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As filed with the Securities and Exchange Commission on May 28, 1999.
Registration No. 333-70231
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUNCOAST BANCORP, INC.
(Name of Small Business Issuer as specified in its charter)
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FLORIDA 6712 65-0827141
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code) Identification Number)
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5922 CATTLEMEN ROAD, SUITE 202, SARASOTA, FLORIDA 34232 (941) 954-5315
(Address and telephone number of principal place of business)
8592 POTTER PARK DRIVE, SARASOTA, FLORIDA 34238 (941) 954-5315
(Address of principal place of business or intended principal place of business)
JOHN T. STAFFORD
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUNCOAST BANCORP, INC.
5922 CATTLEMEN ROAD, SUITE 202, SARASOTA, FLORIDA 34232
(Name, address and telephone number of agent for service)
Copy to:
JOHN P. GREELEY, ESQUIRE RICHARD A. DENMON, ESQUIRE
SMITH, MACKINNON, GREELEY, CARLTON, FIELDS, WARD, EMMANUEL
BOWDOIN & EDWARDS, P.A. SMITH & CUTLER, P.A.
255 SOUTH ORANGE AVENUE ONE HARBOUR PLACE
SUITE 800 777 SOUTH HARBOUR ISLAND BLVD.
ORLANDO, FLORIDA 32801 TAMPA, FLORIDA 33602-5799
(407) 843-7300 (813) 223-7000
FACSIMILE (407) 843-2448 FACSIMILE (813) 229-4133
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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable
after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. [ ]_____________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act Registration Statement number of the earlier effective Registration
Statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]______________
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY
THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED MAY 28, 1999
PROSPECTUS
700,000
SUNCOAST BANCORP, INC.
(A PROPOSED HOLDING COMPANY FOR SUNCOAST NATIONAL BANK)
(SUNCOAST NATIONAL BANK LOGO)
COMMON SHARES
This is an initial public offering by Suncoast Bancorp, Inc. of its common
shares. Suncoast Bancorp, Inc. is organizing to be the sole shareholder of
Suncoast National Bank. This is a firm commitment underwriting. We expect that
quotations for the common shares will be reported on the Nasdaq OTC Bulletin
Board under the symbol "SUNB."
AN INVESTMENT IN THE COMMON SHARES IS SPECULATIVE AND INVOLVES RISKS,
INCLUDING THOSE DESCRIBED IN THE "RISK FACTORS" SECTION BEGINNING ON PAGE 3 OF
THIS PROSPECTUS.
The common shares offered are not deposits, savings accounts, or other
obligations of a bank or savings association and are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency.
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PER SHARE TOTAL
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Public Price................................................ $10.00 $7,000,000
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Underwriting Discounts...................................... $ .62 $ 430,000
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Proceeds to Suncoast Bancorp, Inc. before expenses.......... $ 9.38 $6,570,000
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Suncoast Bancorp will be charged an underwriting discount of $0.70 per
share. However, Ashtin Kelly & Co. has agreed to charge Suncoast Bancorp a
reduced underwriter discount of $0.30 per share for sales made to certain
investors identified by Suncoast Bancorp to Ashtin Kelly & Co. This reduced rate
is limited to a total of 150,000 shares sold in this offering. The underwriting
discounts set forth in the table above reflect the blended rate based on the
assumption that 150,000 shares are sold at the reduced underwriting discount.
Ashtin Kelly & Co. has the right to purchase up to an additional 105,000
shares at the public offering price, less the underwriting discount, within 30
days from the date of this prospectus to cover over-allotments.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
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ASHTIN KELLY & CO.
THE DATE OF THIS PROSPECTUS IS MAY , 1999
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[INSERT A MAP OF THE STATE OF FLORIDA, WITH AN EXCERPT HIGHLIGHTING SUNCOAST
NATIONAL BANK'S LOCATION IN SARASOTA COUNTY].
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TABLE OF CONTENTS
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Page
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Prospectus Summary................................................................................................1
Risk Factors......................................................................................................3
Forward-Looking Statements.......................................................................................10
Recent Developments .............................................................................................11
Use of Proceeds..................................................................................................11
Dividend Policy..................................................................................................12
Capitalization...................................................................................................14
Management's Discussion and Analysis or Plan of Operation........................................................14
Business.........................................................................................................15
Management.......................................................................................................24
Certain Relationships and Related Transactions...................................................................32
Security Ownership of Management and Certain Beneficial Owners...................................................33
Supervision and Regulation.......................................................................................34
Description of Capital Stock.....................................................................................40
Shares Eligible for Future Sale..................................................................................42
Underwriting.....................................................................................................43
Legal Opinions...................................................................................................45
Experts..........................................................................................................45
Additional Information...........................................................................................45
Index to Financial Statements...................................................................................F-1
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SUMMARY
The following is a summary of information provided in this prospectus.
Because this is a summary, it does not contain all of the information that may
be important to you. You should read this entire document carefully. References
in this document to "we," "us," and "our" refer to Suncoast Bancorp, Inc.
SUNCOAST BANCORP AND SUNCOAST NATIONAL BANK
We are organizing as a bank holding company to own all of the capital
stock of Suncoast National Bank. Suncoast National Bank is organizing as a
national bank. Suncoast National Bank will offer a full range of commercial and
consumer banking services in Sarasota County. We are applying to the bank
regulatory agencies to become a bank holding company and to open Suncoast
National Bank. If these applications are approved, we intend to start business
in the second quarter of 1999. We are not an operating company and we have not
engaged in any significant business operations to date. We expect Suncoast
Bancorp and Suncoast National Bank to incur a substantial loss in the initial
years of operation. We currently maintain our office at 5922 Cattlemen Road,
Suite 202, Sarasota, Florida 34232. Our phone number is (941) 954-5315.
PURPOSE OF THE OFFERING
The purpose of the offering is to raise capital so that we can commence
operation as a bank holding company and Suncoast National Bank can open for
business. For additional information as to how we will use the proceeds of the
offering, see "Use of Proceeds" (page 11).
STRATEGY
We intend to operate a bank providing value to customers by delivering
products and services that meet their needs. We believe that Suncoast National
Bank can attract customers who prefer to conduct business with a bank that is
managed by local residents and has an active interest in their business. We
intend to have an experienced staff providing personal service and high-quality
products. We intend to have service providers affording customers with
convenient electronic access to their accounts. We also will offer other bank
products through debit cards, voice response and home banking. We believe that
this will allow Suncoast National Bank to use current technology while
minimizing the cost of delivery. We believe this business will appeal to
customers who have been receiving banking services in the depersonalized
environment of our larger banking competitors.
MARKET AREA
Our market area will be the southern part of Sarasota, Florida. Our
extended market area will encompass all of Sarasota County. The economy in this
area is represented by the construction, real estate, retail trade, personal
services, tourism, health care, government and agricultural industries.
BANK PREMISES
We have signed an agreement to lease a building located at 8592 Potter
Park Drive, Sarasota, Florida 34238. This site is located near the intersection
of U.S. 41 and Central Sarasota Parkway, a major intersection in Sarasota.
Commercial and industrial properties and residential communities are
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located around the proposed site. The Suncoast National Bank building will
consist of approximately 4,000 square feet of office space. It has four inside
teller stations, three customer service platform stations, two drive-through
lanes, and a walk-up and night depository ATM lane. We anticipate occupying the
building during the second quarter of 1999.
MANAGEMENT
We have assembled an experienced senior management team and board of
directors. These people have a shared vision and commitment to the success of
Suncoast National Bank. Several of our directors and officers have significant
banking experience, including banking experience in Sarasota County. John T.
