<PAGE> 1
===============================================================================
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 JUNE 30, 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 JULY 13, 2000
Transitional Small Business Format (Check One): YES [ ] NO [X]
===============================================================================
<PAGE> 2
FLORIDA BUSINESS BANCGROUP, INC.
INDEX
PART I. FINANCIAL INFORMATION
PAGE
----
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
At June 30, 2000 (Unaudited) and December 31, 1999..................2
Condensed Consolidated Statements of Operations (Unaudited) -
Three and Six Months ended June 30, 2000 and 1999...................3
Condensed Consolidated Statement of Stockholders' Equity
(Unaudited) - Six Months ended June 30, 2000........................4
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Six Months ended June 30, 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...........................10-15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS...............................................16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K................................17
SIGNATURES..................................................................18
1
<PAGE> 3
FLORIDA BUSINESS BANCGROUP, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 2000 1999
------------ -----------
(UNAUDITED)
<S> <C> <C>
Cash and due from banks .................................................... $ 1,404,862 129,671
Federal funds sold and securities sold under agreements to repurchase ...... 7,275,502 7,783,000
------------ -----------
Total cash and cash equivalents ......................... 8,680,364 7,912,671
Securities available for sale .............................................. 11,245,080 3,411,722
Loans, net of allowance for loan losses of $130,320 and $24,300 ............ 7,945,038 1,580,625
Federal Home Loan Bank stock ............................................... 24,500 --
Premises and equipment, net ................................................ 644,595 560,201
Deferred income taxes ...................................................... 443,327 248,041
Accrued interest receivable and other assets ............................... 392,579 298,325
------------ -----------
Total assets ............................................ $ 29,375,483 14,011,585
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest-bearing demand deposits .................................. 607,381 87,800
Savings and NOW deposits ............................................. 1,025,942 453,484
Money-market deposits ................................................ 5,036,909 361,573
Time deposits ........................................................ 10,182,690 211,069
------------ -----------
Total deposits .......................................... 16,852,922 1,113,926
Official checks ...................................................... 19,651 34,705
Accrued interest payable and other liabilities ....................... 97,293 130,545
------------ -----------
Total liabilities ....................................... 16,969,866 1,279,176
------------ -----------
Stockholders' equity:
Preferred stock:
Designated Series A, $.01 par value, redeemable at $100 per
share, 10,000 shares so designated, none issued or 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 .................................................. (696,212) (381,107)
Accumulated other comprehensive income (loss) ........................ (42,299) (30,612)
------------ -----------
Total stockholders' equity .............................. 12,405,617 12,732,409
------------ -----------
Total liabilities and stockholders' equity .............. $ 29,375,483 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 SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -----------------------
2000 1999 2000 1999
----------- -------- ---------- --------
<S> <C> <C> <C> <C>
Interest income:
Loans ........................................ $ 147,202 -- 240,891 --
Securities ................................... 112,504 -- 166,633 --
Federal funds sold and securities sold
under agreements to repurchase ......... 175,976 -- 281,665 --
----------- -------- ---------- --------
Total interest income ............. 435,682 -- 689,189 --
Interest expense, deposits ......................... 183,652 -- 222,976 --
----------- -------- ---------- --------
Net interest income ............... 252,030 -- 466,213 --
Provision for loan losses .......................... 49,350 -- 106,020 --
----------- -------- ---------- --------
Net interest income after provision
for loan losses ................. 202,680 -- 360,193 --
----------- -------- ---------- --------
Noninterest income:
Service charges and fees ..................... 5,781 -- 7,748 --
Other income ................................. 1,857 6 2,250 975
----------- -------- ---------- --------
Total noninterest income .......... 7,638 6 9,998 975
----------- -------- ---------- --------
Noninterest expenses:
Salaries and employee benefits ............... 180,686 59,031 361,666 91,129
Occupancy .................................... 101,078 33,670 204,361 52,534
Advertising .................................. 15,818 -- 30,818 --
Professional fees ............................ 47,006 22,614 75,167 76,352
Data processing .............................. 41,778 -- 86,738 --
Other expenses ............................... 61,643 17,543 114,813 46,227
----------- -------- ---------- --------
Total noninterest expenses ........ 448,009 132,858 873,563 266,242
----------- -------- ---------- --------
Loss before income tax benefit ..................... (237,691) (132,852) (503,372) (265,267)
Income tax benefit ................ (89,950) (49,992) (188,267) (99,820)
----------- -------- ---------- --------
Net loss ........................................... $ (147,741) (82,860) (315,105) (165,447)
=========== ======== ========== ========
Basic and diluted loss per share .. $ (.11) * (.24) *
=========== ======== ========== ========
Weighted-average number of common shares
