<PAGE> 1
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
Commission file number 333-65101
FLORIDA BUSINESS BANCGROUP, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
FLORIDA 59-3517595
- --------------------------------- -------------------
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2202 North Westshore Boulevard, Suite 150
TAMPA, FLORIDA 33607
- ---------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(813) 281-0009
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
---------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED
SINCE LAST REPORT)
Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
YES [X] NO [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
COMMON STOCK, PAR VALUE $.01 PER SHARE 1,320,700 SHARES
- -------------------------------------- -----------------------------------
(CLASS) OUTSTANDING AT MARCH 31, 2000
Transitional Small Business Format (Check One): YES [ ] NO [X]
================================================================================
<PAGE> 2
FLORIDA BUSINESS BANCGROUP, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
At March 31, 2000 (Unaudited) and At December 31, 1999...................................................2
Condensed Consolidated Statements of Operations (Unaudited) -
Three Months ended March 31, 2000 and 1999...............................................................3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) -
Three Months ended March 31, 2000........................................................................4
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Three Months ended March 31, 2000 and 1999...............................................................5
Notes to Condensed Consolidated Financial Statements (Unaudited).........................................6-7
Review By Independent Certified Public Accountants.........................................................8
Report on Review by Independent Certified Public Accountants...............................................9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS............................................................................10-12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK..........................................13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS..................................................................................14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...................................................................14
SIGNATURES.....................................................................................................15
</TABLE>
1
<PAGE> 3
FLORIDA BUSINESS BANCGROUP, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and due from banks.............................................................. $ 909,115 129,671
Federal funds sold and securities sold under agreements to repurchase................ 9,655,422 7,783,000
----------- ------------
Total cash and cash equivalents........................................ 10,564,537 7,912,671
Securities available for sale........................................................ 3,411,973 3,411,722
Loans, net of allowance for loan losses of $80,970 and $24,300....................... 4,761,769 1,580,625
Federal Home Loan Bank stock......................................................... 24,500 --
Premises and equipment, net.......................................................... 630,093 560,201
Deferred income taxes................................................................ 347,241 248,041
--
Accrued interest receivable and other assets......................................... 271,440 298,325
------------ -----------
Total assets........................................................... $ 20,011,553 14,011,585
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest-bearing demand deposits.............................................. 276,544 87,800
Savings and NOW deposits......................................................... 1,761,869 453,484
Money market deposits............................................................ 633,950 361,573
Time deposits.................................................................... 4,670,953 211,069
----------- -------------
Total deposits......................................................... 7,343,316 1,113,926
Official checks.................................................................. 45,064 34,705
Accrued interest payable and other liabilities................................... 59,658 130,545
------------ -----------
Total liabilities...................................................... 7,448,038 1,279,176
---------- -----------
Stockholders' equity:
Preferred stock:
Designated Series A, $0.01 par value, redeemable at $100 per
share, 10,000 shares so designated, 900 issued and outstanding............ -- --
Nondesignated, no par value, 1,999,100 shares authorized,
none issued or outstanding................................................ -- --
Common stock, $.01 par value 10,000,000 shares authorized;
1,320,700 shares issued and outstanding..................................... 13,207 13,207
Additional paid-in capital........................................................... 13,130,921 13,130,921
Accumulated deficit.............................................................. (548,471) (381,107)
-- --
Accumulated other comprehensive income (loss).................................... (32,142) (30,612)
------------ -----------
Total stockholders' equity............................................. 12,563,515 12,732,409
---------- -----------
Total liabilities and stockholders' equity............................. $ 20,011,553 14,011,585
========== ===========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE> 4
FLORIDA BUSINESS BANCGROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
------------------
2000 1999
---- ----
<S> <C> <C>
Interest income:
Loans ........................................................................... $ 93,689 --
Securities ...................................................................... 54,129 --
Federal funds sold and securities sold under
agreements to repurchase ................................................... 105,689 --
----------- -----------
Total interest income .................................................. 253,507 --
Interest expense, deposits .......................................................... 39,324 --
----------- -----------
Net interest income ................................................... 214,183
Provision for loan losses ........................................................... 56,670 --
----------- -----------
Net interest income after provision for loan losses .................... 157,513 --
----------- -----------
Noninterest income:
Service charges and fees ........................................................ 1,967 --
Other income .................................................................... 393 969
----------- -----------
Total noninterest income ................................................ 2,360 969
----------- -----------
Total noninterest expenses:
Salaries and employee benefits .................................................. 180,980 32,098
Occupancy expenses .............................................................. 103,283 16,864
Advertising ..................................................................... 15,000
Professional fees ............................................................... 28,161 53,738
Data processing ................................................................. 44,960
Other expenses .................................................................. 53,170 30,684
----------- -----------
Total noninterest expenses .............................................. 425,554 133,384
----------- -----------
Loss before income tax benefit ...................................................... (265,681) (132,415)
Income tax benefit ...................................................... (98,317) (49,828)
----------- -----------
Net loss ............................................................................ $ (167,364) (82,587)
=========== ===========
Basic and diluted loss per share...................................... $ (.13) *
=========== ===========
Weighted-average number of common shares outstanding ................................ 1,320,700 *
=========== ===========
Dividends per share................................................................. $ -- --
=========== ===========
</TABLE>
* The Company was in its Organizational phase, earnings per share amounts are
not meaningful.