Stafford, our President and Chief Executive Officer, has 27 years of banking
experience. Most recently, he was President and Chief Executive Officer of The
Commercial Bank in Douglasville, Georgia and Chairman, President and Chief
Executive Officer of C&S Bank, Sarasota, Florida. William F. Gnerre, our
Executive Vice President and Senior Loan Officer, has over 30 years of banking
experience. He recently served as Executive Vice President/Senior Credit
Officer of The Commercial Bank, Douglasville, Georgia. He also served in various
capacities with National Bank of Sarasota, including as Senior Vice President
and Regional Senior Credit Officer. We also intend to hire two additional
experienced officers to serve as Vice Presidents of Suncoast National Bank,
supervising the areas of accounting and lending.
All of our directors are business people who have lived in Sarasota
County for many years. They also have significant business interests in the
community. We believe their long-standing ties to the community, combined with
their business and banking experience, will provide Suncoast National Bank with
the unique ability to understand the needs of the market area.
MINIMUM AND MAXIMUM SHARE PURCHASE AMOUNTS AND OFFERING QUESTIONS
The minimum number of shares that you may purchase in this offering is
250 shares or $2,500. The maximum number of shares that may be purchased in this
offering by any person or persons ordering through a single account, or for any
group of persons buying together, is 35,000 shares or $350,000. We may decrease
or increase the maximum purchase limitation without notifying you.
Ashtin Kelly & Co. is the underwriter for this offering. If you have
any questions you should contact: Ashtin Kelly & Co., 400 Fifth Avenue South,
Naples, Florida 34102, telephone: (941) 435-3888.
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RISK FACTORS
An investment in the common shares is speculative, involves a high
degree of risk and should be considered only by persons who can afford to lose
their entire investment. The following paragraphs describe the principal
factors which we believe may make an investment in the common shares
speculative or one of high risk. Also, these are not all of the risks of buying
the common shares. You should also carefully read the cautionary statement
following the Risk Factors regarding the use of forward-looking statements.
WE HAVE NO OPERATING HISTORY UPON WHICH TO BASE AN ESTIMATE OF OUR FUTURE
EARNING PROSPECTS
We and Suncoast National Bank are subject to all the risks typically
encountered by new businesses and, specifically, to those of operating a new
bank. We and Suncoast National Bank are not yet conducting any business
operations. Thus, we have no operating history on which to base any estimate of
our future earnings prospects. Suncoast National Bank, which will be our sole
subsidiary, is organizing and will not receive final approval from banking
regulators to begin operations until after this offering is completed.
Accordingly, in deciding whether to buy the common shares, you do not have
access to historical information that would otherwise be available in
purchasing shares of financial institutions that are conducting business.
WE ANTICIPATE LOSSES DURING OUR INITIAL YEARS OF OPERATIONS
Typically, most new banks incur substantial start-up expenses, are not
profitable the first year of operation and, in some cases, are not profitable
for several years. We expect to incur operating losses in our first few years
and we will not be profitable if Suncoast National Bank is not profitable.
There is no assurance that Suncoast National Bank will be profitable. If
Suncoast National Bank is ultimately unsuccessful, you may not recover all or
any part of your investment in the common shares. In its early years of
operations, Suncoast National Bank will face increased risk of potential loan
losses and increased possibility that the money reserved for such losses may
not be adequate. This increased risk exists because all of Suncoast National
Bank's initial loans will be unseasoned new loans to new borrowers. It will
take several years to determine the borrower's payment histories. As a result,
management will not be able to evaluate the quality of Suncoast National Bank's
loan portfolio until that time. Consequently, in Suncoast National Bancorp's
early years, both you and management will have difficulty evaluating the
adequacy of Suncoast National Bank's underwriting procedures and its loan loss
reserve policies.
YOU COULD LOSE A PORTION OF YOUR INVESTMENT IF WE FAIL TO COMMENCE OPERATIONS
We anticipate Suncoast National Bank will commence its operations in
the second quarter of 1999. There is no assurance that Suncoast National Bank
will open during that time. If we do not commence operations, then we will need
to liquidate. If we liquidate, it is unlikely we will recover our full
investment in furniture, fixtures and equipment. Thus, if we liquidate before we
start business or become profitable, you would likely realize substantially less
than the $10.00 per share price that you paid for the common shares. Our
accumulated deficit was $128,333 at March 31, 1999 and approximately $156,000 at
April 30, 1999. We will continue to incur pre-opening expenses until Suncoast
National Bank opens. If the opening of Suncoast National Bank is delayed, the
pre-opening expenses will increase and Suncoast National Bank's ability to
develop business and income will be delayed. After the closing of this offering
and before Suncoast National Bank starts business, the offering proceeds will be
available to pay general operating expenses and our organizational and
pre-opening expenses and those of Suncoast National Bank. The offering proceeds
may be subject to claims of our creditors and those of Suncoast National Bank.
We intend to use approximately $325,000 of the net proceeds to repay a portion
of the bank line of credit used to pay for organizational and pre-opening
expenses, and $100,000 of the net proceeds to repay a portion of the line of
credit used to pay for leasehold improvements, furniture, fixtures and equipment
of Suncoast National Bank. The total line of credit to be repaid is anticipated
to be $425,000. We expect to incur $318,249 for general operating expenses
through the second quarter of 1999,
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including payments on the lease for Suncoast National Bank's main facility and
for furniture, fixtures, and equipment. Although we expect to receive all
regulatory approvals and to begin business in the second quarter of 1999, we
cannot assure you as to when, if at all, these events will occur.
WE WILL NEED TO DISSOLVE IF WE DO NOT GET REGULATORY APPROVALS
We and Suncoast National Bank are applying for all regulatory approvals
required to commence operations and anticipate receiving all necessary
regulatory approvals in the second quarter of 1999. If we do not receive final
regulatory approval, then we will need to dissolve. See "--You could lose a
portion of your investment if we fail to commence operations" (page 3). We have
received preliminary approval from the Office of the Comptroller of the Currency
and the Federal Deposit Insurance Corporation to open Suncoast National Bank.
The closing of this offering is not conditioned on us or Suncoast National Bank
receiving final regulatory approvals to commence business. If received, the
final regulatory approvals will be subject to several conditions, including:
- Suncoast National Bank must open with capital of at least $6
million. We propose to satisfy this requirement by using $6.0
million of the proceeds from this offering to invest in
Suncoast National Bank.
- Its capital divided by its total assets must be at least 8%
for the first 3 years.
- We may not incur debt during our first five years without
prior approval from the bank regulatory agencies.
- Suncoast National Bank must not deviate materially from its
operating plan submitted to the bank regulatory agencies.
- The bank regulatory agencies must approve our directors and
officers and those of Suncoast National Bank.
If we sell the common shares, but do not receive final approval to
open Suncoast National Bank within 18 months after January 21, 1999, the date
of the preliminary approval received from the Office of the Comptroller of the
Currency, we will seek shareholder approval to dissolve. If we are dissolved
and liquidated, we will distribute to shareholders our net assets remaining
after payment or provision for payment of all our claims. Shareholders will
receive only a portion of their original investment because part of the
proceeds of the offering will have been used to pay all costs incurred by us,
including the expenses of the offering, our organizational and pre-opening
expenses and those of Suncoast National Bank and claims of creditors. These
creditor claims include a bank line of credit for organizational and
pre-opening expenses. If we are dissolved after the common shares are sold, it
is possible that shareholders will receive only a portion of their investment
due to the payment of the foregoing expenses.
OUR SUCCESS DEPENDS ON SUCCESSFULLY IMPLEMENTING OUR BUSINESS STRATEGIES
If we cannot implement our business strategy, our ability to develop
business and serve our customers may be hindered. This could have an adverse
effect on our financial performance. Our business plan sets forth the strategy
that we intend to use in order to make Suncoast National Bank. This strategy
includes hiring and retaining qualified employees who are familiar with the
Sarasota market, community involvement, a community based marketing program,
and providing
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personalized quality banking services to customers. If we cannot hire or retain
qualified employees or do not otherwise successfully execute our business
strategy, our ability to develop business and serve our customers will be
hindered. As a startup bank, we may be at a disadvantage in initially attracting
employees and customers desiring to work with an established enterprise. Even if
we successfully implement our business strategy, it may not have the favorable
impact on operations that we anticipate.
