<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 SEPTEMBER 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 SEPTEMBER 30, 2000
Transitional Small Business Format (Check One): YES [ ] NO [X]
===============================================================================
<PAGE> 2
FLORIDA BUSINESS BANCGROUP, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets -
At September 30, 2000 (Unaudited) and December 31, 1999..................... 2
Condensed Consolidated Statements of Operations (Unaudited) -
Three and Nine Months ended September 30, 2000 and 1999..................... 3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) -
Nine Months ended September 30, 2000........................................ 4
Condensed Consolidated Statements of Cash Flows (Unaudited) -
Nine Months ended September 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 6. EXHIBITS AND REPORTS ON FORM 8-K........................................ 16
SIGNATURES......................................................................... 17
</TABLE>
1
<PAGE> 3
FLORIDA BUSINESS BANCGROUP, INC.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------ -----------
(UNAUDITED)
<S> <C> <C>
ASSETS
Cash and due from banks ................................................... $ 829,372 129,671
Federal funds sold and securities sold under agreements to repurchase ..... 4,016,520 7,783,000
------------ -----------
Total cash and cash equivalents ........................... 4,845,892 7,912,671
Securities available for sale ............................................. 11,356,413 3,411,722
Loans, net of allowance for loan losses of $226,770 and $24,300 ........... 15,037,970 1,580,625
Federal Home Loan Bank stock .............................................. 24,500 --
Premises and equipment, net ............................................... 621,324 560,201
Deferred income taxes ..................................................... 470,481 248,041
Accrued interest receivable and other assets .............................. 414,427 298,325
------------ -----------
Total assets .............................................. $ 32,771,007 14,011,585
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Noninterest-bearing demand deposits .................................. 1,615,064 87,800
Savings and NOW deposits ............................................. 926,700 453,484
Money-market deposits ................................................ 5,618,725 361,573
Time deposits ........................................................ 11,998,371 211,069
------------ -----------
Total deposits ............................................ 20,158,860 1,113,926
Official checks ...................................................... 105,913 34,705
Accrued interest payable and other liabilities ....................... 141,904 130,545
------------ -----------
Total liabilities ......................................... 20,406,677 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 .................................................. (813,117) (381,107)
Accumulated other comprehensive income (loss) ........................ 33,319 (30,612)
------------ -----------
Total stockholders' equity ................................ 12,364,330 12,732,409
------------ -----------
Total liabilities and stockholders' equity ................ $ 32,771,007 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ -----------------------
2000 1999 2000 1999
----------- -------- ---------- --------
<S> <C> <C> <C> <C>
Interest income:
Loans ....................................... $ 304,445 -- 545,336 --
Securities .................................. 191,982 -- 358,615 --
Federal funds sold and securities sold
under agreements to repurchase ........ 89,345 189,149 371,010 190,124
----------- -------- ---------- --------
Total interest income ............. 585,772 189,149 1,274,961 190,124
Interest expense, deposits ....................... 251,347 -- 474,323 --
----------- -------- ---------- --------
Net interest income ............... 334,425 189,149 800,638 190,124
Provision for loan losses ........................ 96,450 -- 202,470 --
----------- -------- ---------- --------
Net interest income after provision
for loan losses ................. 237,975 189,149 598,168 190,124
----------- -------- ---------- --------
Noninterest income:
Service charges and fees .................... 11,114 -- 18,862 --
Other income ................................ 381 -- 2,631 --
----------- -------- ---------- --------
Total noninterest income .......... 11,495 -- 21,493 --
----------- -------- ---------- --------
Noninterest expenses:
Salaries and employee benefits .............. 198,805 57,997 560,471 149,126
Occupancy ................................... 105,247 30,653 309,608 83,187
Advertising ................................. 15,000 -- 45,818 --
Professional fees ........................... 18,858 56,327 94,025 132,678
Data processing ............................. 39,073 -- 125,811 --
Other expenses .............................. 62,110 63,993 176,923 110,222
----------- -------- ---------- --------
Total noninterest expenses ........ 439,093 208,970 1,312,656 475,213
----------- -------- ---------- --------