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE> 5
FLORIDA BUSINESS BANCGROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMMON STOCK ADDITIONAL COMPREHENSIVE TOTAL
------------------- PAID-IN ACCUMULATED INCOME STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT (LOSS) EQUITY
------ ------ ----------- ------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999......................... 1,320,700 $ 13,207 13,130,921 (381,107) (30,612) 12,732,409
----------
Comprehensive income (loss):
Net loss for the three Months ended March 31,
2000 (unaudited)............................ -- -- -- (167,364) -- (167,364)
Net change in unrealized loss on securities
available for sale, net tax of $883
(unaudited)................................. -- -- -- -- (1,530) (1,530)
----------
Comprehensive income (loss) (unaudited)......... -- -- -- -- -- (168,894)
--------- -------- ---------- -------- ------- ----------
Balance at March 31, 2000 (unaudited)................ 1,320,700 $ 13,207 13,130,921 (548,471) (32,142) 12,563,515
========= ======== ========== ======== ======= ==========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE> 6
FLORIDA BUSINESS BANCGROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
--------------------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss......................................................................... $ (167,364) (82,587)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation ................................................................ 36,268 --
Provision for loan losses ................................................... 56,670 --
Deferred income tax benefit ................................................. (98,317) (49,828)
Amortization of loan fees, premiums and discounts ........................... 8,804 --
Decrease (increase) in accrued interest receivable and other assets ......... 26,885 (17,807)
(Decrease) increase in accrued interest payable and other liabilities ....... (70,887) 8,435
------------ ------------
Net cash used in operating activities .............................. (207,941) (141,787)
------------ ------------
Cash flows from investing activities:
Net increase in loans ............................................................ (3,249,282) --
Purchase of Federal Home Loan Bank stock ......................................... (24,500) --
Purchase of premises and equipment ............................................... (106,160) (24,723)
------------ ------------
Net cash used in investing activities .............................. (3,379,942) (24,723)
------------ ------------
Cash flows from financing activities:
Net increase in deposits ......................................................... 6,229,390 --
Net increase in official checks .................................................. 10,359 --
Advances from organizers ......................................................... -- 200,000
------------ ------------
Net cash provided by financing activities .......................... 6,239,749 200,000
------------ ------------
Net increase in cash and cash equivalents ............................................ 2,651,866 33,490
Cash and cash equivalents at beginning of period ..................................... 7,912,671 16,272
------------ ------------
Cash and cash equivalents at end of period ........................................... $ 10,564,537 49,762
============ ============
Supplemental disclosure of cash flow information: Cash paid during the year for:
Interest ................................................................... $ 29,928 --
============ ============
Income taxes................................................................ $ -- --
============ ============
Noncash items:
Change in accumulated other comprehensive income (loss), net of tax......... $ (1,530) --
============ ============
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE> 7
FLORIDA BUSINESS BANCGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL. Florida Business BancGroup, Inc. (the "Holding Company") was
incorporated on May 18, 1998 in the State of Florida for the purpose of
operating as a one-bank holding company and owns 100% of the outstanding
shares of Bay Cities Bank (the "Bank"). The Holding Company's only business
is the ownership and operations of the Bank. The Bank is a
Florida-chartered commercial bank which opened for business November 10,
1999 (collectively, the "Company"). The Bank's deposits are insured by the
Federal Deposit Insurance Corporation. The Bank provides a variety of
community banking services to business and individuals in Hillsborough
County, Florida.
The Holding Company completed its public offering of 1,320,700 units,
consisting of one common share and one warrant, at $10 per unit on August
7, 1999. The Company incurred offering costs of $47,426 which were deducted
from the proceeds.
The Company's fiscal year end is December 31. In the opinion of the
management, the accompanying financial statements contain all adjustments
(consisting principally of normal recurring accruals) necessary to present
fairly the financial position at March 31, 2000, the results of operations
and cash flows for the three-month periods ended March 31, 2000 and 1999.