WE FACE SIGNIFICANT COMPETITION IN SARASOTA COUNTY WHICH MAY ADVERSELY AFFECT
OUR SUCCESS
Suncoast National Bank will face strong competition for deposits,
loans and other services in Sarasota County. Our profitability will depend on
our ability to compete successfully. Although banks generally face strong
competitive pressures, banks in Sarasota County face increased pressures
because of the rapid growth in the local area economy. As one of the fastest
growing areas of Florida, there has been an increasing number of out-of-state
banks and other financial institutions entering the Sarasota County market.
Accordingly, competitors include many Florida and out-of-state banks, thrifts,
credit unions and other businesses that offer financial services. Some of the
businesses that compete with Suncoast National Bank are not subject to the same
amount of regulation as Suncoast National Bank. As of December 1998,
approximately 132 branch bank offices, 16 thrift offices and five credit union
offices were located in Sarasota County. Most of these competitors have been in
business for many years, have established customer bases, are larger, and have
substantially higher lending limits than Suncoast National Bank. Many offer
services, including trust services, multiple branches and international banking
services, that Suncoast National Bank can offer only through correspondents, if
at all. In addition, most of these entities have greater capital resources than
Suncoast National Bank. This may allow them to price their services at levels
more favorable to the customer and to provide larger loans than Suncoast
National Bank can provide. See "Business - Competition" (page 19).
WE MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL TO EXPAND SIGNIFICANTLY
Although we do not believe we will need additional capital during the
next 12 months to start and maintain our planned business activities, we will
need additional capital above that raised in this offering and generated by
Suncoast National Bank's income before we can significantly expand operations.
There is no assurance that funds necessary to finance such expansion will be
available. The bank regulatory agencies require us and Suncoast National Bank to
maintain minimum capital. This also has the effect of constraining future
growth, unless we and Suncoast National Bank increase capital. If we sell
additional shares in the future to increase capital, the sale could
significantly dilute your ownership interest.
EXTENSIVE REGULATIONS MAY LIMIT OUR OPERATIONS AND ABILITY TO COMPETE
We will be subject to extensive federal and state government
supervision and regulation. Federal and state banking laws limit Suncoast
National Bank's right to make loans, purchase securities, pay dividends, and
many other aspects of its banking business. These and other restrictions limit
the manner in which we may conduct our business and obtain financing. Our
ability to achieve profitability and to grow could be adversely affected by
state and federal banking laws and regulations. These laws are intended
primarily to protect Suncoast National Bank's depositors and are not for the
benefit of shareholders. In addition, the burdens and restrictions imposed by
federal and state banking regulations may place us at a competitive disadvantage
compared to competitors who are less regulated. We will compete for business and
deposits with securities companies and insurance companies, who can offer more
attractive returns and use customer funds for purposes that are not permissible
for banking institutions. Future legislation or government policy could
adversely affect the banking industry or the operations of Suncoast National
Bank. Federal economic and monetary policy may affect Suncoast National Bank's
ability to attract deposits, make loans, and achieve satisfactory interest
spreads. See "Business - General" (page 15) and "Supervision and Regulation"
(page 34).
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DEPARTURES OF OUR KEY PERSONNEL OR DIRECTORS MAY IMPAIR OUR OPERATIONS
We will depend upon the services of John T. Stafford, the President and
Chief Executive Officer of Suncoast Bancorp and Suncoast National Bank, and
William F. Gnerre, Executive Vice President of Suncoast Bancorp and Suncoast
National Bank and Chief Operating Officer and Senior Loan Officer of Suncoast
National Bank. Mr. Stafford and Mr. Gnerre are instrumental in our organization
and will provide valuable services to Suncoast Bancorp and Suncoast National
Bank. Both of these individuals are important to our success and the loss of
either of these individuals could adversely affect our operations. When Suncoast
National Bank opens, we intend to enter into employment agreements with Mr.
Stafford and Mr. Gnerre to help secure their continued service to Suncoast
National Bank and Suncoast Bancorp. See "Management" (page 25). Additionally,
our directors' community involvement, diverse backgrounds, and extensive local
business relationships are important to our success. If the composition of our
board of directors changes materially, our growth could be adversely affected.
Ultimately, our success will depend on our ability to identify, attract,
develop, and retain qualified directors, officers, and other employees. We
expect the competition for such individuals to be intense, and there can be no
assurance that we will be successful in identifying, attracting, developing, or
retaining qualified persons.
OUR LENDING TO SMALL BUSINESSES MAY RESULT IN A CONCENTRATION OF HIGHER RISK
COMMERCIAL LOANS
The risk of borrowers not paying their loans is inherent in commercial
banking. Loan defaults may have a material adverse effect on our earnings and
overall financial condition as well as the value of the common shares. Although
Suncoast National Bank intends to offer a full range of loans to its customers,
Suncoast National Bank expects to focus on small-to-medium sized businesses.
This may result in a larger concentration by Suncoast National Bank of loans to
such businesses, which also carries risk. As a result, Suncoast National Bank
may assume greater lending risks than banks which have a lesser concentration of
such loans and tend to make loans to larger businesses. The risk of loss is
affected by general economic conditions, the type of loan, the borrower's
overall ability to repay the loan, and the quality of the collateral, if any,
provided for the loan. Some types of loans carry a greater risk of default than
other loans. For example, historically commercial loans tend to run a higher
risk of default than residential real estate loans. Also, because commercial
loans usually involve larger loan balances to single borrowers than other types
of loans, Suncoast National Bank's loan portfolio is more likely to have a
higher concentration of these loans, the risk of which will be spread over a
smaller number of borrowers. We will attempt to minimize Suncoast National
Bank's credit risk by carefully monitoring the concentration of its loans within
specific industries. However, there is no assurance that this will reduce these
lending risks. A significant number of, or dollar amount of, loan defaults and
late payments would have an adverse impact on Suncoast National Bank's
profitability and the value of the common shares. See "Business - Products and
Services" (page 20).
OUR LOW LENDING AMOUNTS MAY LIMIT OUR GROWTH AND ABILITY TO ATTRACT BORROWERS
Our lower lending limits may discourage potential borrowers who have
lending needs that exceed our limits. This could restrict our ability to grow.
Suncoast National Bank's initial lending limit to any one borrower will be
approximately $767,000. The Board of Directors may establish an "in-house" limit
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that will be lower than Suncoast National Bank's legal lending limit. The Board
may periodically raise or lower the "in-house" limit to comply with sound
banking practices and respond to overall economic conditions. Thus, the size of
the loans which Suncoast National Bank can offer to customers will be less than
the size of loans that most of Suncoast National Bank's competitors are able to
offer. Initially, this limit may adversely affect Suncoast National Bank's
ability to seek relationships with the area's larger businesses. Suncoast
National Bank expects to accommodate loan volumes in excess of its lending limit
through the sale of participations in such loans to other banks. There can be no
assurance that Suncoast National Bank will be successful in attracting or
maintaining customers seeking larger loans. There also is no assurance that
Suncoast National Bank will be able to sell portions of these loans on terms
favorable to Suncoast National Bank. See "Business" - "Business Strategy" (page
17).
CHANGES IN INTEREST RATES AND ECONOMIC CONDITIONS MAY ADVERSELY AFFECT OUR
PROFITABILITY
The profitability of financial institutions, including Suncoast
National Bank, may be adversely affected by changes in economic conditions, real
estate values, interest rates, and the policies of the federal government.
