increased from $159.1 million at December 31, 1999 to $211.7 million,
representing an increase of 33.1%. There can be no assurance that the Company
will be able to maintain this level of growth. The Company's management closely
monitors and maintains appropriate levels of interest earning assets and
interest bearing liabilities so that maturities of assets are such that adequate
funds are provided to meet customer withdrawals and loan demand. There are no
trends, demands, commitments, events or uncertainties that will result in, or
are reasonably likely to result in, the Company's liquidity increasing or
decreasing in any material way.
Management is committed to maintaining capital at a level sufficient to protect
depositors, provide for reasonable growth, and fully comply with all regulatory
requirements. Management's strategy to achieve this goal is to retain sufficient
earnings while providing a reasonable return on equity.
The table below illustrates the Bank's regulatory capital ratios at March 31,
2000:
March 31, Regulatory
Bank 2000 Requirement
---- --------- -----------
Tier 1 Capital 9.70% 4.00%
==== ====
Total risk-based capital ratio 10.82% 8.00%
===== ====
Leverage ratio 9.07% 4.00%
==== ====
Note that with respect to the leverage ratio, the OCC expects a minimum of 5.0
percent to 6.0 percent ratio for banks that are not rated CAMEL 1. Although the
Bank is not rated CAMEL 1, its leverage ratio of 9.07% is above the required
minimum.
10
<PAGE>
CAUTIONARY STATEMENT RELATING TO FORWARD LOOKING STATEMENTS
The foregoing Management's Discussion and Analysis contains various "forward
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs concerning future
events, including, but not limited to, statements regarding growth in sales of
the Company's products, profit margins and the sufficiency of the Company's cash
flow for its future liquidity and capital resource needs. These forward looking
statements are further qualified by important factors that could cause actual
results to differ materially from those in the forward looking statements.
Item 3. Qualitative and Quantitative Disclosures About Market Risk
The Company's financial performance is subject to risk from interest
rate fluctuations. This interest rate risk arises due to differences between the
amount of interest-earning assets and the amount of interest-earning liabilities
subject to repricing over a specified period and the amount of change in
individual interest rates. In the current interest rate environment, the
liquidity and maturity structure of the Company's assets and liabilities are
important to the maintenance of acceptable performance levels. A decreasing rate
environment negatively impacts earnings as the Company's rate-sensitive assets
generally reprice faster than its rate-sensitive liabilities. Conversely, in an
increasing rate environment, earnings are positively impacted. This
asset/liability mismatch in pricing is referred to as gap ratio and is measured
as rate sensitive assets divided by rate sensitive liabilities for a defined
time period. A gap ratio of 1.00 means that assets and liabilities are perfectly
matched as to repricing. Management has specified gap ratio guidelines for a one
year time horizon of between .80 and 1.20 years for the Bank. At March 31, 2000,
the Company had cumulative gap ratios of approximately 1.74 for the three month
time period and .92 for the one year period ending March 31, 2001. Thus, over
the next three month period, rate-sensitive assets will reprice faster than
rate-sensitive liabilities, and for the following nine month period, rate
sensitive liabilities will reprice faster than rate-sensitive assets.
Varying interest rate environments can create unexpected changes in prepayment
levels of assets and liabilities which are not reflected in the interest
sensitivity analysis. Prepayments may have significant effects on the Company's
net interest margin. Because of these factors and in a static test, interest
sensitivity gap reports may not provide a complete assessment of the Company's
exposure to changes in interest rates. Management utilizes computerized interest
rate simulation analysis to determine the Company's interest rate sensitivity.
The Company is in a liability sensitive gap position for the first year, then
moves into a matched position through the five year period. Overall, due to the
factors cited, current simulations results indicate a relatively low sensitivity
to parallel shifts in interest rates. A liability sensitive company will
generally benefit from a falling interest rate environment as the cost of
interest-bearing liabilities falls faster than the yields on interest-bearing
assets, thus creating a widening of the net interest margin. Conversely, an
asset sensitive company will benefit from a rising interest rate environment as
the yields on earning assets rise faster than the costs of interest-bearing
liabilities. Management also evaluates economic conditions, the pattern of
market interest rates and competition to determine the appropriate mix and
repricing characteristics of assets and liabilities required to produce a
targeted net interest margin.
In addition to the gap analysis, management uses rate shock simulation
to measure the rate sensitivity of its balance sheet. Rate shock simulation is a
modeling technique used to estimate the impact of changes in rates on the
Company's net interest margin. The Company measures its interest rate risk by
estimating the changes in net interest income resulting from instantaneous and
sustained parallel shifts in interest rates of plus or minus 200 basis points
over a period of twelve months. The Company's most recent rate shock simulation
analysis which was performed as of March 31, 2000, indicates that a 200 basis
point increase in rates would cause an increase in net interest income of
$595,000 over the next twelve month period. Conversely, a 200 basis point
decrease in rates would cause a decrease in net interest income of $666,000 over
a twelve month period.
11
<PAGE>
This simulation is based on management's assumption as to the effect of
interest rate changes on assets and liabilities and assumes a parallel shift of
the yield curve. It also includes certain assumptions about the future pricing
of loans and deposits in response to changes in interest rates. Further, it
assumes that delinquency rates would not change as a result of changes in
interest rates although there can be no assurance that this will be the case.
While this simulation is a useful measure of the Company's sensitivity to
changing rates, it is not a forecast of the future results and is based on many
assumptions, that if changed, could cause a different outcome. In addition, a
change in U.S. Treasury rates in the designated amounts accompanied by a change
in the shape of the Treasury yield curve would cause significantly different
changes to net interest income than indicated above.
At March 31, 2000, the Company was not engaged in trading activities or
the use of derivative instruments to manage interest rate risk.
Part II. Other Information
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
No disclosure required.
Item 3. Defaults Upon Senior Securities
No disclosure required.
Item 4. Submission of Matters to a Vote of Security Holders
No disclosure required.
Item 5. Other Information
No disclosure required.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibit is filed with this Report.
Exhibit No. Description
---------- -----------
27.1 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K. No report on Form 8-K was filed during the
quarter ended March 31, 2000.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Florida Banks, Inc.
Date: May 15, 2000 By: /s/ Charles E. Hughes, Jr.
----------------------------------
Charles E. Hughes, Jr.
President and Chief Executive Officer
Date: May 15, 2000 By: /s/ T. Edwin Stinson, Jr.
---------------------------------
T. Edwin Stinson, Jr.
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial
information extracted from the consolidated
financial statements of Florida Banks, Inc.
for the three month period from January 1, 2000
through March 31, 2000, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 1058802
<NAME> Florida Banks, Inc.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-2000
<PERIOD-START> Jan-01-2000
<PERIOD-END> Mar-31-2000
<CASH> 1,021,809
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 28,632,000
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<SHORT-TERM> 16,223,257
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<LONG-TERM> 5,000,000
0
0
<COMMON> 58,852
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<SECURITIES-GAINS> (6,225)
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<LOANS-NON> 1,174,714
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<ALLOWANCE-FOREIGN> 0
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</TABLE>