The results of operations for the three months ended March 31, 2000, are
not necessarily indicative of the results to be expected for the year
ending December 31, 2000.
(2) LOAN IMPAIRMENT AND LOSSES
At March 31, 2000 and 1999 there were no impaired loans. The activity in
the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
MARCH 31,
---------------------
2000 1999
---- ----
<S> <C> <C>
Balance at beginning of period........................................... $ 24,300 --
Provision for loan losses................................................ 56,670 --
------ -------
Balance at end of period................................................. $ 80,970 --
====== ========
</TABLE>
(3) LOSS PER SHARE
Basic and diluted loss per share are the same and have been computed on the
basis of the weighted-average number of shares of common stock outstanding.
The Company's common stock equivalents are not dilutive.
6
<PAGE> 8
FLORIDA BUSINESS BANCGROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(4) REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements administered
by various regulatory banking agencies. Failure to meet minimum capital
requirements can initiate certain mandatory and possibly additional
discretionary actions by regulators that, if undertaken, could have a
direct material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting
practices. The Bank's capital amounts and classification are also subject
to qualitative judgements by the regulators about components, risk
weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and percentages (set forth in
the table below) of total and Tier I capital (as defined in the
regulations) to risk-weighted assets (as defined), and of Tier I capital
(as defined) to average assets (as defined). Management believes, at March
31, 2000, that the Bank meets all capital adequacy requirements to which it
is subject.
As of March 31, 2000, the most recent notification from the regulatory
authorities categorized the Bank as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier I
risk-based, and Tier I leverage percentages as set forth in the table.
There are no conditions or events since that notification that management
believes have changed the Bank's category. The Bank's actual capital
amounts and percentages are also presented in the table (dollars in
thousands).
<TABLE>
<CAPTION>
TO BE WELL
MINIMUM CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES: ACTION PROVISIONS:
------------------- --------------------- ---------------------
AMOUNT % AMOUNT % AMOUNT %
------- ---- ---------- ----- --------- -----
<S> <C> <C> <C> <C> <C> <C>
AT MARCH 31, 2000:
Total capital (to Risk-
Weighted Assets)........... $ 7,672 92.0% $ 667 8.0% $ 834 10.0%
Tier I Capital (to Risk-
Weighted Assets)........... 7,591 91.0 333 4.0 500 6.0
Tier I Capital
(to Average Assets)........ 7,591 64.0 472 4.0 590 5.0
</TABLE>
(5) YEAR 2000 ISSUES
The Company's operating and financial systems have been found to be
compliant; the "Y2K Problem" has not adversely affected the Company's
operations nor does management expect that it will.
7
<PAGE> 9
FLORIDA BUSINESS BANCGROUP, INC.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Hacker, Johnson, Cohen & Grieb PA, the Company's independent certified public
accountants, have made a limited review of the financial data as of March 31,
2000, and for the three-month periods ended March 31, 2000 and 1999 presented in
this document, in accordance with standards established by the American
Institute of Certified Public Accountants.
Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.
8
<PAGE> 10
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Florida Business BancGroup, Inc.
Tampa, Florida:
We have reviewed the accompanying condensed consolidated balance sheet of
Florida Business BancGroup, Inc. (the "Company") as of March 31, 2000, and the
related condensed consolidated statements of operations and cash flows for the
three-month periods ended March 31, 2000 and 1999, and the condensed
consolidated statement of stockholders' equity for the three-month period ended
March 31, 2000. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1999, and the
related consolidated statements of earnings, stockholders' equity and cash flows
for the year then ended (not presented herein); and in our report dated January
21, 2000 we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1999, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
April 6, 2000
9
<PAGE> 11
FLORIDA BUSINESS BANCGROUP, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARISON OF MARCH 31, 2000 AND DECEMBER 31, 1999
GENERAL
Florida Business BancGroup, Inc. (the "Holding Company") was incorporated on May
18, 1998 in the State of Florida for the purpose of operating as a one-bank
holding company and owns 100% of the outstanding shares of Bay Cities Bank (the
"Bank"). The Holding Company's only business is the ownership and operations of
the Bank. The Bank is a Florida-chartered commercial bank which opened for
business November 10, 1999 (collectively, the "Company"). The Bank's deposits
are insured by the Federal Deposit Insurance Corporation. The Bank provides a
variety of community banking services to business and individuals in
Hillsborough County, Florida.
The Holding Company completed its public offering of 1,320,700 units, consisting
of one common share and one warrant, at $10 per unit on August 7, 1999. The
Company incurred offering costs of $47,426 which were deducted from the
proceeds.