Suncoast National Bank's profitability also depends on the difference between
the amount of interest Suncoast National Bank earns on investments and loans,
and the interest it pays on deposits and other liabilities. This difference is
referred to as Suncoast National Bank's interest rate spread. Recently, interest
rate spreads have narrowed due to changing market conditions and competitive
pricing pressure. Any increase or decrease in interest rates could have a
material adverse effect on Suncoast National Bank's net interest income, capital
and liquidity. Substantially all of Suncoast National Bank's loans will be to
businesses and individuals in the Southwest Florida area. Any decline in the
economy of this area could have an adverse impact on Suncoast National Bank.
Like most banking institutions, Suncoast National Bank's net interest spread and
margin will be affected by general economic conditions and other factors which
influence interest rates. Suncoast National Bank's assets and liabilities will
be affected differently by a given change in interest rates. Thus, an increase
or decrease in rates, the length of loan terms, or the mix of adjustable and
fixed rate loans in Suncoast National Bank's portfolio could have a positive or
negative effect on Suncoast National Bank's net income, capital and liquidity.
Changes in interest rates are not predictable or controllable. Negative
developments in the economy or Suncoast National Bank's inability to respond to
such changes, could adversely affect Suncoast National Bank.
WE NEED TO STAY CURRENT ON TECHNOLOGICAL CHANGES TO COMPETE AND MEET CUSTOMER
NEEDS
The banking industry is undergoing rapid technology changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, effective use of technology increases
efficiency and enables banks to reduce costs. Our future success will depend in
part on our ability to address the needs of our clients by using technology to
provide products and services that will satisfy client demands for convenience
as well as to create additional efficiencies in our operations. Many of our
competitors have substantially greater resources to invest in technology
improvements and highly skilled technical personnel. To be competitive, we may
need to spend significant amounts on computer hardware and software, and for
technical personnel. There can be no assurance that we will be able to
effectively implement new technology-driven products and services or be
successful in marketing these products and services to our clients.
YEAR 2000 PROBLEMS OF VENDORS AND CUSTOMERS COULD ADVERSELY AFFECT OUR
OPERATIONS
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A great deal of information has been disseminated about the widespread
computer problems that may arise in the year 2000. Computer programs that can
only distinguish the final two digits of the year entered are expected to read
entries for the year 2000 as the year 1900 and compute payment, interest and
delinquency, based on the wrong date or are expected to be unable to compute
payment, interest or delinquency. If Suncoast National Bank or any of its
service providers, correspondents, vendors or customers experiences a disruption
in business resulting from a year 2000 problem, the financial condition, results
of operations and liquidity of Suncoast National Bank could be adversely
affected.
All our material data processing that could be affected by the year
2000 issue described above will be provided by a third party service bureau. We
intend to select a service bureau that will function properly on and after
January 1, 2000. Prior to selecting a service bureau, we intend to have that
service bureau certify to us that they will be year 2000 compliant. Any delays,
mistakes, or failures resulting from the failure of our data processing service
provider to be year 2000 compliant could have a significant adverse impact on
our financial condition and results of operations. We cannot verify
independently that such service bureau or equipment will in fact be year 2000
compliant. Additionally, Suncoast National Bank could be adversely affected by
year 2000 problems experienced by others over which it has no control - such as
customers, customers' vendors, correspondent banks, service providers, and
government agencies. If, for example, a significant borrower experiences a year
2000 problem which negatively affects its operations, such borrower may not be
able to maintain its cash flow and could default on its loan. This could lead to
loan losses for Suncoast National Bank.
WE DO NOT PLAN TO PAY CASH DIVIDENDS
We do not anticipate paying any cash dividends on the common shares for
the immediately foreseeable future. Our ability to pay dividends also will be
largely dependent upon dividends paid by Suncoast National Bank to Suncoast
Bancorp. We do not intend that Suncoast National Bank pay dividends during the
early years of its operations. No assurance can be given that future earnings of
Suncoast National Bank, and any resulting dividends to Suncoast Bancorp, will be
sufficient to permit the legal payment of dividends to shareholders at any time
in the future. Bank holding companies and national banks are both subject to
significant regulatory restrictions on the payment of cash dividends. Even if we
may legally declare dividends, the amount and timing of such dividends will be
at the discretion of our board of directors. The board may in its sole
discretion decide not to declare dividends. In light of the regulatory
restrictions and the need for Suncoast National Bank to retain and build capital
for growth and expansion, it will be the policy of the board of directors to
reinvest earnings for the foreseeable future. See "Dividend Policy" (page 12)
and "Supervision and Regulation - Dividends" (page 36).
THE OFFERING PRICE IS ARBITRARILY DETERMINED AND MAY NOT REFLECT THE VALUE OF
SHARES
The initial public offering price of $10.00 per share was determined by
negotiations between us and the underwriter of this offering. This price is not
based upon earnings or any history of operations and does not bear any
relationship to our net worth, book value, or other established valuation
measurements. Accordingly, the initial price should not be construed as
indicative of the present or anticipated future value of the common shares. If a
market for the common shares should develop, the offering price may be greater
than the market price.
8
<PAGE> 13
OUR DIRECTOR CONTROL MAY ADVERSELY AFFECT PREMIUM PAID FOR SHARES
Our directors and executive officers together may have sufficient
voting power to control the outcome of director elections or block a
significant transaction that might otherwise be approved by the shareholders.
After this offering, we anticipate that our directors and officers collectively
will beneficially own at least 150,000 common shares and options to purchase an
additional 56,000 common shares at the initial offering price. Each
non-employee director and Messrs. Stafford and Gnerre will receive options to
purchase 7,000 common shares. Without the exercise of the options, the
directors and officers will have control over 21% of the outstanding common
shares or 18.6% if the over-allotment option is exercised in full. With the
exercise of all of the options, they would control 27.3% of the
then-outstanding common shares, or 23.9% if the over-allotment option is
exercised in full. As a result, these individuals will be able to exert a
significant measure of control over our affairs and policies. This control
could be used, for example, to help prevent an acquisition of Suncoast Bancorp.
This could preclude shareholders from possibly realizing any premium which may
be offered for the common shares by a potential acquirer.
OUR ABILITY TO CONTINUE AS A GOING CONCERN DEPENDS ON COMPTROLLER OF THE
CURRENCY APPROVAL AND A SUCCESSFUL OFFERING
The independent auditors' report on our December 31, 1998 financial
statements notes that the financial statements are prepared assuming we will
continue as a going concern. Our ability to continue as a going concern depends
on our receipt of final approval from the regulatory agencies to open Suncoast
National Bank and our successful completion of this offering. If we do not
satisfy these two conditions, then we will need to dissolve. See "Risk Factors -
We will need to dissolve if we do not get regulatory approvals" (page 4).
ANTI-TAKEOVER LAWS MAY ADVERSELY AFFECT SHARE VALUE
Under Federal law, a person, entity or group must notify the Federal
banking agencies before acquiring 10% or more of the outstanding voting stock of
a bank holding company, including our shares. Banking agencies review the
acquisition to determine if it will result in a change of control. The banking
agencies have 60 days to act on the notice, and take into account several
factors, including the resources of the acquirer, the needs of the community,
and the antitrust effects of the acquisition. Florida law contains similar
provisions which require prior approval before a change of control can be
completed. These laws have the effect of deterring unsolicited attempts to
acquire control of Suncoast Bancorp. These provisions also could result in
Suncoast Bancorp being less attractive to a potential acquirer. Thus, these laws
could result in shareholders receiving less for their shares than otherwise
might be available in the event of a change in control of Suncoast Bancorp. See
"Description of Capital Stock - Anti-Takeover and Indemnification Provisions"
(page 41).