Loss before income tax benefit ................... (189,623) (19,821) (692,995) (285,089)
Income tax benefit ................ (72,718) (7,459) (260,985) (107,279)
----------- -------- ---------- --------
Net loss ......................................... $ (116,905) (12,362) (432,010) (177,810)
=========== ======== ========== ========
Basic and diluted loss per share... $ (.09) * (.33) *
=========== ======== ========== ========
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
NINE MONTHS ENDED SEPTEMBER 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 nine months ended September
30, 2000 (unaudited) .................. -- -- -- (432,010) -- (432,010)
Net change in unrealized loss on securities
available for sale, net tax of $38,545
(unaudited) ........................... -- -- -- -- 63,931 63,931
-----------
Comprehensive income (loss) (unaudited) .... -- -- -- -- -- (368,079)
--------- ------- ---------- -------- ------- -----------
Balance at September 30, 2000 (unaudited) ........ 1,320,700 $13,207 13,130,921 (813,117) 33,319 12,364,330
========= ======= ========== ======== ======= ===========
</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>
NINE MONTHS
ENDED SEPTEMBER 30,
----------------------------
2000 1999
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss .................................................................. $ (432,010) (177,810)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation ........................................................ 116,217 16,865
Provision for loan losses ........................................... 202,470 --
Deferred income tax benefit ......................................... (260,985) (107,279)
Amortization of loan fees, premiums and discounts ................... 86,813 --
Increase in accrued interest receivable and other assets ............ (116,102) (38,885)
Increase in accrued interest payable and other liabilities .......... 11,359 179,644
------------ -----------
Net cash used in operating activities ..................... (392,238) (127,465)
------------ -----------
Cash flows from investing activities:
Net increase in loans ..................................................... (13,746,628) --
Net purchase of available for sale securities ............................. (7,868,854) --
Principal paydowns on available for sale securities ....................... 26,639 --
Purchase of Federal Home Loan Bank stock .................................. (24,500) --
Purchase of premises and equipment ........................................ (177,340) (313,011)
------------ -----------
Net cash used in investing activities ..................... (21,790,683) (313,011)
------------ -----------
Cash flows from financing activities:
Net increase in deposits .................................................. 19,044,934 --
Net decrease in official checks ........................................... 71,208 --
Repayments of advances from organizers .................................... -- (100,000)
Redemption of designated Series A preferred stock ......................... -- (90,000)
Issuance of common stock .................................................. -- 13,159,574
------------ -----------
Net cash provided by financing activities ................. 19,116,142 12,969,574
------------ -----------
Net (decrease) increase in cash and cash equivalents ........................... (3,066,779) 12,529,098
Cash and cash equivalents at beginning of period ............................... 7,912,671 16,272
------------ -----------
Cash and cash equivalents at end of period ..................................... $ 4,845,892 12,545,370
============ ===========
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest ............................................................ $ 438,703 --
============ ===========
Income taxes ........................................................ $ -- --
============ ===========
Noncash items:
Change in accumulated other comprehensive income, net of tax ........ $ 63,931 --
============ ===========
</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 $62,872 which
were deducted from the proceeds.
The Company's fiscal year end is December 31. In the opinion of the
management, the accompanying condensed consolidated financial
statements contain all adjustments (consisting principally of normal
recurring accruals) necessary to present fairly the financial position
at September 30, 2000, the results of operations for the three- and
nine-month periods ended September 30, 2000 and 1999 and cash flows
for the nine-month periods ended September 30, 2000 and 1999. The
results of operations for the three and nine months ended September
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 September 30, 2000 and 1999 management had not identified any impaired
loans. The activity in the allowance for loan losses is as follows:
SEPTEMBER 30,
2000 1999
--------- ----
Balance at beginning of period $ 24,300 --
Provision for loan losses .... 202,470 --
--------- ----
Balance at end of period ..... $ 226,770 --
========= ====
(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 were 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 September 30, 2000, that the Bank meets all capital
adequacy requirements to which it is subject.