outstanding .................................. 1,320,700 * 1,320,700 *
=========== ======== ========== ========
Dividends per share ................................ -- -- -- --
=========== ======== ========== ========
</TABLE>
* The Company was in its Organizational phase, 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
SIX MONTHS ENDED JUNE 30, 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 six months ended June 30,
2000 (unaudited) .................... -- -- -- (315,105) -- (315,105)
Net change in unrealized loss on securities
available for sale, net tax of $7,019
(unaudited) ......................... -- -- -- -- (11,687) (11,687)
-----------
Comprehensive income (loss) (unaudited) ... -- -- -- -- -- (326,792)
--------- ------- ---------- -------- ------- -----------
Balance at June 30, 2000 (unaudited) ............ 1,320,700 $13,207 13,130,921 (696,212) (42,299) 12,405,617
========= ======= ========== ======== ======= ===========
</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>
SIX MONTHS
ENDED JUNE 30,
---------------------------
2000 1999
------------ --------
<S> <C> <C>
Cash flows from operating activities:
Net loss .................................................................... $ (315,105) (165,447)
------------ --------
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation .......................................................... 75,234 5,957
Provision for loan losses ............................................. 106,020 --
Deferred income tax benefit ........................................... (188,267) (99,820)
Amortization of loan fees, premiums and discounts ..................... 59,635 --
Increase in accrued interest receivable and other assets .............. (94,254) (39,017)
(Decrease) increase in accrued interest payable and other liabilities.. (33,252) 124,380
------------ --------
Net cash used in operating activities ..................... (389,989) (173,947)
------------ --------
Cash flows from investing activities:
Net increase in loans ....................................................... (6,530,068) --
Net purchase of available for sale securities ............................... (7,852,064) --
Purchase of Federal Home Loan Bank stock .................................... (24,500) --
Purchase of premises and equipment .......................................... (159,628) (269,709)
------------ --------
Net cash used in investing activities ..................... (14,566,260) (269,709)
------------ --------
Cash flows from financing activities:
Net increase in deposits .................................................... 15,738,996 --
Net decrease in official checks ............................................. (15,054) --
Advances from organizers .................................................... -- 475,000
------------ --------
Net cash provided by financing activities ................. 15,723,942 475,000
------------ --------
Net increase in cash and cash equivalents ......................................... 767,693 31,344
Cash and cash equivalents at beginning of period .................................. 7,912,671 16,272
------------ --------
Cash and cash equivalents at end of period ........................................ $ 8,680,364 47,616
============ ========
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest .............................................................. $ 192,340 --
============ ========
Income taxes .......................................................... $ -- --
============ ========
Noncash items:
Change in accumulated other comprehensive income (loss), net of tax ... $ 11,687 --
============ ========
</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 June 30,
2000, the results of operations for the three- and six-month
periods ended June 30, 2000 and 1999 and the cash flows for the six
months ended June 30, 2000 and 1999. The results of operations for
the three and six months ended June 30, 2000, are not necessarily
indicative of the results to be expected for the year ending
December 31, 2000.
(2) LOAN IMPAIRMENT AND LOSSES
At June 30, 2000 and 1999 there were no impaired loans. The activity in
the allowance for loan losses is as follows:
JUNE 30,
-----------------
2000 1999
---- ----
Balance at beginning of period........... $ 24,300 -
Provision for loan losses................ 106,020 -
--------- ----
Balance at end of period................. $ 130,320 -
========= ====
(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 June 30, 2000, that the Bank
meets all capital adequacy requirements to which it is subject.
As of June 30, 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 JUNE 30, 2000:
Total capital (to Risk-
Weighted Assets) ....... $7,547 37.23% $1,621 8.00% $2,027 10.00%
Tier I Capital (to Risk-
Weighted Assets) ....... 7,417 36.59 811 4.00 1,216 6.00
Tier I Capital
(to Average Assets) .... 7,417 26.51 1,119 4.00 1,399 5.00
</TABLE>
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 June 30,
2000, and for the three- and six-month periods ended June 30, 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 June 30, 2000, and
the related condensed consolidated statements of operations for the three- and
six- month periods ended June 30, 2000 and 1999, the related statements of cash
flows for the six-month periods ended June 30, 2000 and 1999, and the condensed
consolidated statement of stockholders' equity for the six-month period ended
June 30, 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 operations, 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
July 11, 2000
9
<PAGE> 11
FLORIDA BUSINESS BANCGROUP, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARISON OF JUNE 30, 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 six months ended June 30, 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, to purchase loan
participations and purchase investments. At June 30, 2000, the Company had
commitments to originate loans and unfunded lines of credit totaling $13.6
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 June 30, 2000, the Bank had
liquidity of approximately $19.6 million, or approximately 93% of total
deposits.