AN ACTIVE TRADING MARKET FOR THE COMMON SHARES MAY NOT DEVELOP
If an active trading market for the common shares does not develop, you
may find it difficult to sell your shares. Prior to this offering, there has
been no public trading market for the common shares. We are applying to list the
common shares for quotation on the Nasdaq OTC Bulletin Board under the symbol
"SUNB." The underwriter has told us that it presently intends to assist in
identifying firms to make a market in the common shares after this offering,
subject to applicable laws and regulatory requirements. This activity is subject
to various securities laws and other regulatory requirements. Developing a
public trading market depends upon having willing buyers and sellers. This is
not within our control or the control of Suncoast National Bank or any market
maker. Even with a market maker, an active and liquid market for the common
shares may not develop in the foreseeable future, if at all. Even
9
<PAGE> 14
if a market develops, there can be no assurance that a market will continue, or
that you will be able to sell your shares at or above the initial public
offering price of $10.00 per share. Also, the potential size of a secondary
market for the common shares might, at least initially, be limited by the $2,500
minimum investment required in this offering. This requirement may restrict the
number of shareholders and make subsequent trading of small numbers of shares
less likely. If no trading market develops or is maintained, you may find it
difficult to sell your shares. You should carefully consider the potentially
illiquid and long-term nature of your investment in the shares.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements", such as
statements relating to financial condition and prospects, lending risks, Year
2000 readiness, plans for future business development and marketing activities,
capital spending and financing sources, capital structure, the effects of
regulation and competition, and the prospective business of both Suncoast
Bancorp and Suncoast National Bank. Where used in this prospectus, the words
"anticipate", "believe", "estimate", "expect", "intend", and similar words and
expressions, as they relate to Suncoast Bancorp or Suncoast National Bank or
their respective managements, identify forward-looking statements. Such
forward-looking statements reflect the current views of Suncoast Bancorp and are
based on information currently available to the management of Suncoast Bancorp
and Suncoast National Bank and upon current expectations, estimates, and
projections about Suncoast Bancorp and its industry, management's beliefs with
respect thereto, and assumptions made by management. These forward-looking
statements are not guarantees of future performance and are subject to risks,
uncertainties, and other factors which could cause actual results to differ
materially from those expressed or implied by such forward-looking statements.
Potential risks and uncertainties include, but are not limited to:
- significant increases in competitive pressure in the banking
and financial services industries;
- changes in the interest rate environment which could reduce
anticipated or actual margins;
- changes in political conditions or the legislative or
regulatory environment;
- general economic conditions, either nationally or regionally
and especially in southwest Florida, becoming less favorable
than expected resulting in, among other things, a
deterioration in credit quality;
- changes occurring in business conditions and inflation;
- changes in technology;
- changes in monetary and tax policies;
- changes in the securities markets; and
- other risks and uncertainties detailed from time to time in
the filings of Suncoast Bancorp with the Securities and
Exchange Commission.
10
<PAGE> 15
The most significant of these risks, uncertainties, and other factors are
discussed under the heading "Risk Factors," beginning on page 3 of this
prospectus, and prospective investors are urged to carefully consider such
factors.
RECENT DEVELOPMENTS
As of December 31, 1998, the date of Suncoast Bancorp's most recent
audited financial statements, Suncoast Bancorp's accumulated deficit was
$85,821. Since December 31, 1998, Suncoast Bancorp has continued to incur
pre-opening expenses. Suncoast Bancorp's accumulated deficit was approximately
$128,333 as of March 31, 1999 and $156,000 as of April 30, 1999. The additional
expenses incurred related principally to legal and professional fees incurred
in the regulatory application process and in connection with this offering,
salaries, equipment rental and supplies.
USE OF PROCEEDS
The net proceeds to Suncoast Bancorp from the sale of the 700,000
common shares offered hereby are estimated to be $6,400,000, and $7,376,500 if
the underwriter's over-allotment option is exercised in full, after deduction
of the underwriting discounts and commissions and estimated offering expenses.
The net proceeds have not been reduced by the amount of Suncoast Bancorp's
organizational and other operating expenses which were approximately $128,333
as of March 31, 1999 and $156,000 as of April 30, 1999.
Suncoast Bancorp will use $6.0 million of the net proceeds of this
offering to purchase all of the common stock of Suncoast National Bank,
providing Suncoast National Bank's initial capitalization. Of the amount
contributed to Suncoast National Bank, approximately $455,000 of these funds
are expected to be used to construct leasehold improvements and buy necessary
furniture, fixtures and equipment for Suncoast National Bank's office, and
$100,000 is expected to be used to repay a portion of the line of credit
previously used to begin construction of leaseholds and purchase furniture,
fixtures and equipment. It is anticipated that the remaining amount will be
used by Suncoast National Bank to fund investments in loans and U.S. government
and agency securities, federal funds sold, and for payment of Suncoast National
Bank's operating expenses.
After capitalizing Suncoast National Bank as set forth above, the
balance of the net proceeds of this offering, that will be retained by Suncoast
Bancorp is estimated to be approximately $400,000. Of this amount,
approximately $325,000 will be used to repay a portion of the bank line of
credit, the proceeds of which were used to pay the expenses of organizing
Suncoast Bancorp and Suncoast National Bank. The line of credit is guaranteed
by the directors of Suncoast Bancorp and Suncoast National Bank, provides for
interest only payments at prime plus 1%, adjustable monthly, and matures on May
1, 1999. The remaining proceeds will initially be invested by Suncoast Bancorp
in an overnight repurchase agreement with Suncoast National Bank secured by
U.S. Treasury and Agency securities and otherwise will be held by Suncoast
Bancorp as working capital for general corporate purposes as well as for
possible future capital contributions to Suncoast National Bank to support
asset growth. Such uses by Suncoast Bancorp, however, may be subject to change.
Suncoast Bancorp believes that the net proceeds of the offering will satisfy
Suncoast Bancorp's cash requirements for at least the first 12 month period
following the opening of Suncoast National Bank.
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<PAGE> 16
The following table illustrates the intended use by Suncoast Bancorp of
the net proceeds of this offering:
<TABLE>
<CAPTION>
DOLLAR AMOUNT
-------------
<S> <C>
Repay amounts drawn on line of credit for organizational and $ 325,000
pre-opening expenses
Contribution to the capital of Suncoast National Bank 6,000,000
Working capital 75,000
-----------
Total $ 6,400,000
===========
</TABLE>
After Suncoast National Bank receives the necessary regulatory
approvals, Suncoast Bancorp will capitalize Suncoast National Bank with a
minimum of $6 million. Suncoast National Bank intends to use these proceeds for
the following purposes:
<TABLE>
<CAPTION>
DOLLAR AMOUNT
-------------
<S> <C>
Repay amounts drawn on line of credit for leasehold improvements, furniture,
fixtures and equipment $ 100,000
Construction of leasehold improvements 175,000
Furniture, fixtures and equipment for Suncoast National Bank's main office 280,000
Funds to be used for loans to customers, investments and other general
purposes 5,445,000
-----------
Total $ 6,000,000
===========
</TABLE>
At present, Suncoast National Bank anticipates that the portion of the
$5,445,000 of funds available for loans to customers will be allocated to
commercial and commercial real estate loans, residential lending, including
residential construction, and to consumer lending, including home equity loans.
Suncoast National Bank does not currently know the percentages that will be
allocated to each of these lending categories, since Suncoast National Bank has
not started operations and the allocation of loans will depend upon existing
market conditions and customer demands. In addition, the amounts allocated to
these general loan categories may vary from time to time.
DIVIDEND POLICY
Holders of Suncoast Bancorp's common shares are entitled to receive
cash dividends when and if declared by its board of directors out of funds
legally available therefor.