As of September 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 SEPTEMBER 30, 2000:
Total capital (to Risk-
Weighted Assets) ....... $7,457 24.00% $2,477 8.00% $3,096 10.00%
Tier I Capital (to Risk-
Weighted Assets) ....... 7,230 23.00 1,239 4.00 1,858 6.00
Tier I Capital
(to Average Assets) .... 7,230 23.00 1,253 4.00 1,567 5.00
</TABLE>
7
<PAGE> 9
FLORIDA BUSINESS BANCGROUP, INC.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Hacker, Johnson & Smith PA, the Company's independent certified public
accountants, have made a limited review of the financial data as of September
30, 2000, and for the three- and nine-month periods ended September 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 September 30, 2000,
and the related condensed consolidated statements of operations for the
three-month and nine-month periods ended September 30, 2000 and 1999, the
condensed consolidated statements of cash flows for the nine-month periods
ended September 30, 2000 and 1999 and the condensed consolidated statement of
stockholders' equity for the nine-month period ended September 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 & SMITH PA
Tampa, Florida
October 10, 2000
9
<PAGE> 11
FLORIDA BUSINESS BANCGROUP, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
COMPARISON OF SEPTEMBER 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 $62,872 which were deducted from
the proceeds.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 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 securities. At September 30, 2000, the Company had
commitments to originate loans and unfunded lines of credit totaling $23.0
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 September 30, 2000, the Bank
had liquidity of approximately $15.9 million, or approximately 63.6% of total
deposits.
Management believes the Bank was in compliance with all minimum capital
requirements which it was subject to at September 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>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- ------------
<S> <C> <C>
Average equity as a percentage
of average assets ............................ 50.37 % 97.16 %
Equity to total assets at end of period ......... 37.73 % 90.87 %
Return on average assets (1) .................... (2.35)% (7.56)%
Return on average equity (1) .................... (4.67)% (7.78)%
Noninterest expenses to average assets (1) ...... 7.15 % 20.64 %
Nonperforming loans and foreclosed real estate as
a percentage of total assets at end of period -- % -- %
</TABLE>
---------------
(1) Annualized for the nine months ended September 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 SEPTEMBER 30,
------------------------------------
2000
------------------------------------
INTEREST AVERAGE
AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE
-------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Loans .................................................. $ 11,972 304 10.16%
Securities................................................. 11,252 192 6.83
Other interest-earning assets (1).......................... 5,425 89 6.56
-------- -----
Total interest-earning assets.......................... 28,649 585 8.17
-----
Noninterest-earning assets..................................... 2,216
--------
Total assets........................................... $ 30,865
========
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts................ 6,267 72 4.60
Time deposits.............................................. 10,828 179 6.61
-------- -----
Total interest-bearing liabilities..................... 17,095 251 5.87
-----
Noninterest-bearing liabilities................................ 1,546
Stockholders' equity........................................... 12,224
--------
Total liabilities and stockholders' equity............. $ 30,865
========
Net interest income............................................ $ 334
=====
Interest-rate spread (2)....................................... 2.30%
====
Net interest margin (3)........................................ 4.66%
====
Ratio of average interest-earning assets to
average interest-bearing liabilities....................... 1.68
====
</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>
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------
2000
------------------------------------
INTEREST AVERAGE
AVERAGE AND YIELD/
BALANCE DIVIDENDS RATE
-------- --------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Interest-earning assets:
Loans...................................................... $ 7,256 545 10.01%
Securities................................................. 7,141 358 6.68
Other interest-earning assets (1).......................... 8,161 371 6.06
-------- -----
Total interest-earning assets.......................... 22,558 1,274 7.53
-----
Noninterest-earning assets..................................... 1,926
--------
Total assets........................................... $ 24,484
========
Interest-bearing liabilities:
Savings, NOW, money-market deposit accounts................ 3,717 120 4.30
Time deposits.............................................. 7,234 354 6.52
-------- -----
Total interest-bearing liabilities..................... 10,951 474 5.77
-----
Noninterest-bearing liabilities................................ 1,200
Stockholders' equity........................................... 12,333
--------
Total liabilities and stockholders' equity............. $ 24,484
========
Net interest income............................................ $ 800
=====
Interest-rate spread (2)....................................... 1.76%
=====
Net interest margin (3)........................................ 4.73%
=====
Ratio of average interest-earning assets to average
interest-bearing liabilities............................... 2.06
====
</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 SEPTEMBER 30, 2000 AND 1999
GENERAL. Net loss for the three-months ended September 30, 2000 was
$117,000 compared to $12,000 for 1999. The Bank commenced operations
on November 10, 1999. At September 30, 2000, the Company had not
achieved the asset size necessary to operate profitably.