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended March 31, 2000, the Company's primary sources of
funds consisted of deposit inflows. The Company used its capital resources
principally to fund existing and continuing loan commitments and to purchase
loan participations. At March 31, 2000, the Company had commitments to originate
loans totaling $3.7 million. Management believes the Company has adequate
resources to fund all its commitments and that substantially all of its existing
commitments will be funded in 2000. Management also believes that, if so
desired, it can adjust the rates on time deposits to retain deposits in a
changing interest rate environment.
As a Florida-chartered commercial bank, the Bank is required to maintain a
liquidity reserve of at least 15% of its total transaction accounts and 8% of
its total nontransaction accounts less those deposits of certain public funds.
The liquidity reserve may consist of cash on hand, cash on demand with other
correspondent banks and other investments and short-term marketable securities
as defined, such as federal funds sold and United States securities or
securities guaranteed by the United States. As of March 31, 2000, the Bank had
liquidity of approximately $13.7 million, or approximately 188% of total
deposits.
Management believes the Bank was in compliance with all minimum capital
requirements which it was subject to at March 31, 2000.
10
<PAGE> 12
FLORIDA BUSINESS BANCGROUP, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
The following ratios and rates are presented for the dates and periods
indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
2000 1999
--------------- ---------------
<S> <C> <C>
Average equity as a percentage
of average assets......................................... 74.27% 97.16%
Equity to total assets at end of period...................... 62.78% 90.87%
Return on average assets (1)................................. (3.94)% (7.56)%
Return on average equity (1)................................. (5.30)% (7.78)%
Noninterest expenses to average assets (1)................... 10.04% 20.64%
Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period............. --% --%
</TABLE>
- ------------
(1) Annualized for the three months ended March 31, 2000.
(continued)
11
<PAGE> 13
FLORIDA BUSINESS BANCGROUP, INC.
RESULTS OF OPERATIONS
The following table sets forth, for the period indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest income; (iv) interest-rate spread; and (v) net
interest margin.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------------------
2000
-------------------------------------------
INTEREST AVERAGE
AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE
------- --------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Loans (1)...................................................... $ 3,732 94 10.08%
Securities..................................................... 3,397 54 6.36
Other interest-earning assets (2).............................. 7,965 106 5.32
------ ---
Total interest-earning assets.............................. 15,094 254 6.73
---
Noninterest-earning assets........................................ 1,879
------
Total assets............................................... $ 16,973
====== --
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts.................... 1,353 9 2.66
Time deposits.................................................. 1,916 30 6.26
------ ----
Total interest-bearing liabilities......................... 3,269 39 4.77
----
Noninterest-bearing liabilities................................... 1,099
Stockholders' equity.............................................. 12,605
------ --
Total liabilities and stockholders' equity................. $ 16,973
======
Net interest income............................................... $ 215
=== -=
Interest-rate spread (3).......................................... 1.96%
====
Net interest margin (4)........................................... 5.70%
====
Ratio of average interest-earning assets to
average interest-bearing liabilities........................... 4.62
=======
</TABLE>
- --------------
(1) Includes loans on nonaccrual status.
(2) Includes Federal Home Loan Bank stock, federal funds sold and securities
purchased under agreements to resell.
(3) Interest-rate spread represents the difference between the average yield on
interest-earning assets and the average rate of interest-bearing
liabilities.
(4) Net interest margin is net interest income divided by average
interest-earning assets.
12
<PAGE> 14
FLORIDA BUSINESS BANCGROUP, INC.
COMPARISON OF THE THREE-MONTH PERIODS ENDED MARCH 31, 2000 AND 1999
GENERAL. Net loss for the three-months ended March 31, 2000 was $167,364
compared to $82,587 for 1999. The Bank commenced operations on November 10,
1999. At March 31, 2000, the Company had not achieved the asset size to
operate profitably.
INTEREST INCOME. Interest income was $253,507 for the three months ended
March 31, 2000. Interest income earned on loans was $93,689. The average
loan portfolio balance was $3.7 million for the three months ended March
31, 2000 and the average yield earned was 10.01%.
INTEREST EXPENSE. Interest expense was $39,324 for the three months ended
March 31, 2000. The average balance of interest-earning deposits was $3.2
million for the three months ended March 31, 2000 and the average cost was
4.77%.