Suncoast Bancorp initially expects that all its and Suncoast National
Bank's earnings, if any, will be retained to finance the growth of Suncoast
Bancorp and Suncoast National Bank and that no cash dividends will be paid for
the foreseeable future. The primary source of dividends to Suncoast Bancorp's
shareholders, if any, in the future, will depend primarily on the earnings of
Suncoast National Bank and its ability to pay dividends to Suncoast Bancorp, as
to which there can be no assurance. Under Federal law, Suncoast National Bank
will be restricted as to the maximum amount of dividends it may pay on its
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<PAGE> 17
common stock. Also, the approval of the Comptroller of the Currency is required
for the payment of any dividend if the aggregate amount of all dividends paid by
Suncoast National Bank during such calendar year would exceed the sum of:
- the total net profits of Suncoast National Bank for that year,
and
- the retained net profits of Suncoast National Bank for the
previous two years less any required transfer to surplus.
The Comptroller of the Currency and the Federal Deposit Insurance
Corporation ("FDIC") also are authorized to prohibit the payment of dividends by
Suncoast National Bank.
Under federal law and the policy of the Board of Governors of the
Federal Reserve System (the "Federal Reserve"), a bank holding company is
required to serve as a source of financial strength to its subsidiary bank and
to commit resources to support the bank. Consistent with this requirement, the
Federal Reserve has stated that, as a matter of prudent banking, a bank holding
company generally should not pay cash dividends unless the available net income
of the bank holding company is sufficient to fully fund the dividends, and the
prospective rate of earnings retention is to be consistent with the company's
needs, asset quality and overall financial condition. For additional information
regarding restrictions on payment of dividends, see "Supervision and Regulation
- - Dividends."
13
<PAGE> 18
CAPITALIZATION
The following table sets forth the capitalization of Suncoast Bancorp
as of March 31, 1999, and as adjusted to reflect the sale of the common
shares offered hereby at the public offering price of $10.00 per share:
<TABLE>
<CAPTION>
March 31, 1999
--------------------------------
ACTUAL AS ADJUSTED (1) (2)
--------- -------------------
<S> <C> <C>
Long-term and short-term debt ........................ $ 317,124 $ -0-
========= ===========
Shareholders' equity:
Preferred shares; $.01 stated par; 3,000,000 shares
authorized; no shares issued or outstanding ..... -0- -0-
Common shares; $.01 par value, 10,000,000 shares
authorized; one share issued and outstanding
700,000 shares as adjusted) (3) ................. -0- 7,000
Additional paid-in capital ........................... 1 6,393,000
Accumulated deficit (4) .............................. (128,333) (128,333)
--------- -----------
Total shareholders' equity ........................... $(128,332) $ 6,271,667
========= ===========
</TABLE>
- ------------------------------------
(1) As adjusted to give effect to the offering and receipt of the net
proceeds therefrom.
(2) The amount reflected assumes that the over-allotment option granted to
the underwriter is not exercised.
(3) Does not include (a) 42,000 common shares issuable upon exercise of
options to be granted to non-employee directors of Suncoast Bancorp, on
the basis of 7,000 per non-employee director, upon opening of Suncoast
National Bank under the Suncoast Bancorp, Inc. Director Stock Option
Plan, and (b)14,000 common shares issuable upon exercise of options to
be granted to Messrs. Stafford and Gnerre, on the basis of 7,000 each,
upon opening of Suncoast National Bank under the Suncoast Bancorp, Inc.
Employee Stock Option Plan. See "Management-Stock Option Plans."
(4) The accumulated deficit is comprised primarily of pre-opening expenses
incurred through March 31, 1999, related principally to legal and
professional fees incurred in the regulatory application process,
creation of the holding company, office occupancy costs and supplies.
In addition, William F. Gnerre has been receiving consulting fees since
April 1998 and John T. Stafford an automobile allowance from Suncoast
Bancorp since July 1998. The accumulated deficit will continue to
increase prior to Suncoast National Bank's commencement of operations,
and will then increase further as expected initial operating losses are
incurred. Additional employees will be hired prior to the opening of
Suncoast National Bank and further salary expenses and training costs
will be incurred at such time. Additional professional fees will also
be incurred in connection with this offering and other corporate
matters.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
Suncoast Bancorp is still in a development stage and will remain in
that stage until the offering of Suncoast Bancorp's common shares is completed
and Suncoast National Bank commences operations. Suncoast Bancorp has funded its
start-up and organization costs through a $425,000 bank line of credit, which is
guaranteed by the directors of Suncoast Bancorp and Suncoast National Bank. This
line of credit will be repaid from the net proceeds of the offering. Suncoast
Bancorp believes that the net proceeds of the offering will satisfy Suncoast
Bancorp's cash requirements for at least the first 12-month period following the
opening of Suncoast National Bank. Accordingly, Suncoast Bancorp does not
14
<PAGE> 19
anticipate that it will be necessary to raise additional funds for the operation
of Suncoast Bancorp and Suncoast National Bank during such 12-month period.
The operations of Suncoast Bancorp from April 1, 1998 through the date
of this prospectus have been funded by a line of credit received by the
organizers. Its operations will continue to be funded by the line of credit
until the offering closes. The total amount available on the line of credit is
$425,000, of which approximately $251,188 was outstanding at March 31, 1999.
This loan has been guaranteed by the organizers, bears interest at the prime
rate plus 1%, is adjustable monthly, and is due on August 10, 1999. From April
1, 1998 to March 31, 1999, the net loss amounted to $128,333. The estimated net
loss from April 1, 1998 through June 15, 1999, the anticipated opening date of
Suncoast National Bank, is $318,249, which is attributable to the following
estimated noninterest expenses:
<TABLE>
<S> <C>
Salaries and benefits: $183,530
Occupancy expenses 48,090
Equipment rental, depreciation, office, and maintenance 22,332
Other pre-opening expenses 64,297
--------
Total $318,249
========
</TABLE>
For additional information regarding material expenditures during such
period, see "Use of Proceeds." For information regarding the increase in
Suncoast National Bank employees following the opening of Suncoast National
Bank, see "Business - Employees." For additional information regarding the plan
of operations for Suncoast Bancorp and Suncoast National Bank see "Business" and
"Management."
BUSINESS
GENERAL
Suncoast Bancorp was incorporated under the laws of the State of
Florida on April 1, 1998 under the name Community Holdings Corporation. It
changed its name to Suncoast Bancorp, Inc. on November 20, 1998. Suncoast
Bancorp was formed primarily to own all of the common stock of Suncoast National
Bank and to serve as a bank holding company under the Bank Holding Company Act
of 1956 (the "BHC Act"). Suncoast National Bank is organizing as a national
banking association with depository accounts to be insured by the FDIC to the
extent permitted by law. Suncoast National Bank intends to offer a full range of
commercial and consumer banking services primarily within its market area. The
market area includes the southern part of Sarasota County, including the
community of Osprey. Suncoast National Bank's extended market area encompasses
all of Sarasota County.
Suncoast Bancorp and Suncoast National Bank have applied for all
necessary regulatory approvals. Assuming such regulatory approvals are received
and the successful completion of this offering, Suncoast Bancorp and Suncoast
National Bank anticipate commencing business in the second quarter of 1999.
Suncoast National Bank received Comptroller of the Currency preliminary approval
on January 21, 1999, and received preliminary deposit insurance approval from
the FDIC on March 5, 1999. Suncoast National Bank intends to commence business
as soon as reasonably possible upon completion of the offering and satisfaction
of the conditions of its regulatory approvals. See "Risk Factors Extensive
Regulations May Limit Our Operations and Ability to Compete." Suncoast Bancorp
currently maintains
15
<PAGE> 20
its offices at 5922 Cattlemen Road, Suite 202, Sarasota, Florida 34232. Upon
completion of Suncoast National Bank's facility, the address will be 8592 Potter
Park Drive, Sarasota, Florida 34238. Suncoast Bancorp anticipates that Suncoast
National Bank's facility will be completed in the second quarter of 1999.
Suncoast Bancorp's telephone number is (941) 954-5315.