Management believes the Bank was in compliance with all minimum capital
requirements which it was subject to at June 30, 2000. See note 4 to the
condensed consolidated financial statements.
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>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
---------- ------------
<S> <C> <C>
Average equity as a percentage
of average assets....................................... 60.12% 97.16%
Equity to total assets at end of period.................... 42.23% 90.87%
Return on average assets (1)............................... (3.00)% (7.56)%
Return on average equity (1)............................... (5.00)% (7.78)%
Noninterest expenses to average assets (1)................. 8.34% 20.64%
Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period........... - % - %
</TABLE>
------------------
(1) Annualized for the six months ended June 30, 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 JUNE 30,
----------------------------------
2000
----------------------------------
INTEREST AVERAGE
AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE
-------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Loans ............................................................ $ 6,014 147 9.78%
Securities.......................................................... 6,731 114 6.72
Other interest-earning assets (1)................................... 11,358 176 6.20
-------- ----
Total interest-earning assets................................... 24,103 436 7.24
----
Noninterest-earning assets............................................. 1,519
--------
Total assets.................................................... $ 25,622
========
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts......................... 3,681 38 4.13
Time deposits....................................................... 8,922 146 6.55
-------- ----
Total interest-bearing liabilities.............................. 12,603 184 5.84
----
Noninterest-bearing liabilities........................................ 414
Stockholders' equity................................................... 12,605
--------
Total liabilities and stockholders' equity...................... $ 25,622
========
Net interest income.................................................... $252
====
Interest-rate spread (2)............................................... 1.40%
====
Net interest margin (3)................................................ 4.18%
====
Ratio of average interest-earning assets to
average interest-bearing liabilities................................ 1.91
====
</TABLE>
------------------
(1) Includes Federal Home Loan Bank stock, federal funds sold and
securities purchased under agreements to resell.
(2) Interest-rate spread represents the difference between the average
yield on interest-earning assets and the average rate of
interest-bearing liabilities.
(3) Net interest margin is net interest income divided by average
interest-earning assets.
12
<PAGE> 14
FLORIDA BUSINESS BANCGROUP, INC.
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>
SIX MONTHS ENDED JUNE 30,
--------------------------------
2000
--------------------------------
INTEREST AVERAGE
AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE
------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Loans............................................................... $ 4,873 241 9.89%
Securities.......................................................... 5,085 167 6.57
Other interest-earning assets (1)................................... 9,851 281 5.70
------ ----
Total interest-earning assets................................... 19,809 689 6.96
----
Noninterest-earning assets............................................. 1,148
-------
Total assets.................................................... $20,957
=======
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts......................... 2,517 48 3.81
Time deposits....................................................... 5,419 175 6.46
------- ----
Total interest-bearing liabilities.............................. 7,936 223 5.62
----
Noninterest-bearing liabilities........................................ 416
Stockholders' equity................................................... 12,605
-------
Total liabilities and stockholders' equity...................... $20,957
=======
Net interest income.................................................... $466
====
Interest-rate spread (2)............................................... 1.34%
====
Net interest margin (3)................................................ 4.70%
====
Ratio of average interest-earning assets to average
interest-bearing liabilities........................................ 2.50
====
</TABLE>
------------------
(1) Includes Federal Home Loan Bank stock, federal funds sold and
securities purchased under agreements to resell.
(2) Interest-rate spread represents the difference between the average
yield on interest-earning assets and the average rate of
interest-bearing liabilities.
(3) Net interest margin is net interest income divided by average
interest-earning assets.
13
<PAGE> 15
FLORIDA BUSINESS BANCGROUP, INC.
COMPARISON OF THE THREE-MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
GENERAL. Net loss for the three-months ended June 30, 2000 was $147,741 compared
to $82,860 for 1999. The Bank commenced operations on November 10, 1999.
At June 30, 2000, the Company had not achieved the asset size necessary to
operate profitably.
INTEREST INCOME. Interest income was $435,682 for the three months ended June
30, 2000. Interest income earned on loans was $147,202. The average loan
portfolio balance was $6.0 million for the three months ended June 30,
2000 and the average yield earned was 9.78%.
INTEREST EXPENSE. Interest expense was $183,652 for the three months ended June
30, 2000. The average balance of interest-earning deposits was $12.6
million for the three months ended June 30, 2000 and the average cost was
5.84%.
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 June 30, 2000 of $49,350 and the allowance for
loan losses was $130,320 at June 30, 2000. Management believes the
allowance for loan losses is adequate at June 30, 2000.