PROVISION FOR LOAN LOSSES. The provision for loan losses is charged to
operations to increase the total allowance to a level deemed appropriate by
management and is based upon the volume and type of lending conducted by
the Company, industry standards, the amount of nonperforming loans and
general economic conditions, particularly as they relate to the Company's
market areas, and other factors related to the collectibility of the
Company's loan portfolio. The Company recorded a provision for loan losses
for the three months ended March 31, 2000 of $56,670 and the allowance for
loan losses was $80,970 at March 31, 2000. Management believes the
allowance is adequate at March 31, 2000.
NONINTEREST EXPENSE. Noninterest expense was $425,554 for the three months
ended March 31, 2000 compared to $133,384 for the three months ended March
31, 1999. This increase resulted from the commencement of banking
operations.
INCOME TAX BENEFIT. The income tax benefit for the three months ended March
31, 2000 was $98,317 (an effective rate of 37.0%) compared to $49,828 in
1999 (an effective rate of 37.6%)
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss from adverse changes in market prices and
rates. The Company's market risk arises primarily from interest rate risk
inherent in its lending and deposit taking activities. The Company has no
risk related to trading accounts, commodities or foreign exchange.
Management actively monitors and manages its interest rate risk exposure.
The primary objective in managing interest-rate risk is to limit, within
established guidelines, the adverse impact of changes in interest rates on
the Company's net interest income and capital, while adjusting the
Company's asset-liability structure to obtain the maximum yield-cost spread
on that structure. Management relies primarily on its asset-liability
structure to control interest rate risk. However, a sudden and substantial
increase in interest rates could adversely impact the Company's earnings,
to the extent that the interest rates borne by assets and liabilities do
not change at the same speed, to the same extent, or on the same basis.
There have been no significant changes in the Company's market risk
exposure since December 31, 1999.
13
<PAGE> 15
FLORIDA BUSINESS BANCGROUP, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Registrant has no pending legal proceedings as of March 31, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS. The following exhibits are filed with or incorporated by
reference into this report. The exhibits which are marked by a single
asterisk (*) were previously filed as a part of the Company?s Registration
Statement on Form SB-2, filed with the Securities and Exchange Commission
on September 30, 1998, Registration No. 333-65101; exhibits marked by a
double asterisk (**) were previously filed in Amendment No. 1 to
Registration Statement on Form SB-2; exhibits marked with a triple
asterisk (***) were previously filed in Amendment No. 2 to Registration
Statement on Form SB-2; and the exhibits marked with four asterisks (****)
were previously filed in Amendment No. 3 to Registration Statement on Form
SB-2.
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------
* 3.1 Articles of Incorporation of the Company
* 3.2 By-laws of the Company
* 4.1 Specimen Common Stock Certificate
* 4.2 Specimen Warrant Certificate
* 4.4 Warrant Plan
** 10.1 Employment Contract Timothy A. McGuire
* 10.2 Lease Agreement for Temporary Quarter
* 10.3 Servicing Agreement with M&I Data Services
**** 10.4 Lease Agreement for Permanent Office
27. Financial Data Schedule (for SEC use only)
(b) REPORTS ON FORM 8-K. Registrant did not file a Form 8-K during the
three months ended March 31, 2000.
14
<PAGE> 16
FLORIDA BUSINESS BANCGROUP, INC.
PART II. OTHER INFORMATION
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 BUSINESS BANCGROUP, INC.
(Registrant)
Date: May 4, 2000 By: /s/ A. BRONSON THAYER
---------------------------------
A. Bronson Thayer, Chairman and
Chief Executive Officer
Date: May 4, 2000 By: /s/ MARTI J. WARREN
---------------------------------
Marti J. Warren,
Principal Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR THE PERIOD ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> DEC-31-2000
<CASH> 909
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 9,655
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,412
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 4,843
<ALLOWANCE> 81
<TOTAL-ASSETS> 20,112
<DEPOSITS> 7,343
<SHORT-TERM> 0
<LIABILITIES-OTHER> 105
<LONG-TERM> 0
13
0
<COMMON> 0
<OTHER-SE> 12,551
<TOTAL-LIABILITIES-AND-EQUITY> 20,112
<INTEREST-LOAN> 94
<INTEREST-INVEST> 54
<INTEREST-OTHER> 106
<INTEREST-TOTAL> 254
<INTEREST-DEPOSIT> 39
<INTEREST-EXPENSE> 39
<INTEREST-INCOME-NET> 215
<LOAN-LOSSES> 57
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 426
<INCOME-PRETAX> (266)
<INCOME-PRE-EXTRAORDINARY> (266)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (167)
<EPS-BASIC> (.13)
<EPS-DILUTED> (.13)
<YIELD-ACTUAL> 5.70
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 24
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 81
<ALLOWANCE-DOMESTIC> 81
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