Suncoast National Bank is being formed by local business persons who
have identified the need for a consumer-oriented independent community bank in
Sarasota County, Florida to serve its growing population and expanding business
base. The liberalization of Federal and State of Florida interstate banking laws
in recent years has led to substantial consolidation of the banking industry in
Florida and, particularly, the southwest Florida area. Since the early 1990s,
several of the area's locally owned or locally managed financial institutions
have been acquired by large regional bank holding companies. Members of Suncoast
Bancorp's board, all of whom have been participants or observers of the local
banking scene for many years, have noticed the need for a locally owned, highly
service-oriented banking organization to fill a void created by this
consolidation in the banking industry. Specifically, the board believes that the
area could greatly benefit from a financial institution whose focus would be to
serve the business and personal banking needs of local entrepreneurs and local
business owners. The board also believes that this niche is currently being
under-served by other banks.
In the opinion of Suncoast Bancorp's management, this situation has
created a favorable opportunity for a new commercial bank with headquarters in
the Sarasota area. Management of Suncoast Bancorp believes that such a bank can
attract those clients who prefer to conduct business with a locally-managed
institution that demonstrates an active interest in their businesses and
personal financial affairs. Suncoast Bancorp believes that a locally managed
institution will be better able to deliver more timely responses to client
requests, provide customized financial products or services addressing
out-of-the-ordinary matters and offer the personal attention of senior banking
officers. Suncoast National Bank will seek to take advantage of this opportunity
by emphasizing in its marketing plan, its local management and its ties and
commitment to the local community.
Suncoast National Bank intends to be a full service commercial bank.
Its business will consist of attracting deposits from the general public in its
market area and using those deposits, together with funds derived from other
sources, to originate a variety of commercial, consumer, and residential real
estate loans. While Suncoast National Bank anticipates that its lending
activities will include residential real estate and consumer loans, it expects
to focus its efforts on lending relationships with small to medium-sized
businesses. Suncoast National Bank's focus will be on the smaller commercial
customer because management believes that this segment offers the greatest
concentration of potential business. Also, the small to mid-sized commercial
market segment has historically shown a willingness to borrow and carry larger
balances. Finally, Suncoast Bancorp believes that this market segment tends to
be more loyal in its banking relationships. Suncoast National Bank intends to
offer a full range of deposit services that are typically available at most
banking institutions, including personal and business checking accounts, senior
checking accounts, interest-bearing checking accounts, savings accounts, and
other time deposits of various types, ranging from daily money market accounts
to long-term certificates of deposit. The transaction accounts and time
certificates will be tailored to the market area at rates competitive to those
offered in the area. Suncoast National Bank's deposits will be insured up to
applicable limits by the FDIC. Suncoast National Bank also intends to offer
commercial loans, consumer installment loans, real estate loans, construction
loans, second mortgage loans, home equity loans, and lines of credit. Commercial
loans will include both secured and unsecured loans for working capital,
inventory and receivables, business expansion, acquisition of real estate and
improvements, and purchase of machinery and equipment. Consumer loans will
include secured and unsecured loans for financing automobiles,
16
<PAGE> 21
boats, home improvements and personal investments. Other services Suncoast
National Bank is expected to offer will include official bank checks and money
orders, travelers checks, bank by mail, safe deposit boxes, wire transfers,
direct deposit of payroll and social security checks, automatic drafts for
various accounts, and U.S. Savings Bonds. Suncoast National Bank does not
anticipate initially providing fiduciary services. The need for such services,
however, will be reviewed periodically for possible future inclusion among
Suncoast National Bank's products and services.
The revenues of Suncoast National Bank will be primarily derived from
interest on and fees received in connection with, commercial, real estate, and
other loans, from the sales of loans and from interest on and dividends from
investment securities and short-term investments. The principal sources of funds
for Suncoast National Bank's lending activities will be its deposits,
amortization and repayment of loans, sales of loans, and the sale of investment
securities. The principal expenses of Suncoast National Bank will be the
interest paid on deposits and operating and general administrative expenses.
As is the case with banking institutions generally, Suncoast National
Bank's operations will be materially and significantly influenced by general
economic conditions and by related monetary and fiscal policies of financial
institution regulatory agencies, including the Federal Reserve and the FDIC.
Deposit flows and cost of funds are influenced by interest rates on competing
investments and general market rates of interest. Lending activities are
affected by the demand for financing of real estate and other types of loans,
which in turn is affected by the interest rates at which such financing may be
offered and other factors affecting local demand and availability of funds.
Suncoast Bancorp's primary initial focus will be the development of
Suncoast National Bank's business from a single office location. In this regard,
Suncoast National Bank has applied to establish a courier service for the
acceptance of deposits. As warranted, Suncoast Bancorp will consider
diversifying its activities over time to include additional services and banking
locations. Suncoast Bancorp has no present plans to acquire or establish any
operating subsidiaries other than Suncoast National Bank.
BUSINESS STRATEGY
Suncoast National Bank's strategy will be to operate as a community
bank emphasizing prompt, personalized customer service to the individuals and
businesses located in Sarasota, Florida and surrounding communities. The
community banking focus of Suncoast National Bank will provide customers with
locally-based decision makers who are familiar with their customers, their
business environment and competitive demands, who are able to quickly evaluate
and respond to loan applications, and who have the ability to craft personalized
banking solutions to the customers' needs without extensive bureaucratic delays.
Management believes that such a bank will appeal to customers who prefer to
conduct their banking business with a locally-managed financial institution that
demonstrates a genuine interest in their financial affairs and an ability to
cater to their financial needs.
Suncoast National Bank intends to concentrate on the financial services
needs of individuals and local businesses. A cornerstone of Suncoast National
Bank's business strategy will be to emphasize its local management and its
commitment to Suncoast National Bank's market area. John T. Stafford, the
President and Chief Executive Officer of Suncoast Bancorp and Suncoast National
Bank, has 27 years of experience serving the banking industry, including 17
years in Sarasota County. William F. Gnerre, Executive Vice President of
Suncoast Bancorp and Suncoast National Bank and Chief Operating and Senior Loan
Officer of Suncoast National Bank also has over 30 years of experience serving
the banking industry, including 17 years in Sarasota County. The directors
believe that the officers of Suncoast
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<PAGE> 22
Bancorp represent a range of business, banking and investment knowledge and
expertise. Suncoast Bancorp directors believe that the years of experience and
existing contacts of the senior officers offer Suncoast National Bank a
substantial opportunity to attract new relationships.
In addition, Suncoast Bancorp intends to hire two additional
experienced individuals to serve as Vice Presidents of Suncoast National Bank.
One such individual will serve as Suncoast National Bank's Chief Financial
Officer and will have experience in that capacity. The second such individual
will serve as Suncoast National Bank's Loan Officer and will have experience in
that capacity with community banks in the Sarasota Market.
Suncoast National Bank intends to encourage its employees to be active
in the civic, charitable and social organizations located in the local
communities. Most of Suncoast Bancorp's directors currently hold, and have held
in the past, leadership positions in a number of community organizations, and
intend to continue this active involvement in future years. Other members of the
management team will also be encouraged to volunteer for such positions. The
employees of Suncoast National Bank will be expected to emphasize service in
their dealings with clients. Because Suncoast National Bank intends to commence
operations with a staff of fewer than 15 full time employees, these employees
will need to be flexible in the duties they perform in an effort to satisfy
clients. In addition, management believes that the use of current technology
will permit each employee to devote more time and attention to personal service,
respond more quickly to a client's requests and deliver services in the most
timely manner possible. Management expects this "high touch-high tech" manner of
operations to be appealing to clients.
Upon its opening, Suncoast National Bank is planning to undertake a
marketing campaign utilizing an officer calling program. The purpose of this
call program will be to describe the products, services, and strategies of
Suncoast National Bank to both existing and new business prospects. Directors
are expected to market Suncoast National Bank actively through their business
and social contacts. All of the directors are active members of the Sarasota
community and their continued community involvement will provide an opportunity
to promote Suncoast National Bank, its products, and services. Suncoast National
Bank also will utilize community-based promotions. The campaign will emphasize
Suncoast National Bank's independence, local management and special focus on
client service. All employees will be expected to actively market Suncoast
National Bank's services.