INTEREST INCOME. Interest income was $585,000 for the three months ended
September 30, 2000. Interest income earned on loans was $304,000. The
average loan portfolio balance was $12.0 million for the three months
ended September 30, 2000 and the average yield earned was 10.16%.
INTEREST EXPENSE. Interest expense was $251,000 for the three months ended
September 30, 2000. The average balance of interest-bearing deposits
was $17.1 million for the three months ended September 30, 2000 and
the average cost was 5.87%.
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
September 30, 2000 of $96,000 and the allowance for loan losses was
$227,000 at September 30, 2000. Management believes the allowance for
loan losses is adequate at September 30, 2000.
NONINTEREST EXPENSE. Noninterest expense was $439,000 for the three months
ended September 30, 2000 compared to $209,000 for the three months
ended September 30, 1999. This increase resulted from the commencement
of banking operations.
INCOME TAX BENEFIT. The income tax benefit for the three months ended
September 30, 2000 was $73,000 (an effective rate of 38.4%) compared
to $7,000 in 1999 (an effective rate of 37.6%). 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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FLORIDA BUSINESS BANCGROUP, INC.
COMPARISON OF THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2000 AND 1999
GENERAL. Net loss for the nine-months ended September 30, 2000 was
$432,000 compared to $178,000 for 1999. The Bank commenced operations
on November 10, 1999. At September 30, 2000, the Company had not
achieved the asset size necessary to operate profitably.
INTEREST INCOME. Interest income was $1,274,000 for the nine months ended
September 30, 2000. Interest income earned on loans was $545,000. The
average loan portfolio balance was $7.3 million for the nine months
ended September 30, 2000 and the average yield earned was 10.01%.
INTEREST EXPENSE. Interest expense was $474,000 for the nine months ended
September 30, 2000. The average balance of interest-bearing deposits
was $11.0 million for the nine months ended September 30, 2000 and the
average cost was 5.77%.
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 nine months ended
September 30, 2000 of $202,000 and the allowance for loan losses was
$227,000 at September 30, 2000. Management believes the allowance is
adequate at September 30, 2000.
NONINTEREST EXPENSE. Noninterest expense was $1,313,000 for the nine
months ended September 30, 2000 compared to $475,000 for the nine
months ended September 30, 1999. This increase resulted from the
commencement of banking operations.
INCOME TAX BENEFIT. The income tax benefit for the nine months ended
September 30, 2000 was $261,000 (an effective rate of 37.7%) compared
to $107,000 in 1999 (an effective rate of 37.6%). 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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FLORIDA BUSINESS BANCGROUP, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Registrant has no pending legal proceedings as of September 30, 2000.
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 September 30, 2000.
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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: November 8, 2000 By: /s/ A. Bronson Thayer
-------------------- ------------------------------------
A. Bronson Thayer, Chairman and
Chief Executive Officer
Date: November 8 , 2000 By: /s/ Marti J. Warren
-------------------- ------------------------------------
Marti J. Warren,
Principal Financial Officer
17