NONINTEREST EXPENSE. Noninterest expense was $448,009 for the three months ended
June 30, 2000 compared to $132,858 for the three months ended June 30,
1999. This increase resulted from the commencement of banking operations.
INCOME TAX BENEFIT. The income tax benefit for the three months ended June 30,
2000 was $89,950 (an effective rate of 38%) compared to $49,992 in 1999
(an effective rate of 38%). Management believes it is more likely than not
that the benefit and deferred tax asset recognized will be realized in
future periods.
14
<PAGE> 16
FLORIDA BUSINESS BANCGROUP, INC.
COMPARISON OF THE SIX-MONTH PERIODS ENDED JUNE 30, 2000 AND 1999
GENERAL. Net loss for the six-months ended June 30, 2000 was $315,105 compared
to $165,447 for 1999. The Bank commenced operations on November 10, 1999.
At June 30, 2000, the Company had not achieved the asset size necessary to
operate profitably.
INTEREST INCOME. Interest income was $689,189 for the six months ended June 30,
2000. Interest income earned on loans was $240,891. The average loan
portfolio balance was $4.9 million for the six months ended June 30, 2000
and the average yield earned was 9.89%.
INTEREST EXPENSE. Interest expense was $222,976 for the six months ended June
30, 2000. The average balance of interest-earning deposits was $7.9
million for the six months ended June 30, 2000 and the average cost was
5.62%.
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 six months ended June 30, 2000 of $106,020 and the allowance for
loan losses was $130,320 at June 30, 2000. Management believes the
allowance is adequate at June 30, 2000.
NONINTEREST EXPENSE. Noninterest expense was $873,563 for the six months ended
June 30, 2000 compared to $266,242 for the six months ended June 30, 1999.
This increase resulted from the commencement of banking operations.
INCOME TAX BENEFIT. The income tax benefit for the six months ended June 30,
2000 was $188,267 (an effective rate of 38%) compared to $99,820 in 1999
(an effective rate of 38%). Management believes it is more likely than not
that the benefit and deferred tax asset recognized will be realized in
future periods.
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<PAGE> 17
FLORIDA BUSINESS BANCGROUP, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Registrant has no pending legal proceedings as of June 30, 2000.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders (the "Annual Meeting") of Florida Business
Bancgroup, Inc., Inc., was held on April 18, 2000, to consider the election of
eleven directors. Shareholders elected eleven directors with terms expiring at
the Annual Meeting in 2002, 2003 and 2004. The shareholders also voted upon the
adoption of the 2000 key employee stock compensation program, the adoption of
the 2000 directors' stock option plan and the ratification of the independent
auditors.
At the Annual Meeting, 1,013,330 shares were present in person or by proxy.
Listed below are the directors that were elected at the Annual Meeting, there
terms and a summary of the votes cast for each nominee:
TERM
CLASS I EXPIRING FOR AGAINST ABSTAIN
------- -------- --------- ------ -------
Johnny R. Adcock 2001 1,013,330 - -
Jeff Huenink 2001 1,013,330 - -
Eiji Sadato 2001 1,013,330 - -
A. Bronson Thayer 2001 1,013,330 - -
CLASS II
--------
John c. Bierley 2002 1,013,330 - -
John B. Caswell 2002 1,013,330 - -
Robert A. Monroe 2002 1,013,330 - -
Eric C. Newman 2002 1,013,330 - -
CLASS III
---------
Frank G. Cisners 2003 1,013,330 - -
Lawrence H. Dimmitt 2003 1,013,330 - -
Timothy McGuire 2003 1,013,330 - -
The shareholder vote on the three other matters considered at the meeting was as
follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NONVOTE
--------- ------- ------- -------
<S> <C> <C> <C> <C>
Adoption of the 2000 key employee stock 989,830 15,000 - 8,500
The adoption of the 2000 directors' stock option plan 988,830 15,000 1,000 8,500
Ratification of the independent auditors 1,012,330 - 1,000 -
</TABLE>
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<PAGE> 18
FLORIDA BUSINESS BANCGROUP, INC.
PART II. OTHER INFORMATION
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. The exhibits marked with five
asterisks (*****) were previously filed as part of the Company's
Definitive Form 14-A, filed with the Securities and Exchange Commission
on March 13, 2000.
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
***** 10.5 2000 Key Employee Stock Compensation Program
***** 10.6 2000 Directors' Stock Option Plan
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 June 30, 2000.
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<PAGE> 19
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: August 2, 2000 By: /s/ A. Bronson Thayer
------------------------------------
A. Bronson Thayer, Chairman and
Chief Executive Officer
Date: August 2, 2000 By: /s/ Marti J. Warren
------------------------------------
Marti J. Warren, Principal Financial
Officer
18