Suncoast National Bank's initial legal lending limit will be
approximately $767,000. The board of directors may establish an "in-house" limit
that will be somewhat lower than Suncoast National Bank's legal lending limit.
The board may from time to time raise or lower the "in-house" limit as it deems
appropriate to comply with safe and sound banking practices and respond to
overall economic conditions. Initially, this limit will affect to a degree the
ability of Suncoast National Bank to seek relationships with the area's larger
businesses. However, in light of senior management's previous experience and the
relationships with a number of the region's other financial institutions,
Suncoast National Bank may originate loan volumes in excess of its lending limit
and sell participations in such loans to other banks. Likewise, it is quite
possible that Suncoast National Bank will purchase participations from other
area institutions. See "Risk Factors - Our Low Lending Amounts May Limit Our
Growth."
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MARKET AREA
Overview
Suncoast National Bank anticipates that the market area for its
services will be the southern part of Sarasota, Florida. The community of
Sarasota is located in Sarasota County on the Southwest coast of Florida. The
market area encompasses an area of approximately 25 square miles.
The population of Sarasota County was approximately 295,000 in 1995 and
approximately 305,000 in 1998. Suncoast National Bank's extended market area
encompasses all of Sarasota County.
Sarasota County offers recreational facilities, cultural events,
resorts, commercial office parks, residential developments, major transportation
routes, shopping centers, and entertainment areas. Access to the area is by
Interstate 75 and U.S. 41. Air service is through the Sarasota/Bradenton
International Airport and the Tampa International Airport, both less than an
hour's drive from the area. The area's annual average temperature of 75 degrees
provides comfortable year-round living.
According to the Sarasota County Chamber of Commerce, Inc. Statistical
Prospectus, the U.S. Department of Commerce rated the Metropolitan Statistical
Area, of which Sarasota is a part, fourth in the nation for job growth. Seasonal
population, which includes part-time residents who may live for several months
in Sarasota County while maintaining another residence elsewhere, increases from
January through April, thereby increasing the population of the county during
that time.
Industry and Employment
Sarasota is part of one of the fastest growing areas in the country.
Business and entertainment service industries, retail trade, government,
construction, real estate, finance/insurance, health care and
transportation/communication/utility form the basis for the area's business
economy. Commercial construction of small shopping centers and small office
parks are in progress throughout Sarasota County. Until the late 1950s and early
1960s, agriculture was a major economic basis for the area. Although not as
important as it once was, agriculture remains a part of the area's industry,
with citrus crops, nurseries, and vegetables making up the bulk of the
agriculture business.
The largest employers in Sarasota County are Vinyl Tech/PGT, Sun
Hydraulics, Apac-Florida, the School Board of Sarasota County, Sarasota Memorial
Hospital, Columbia Doctors Hospital, and FCCI Insurance Group. The Sarasota
County Government and the City of Sarasota also employ a significant number of
people.
Management believes that this diverse and growing commercial base
provides potential for business banking services, together with personal banking
services for owners and employees of these enterprises.
COMPETITION
Suncoast National Bank's market area is competitive and market share
is fragmented among a number of financial institutions. As of December 31,
1998, there were nine banks and thrifts with 10 offices in Suncoast National
Bank's market area. As of December 31, 1998, there were 32 banks and thrifts
operating approximately 148 offices in Sarasota County. Suncoast National Bank
also will face competition from credit unions, finance companies, insurance
companies, mortgage companies, securities brokerage and investment firms, money
market and mutual funds, loan production offices, asset-based nonbank lenders,
governmental organizations that may offer subsidized financing at rates lower
than those offered by Suncoast National Bank, and other providers of financial
services. Most of Suncoast National
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Bank's competitors have been in business for many years, have established
customer bases, are substantially larger, have substantially larger lending
limits than Suncoast National Bank, and can offer services, including multiple
branches and international banking services, that Suncoast National Bank will be
able to offer only through correspondent banks, if at all. In addition, most of
these entities have greater capital resources than Suncoast National Bank, which
among other things, may allow them to price their services at levels more
favorable to clients and to provide larger credit facilities than could Suncoast
National Bank. Suncoast Bancorp anticipates that Suncoast National Bank's legal
lending limit of approximately $767,000 will be adequate to satisfy the credit
needs of most of its clients and that the needs of its clients in excess of this
amount will be met through loan participation arrangements with correspondent
banks and others, however, there can be no assurance that Suncoast National Bank
will be successful in arranging loan participations that will be both
competitive with products offered by competitors of Suncoast National Bank and
advantageous to Suncoast National Bank.
Suncoast Bancorp believes that its personal service philosophy will
enhance Suncoast National Bank's ability to compete favorably in attracting
individuals and local businesses. Suncoast National Bank will delegate
appropriate activity to its personnel to deal effectively and in a timely
fashion with customer service needs. Suncoast National Bank will compete for
loans principally through the range and quality of the services it will provide,
interest rates and loan fees. Suncoast National Bank will actively solicit
deposit related clients and will compete for deposits by offering clients
personal attention, professional service and competitive interest rates.
PRODUCTS AND SERVICES
Suncoast National Bank will offer a range of short to intermediate term
personal and commercial loans.
Commercial Loans. Commercial lending will be directed toward small to
mid-sized businesses whose demands for funds either fall within the legal limits
of Suncoast National Bank or can be satisfied through loan participations
arranged by it. Suncoast National Bank intends to offer a full range of
commercial loan services including owner occupied construction and permanent
real estate loans, term loans, single pay loans and lines of credit, most of
which will be secured by the assets of the company and guaranteed by the
principals of the businesses. The purpose of a particular loan will determine
its structure.
Suncoast National Bank's commercial loans will be underwritten
primarily on the basis of the borrower's ability to service such debt from
reliable and stable sources of income. In all cases Suncoast National Bank will
establish a primary source and secondary source of repayment. As a general
practice, Suncoast National Bank expects to collateralize commercial loans with
various assets including real estate, equipment, inventory, accounts receivable
and, where applicable, other business and personal assets as may be deemed
appropriate. However, some commercial loans may be made on an unsecured basis.
Generally, short-term working capital loans are expected to be primarily
collateralized by short-term assets, whereas term loans and commercial real
estate loans are primarily expected to be collateralized by long-term fixed
assets. Commercial loans are generally riskier than mortgage loans because they
are typically underwritten on the basis of the ability to repay from the cash
flow of a business rather than on the ability of the borrower or guarantor to
repay. These loans also are more sensitive to adverse conditions in the economy
than mortgage loans. Further, the collateral underlying a commercial loan may
depreciate over time, cannot be appraised with as much precision as real estate,
and may fluctuate in value based on the success of the business. Risks
associated with these loans can be significant and include fraud,
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<PAGE> 25
bankruptcy, economic downturns, deteriorated or non-existing collateral,
customer financial problems, and changes in interest rates.
Residential Real Estate Loans. Suncoast National Bank will originate
real estate loans for the purpose of purchasing or refinancing one to four
family residences. The loans, which will generally be long-term, will have
either fixed or variable interest rates. Suncoast National Bank expects that any
fixed rate residential mortgage loans it generates will be sold in the secondary
market. Suncoast National Bank may retain certain balloon payment and variable
rate mortgages in its loan portfolio. This policy will periodically be subject
to review by management and Suncoast National Bank's board of directors as a
result of changing market and economic conditions and other relevant factors.
Variable rate mortgages decrease the risks associated with changes in interest
rates, but involve other risks because as interest rates increase the underlying
payments by the borrower increase, thus increasing the potential for default. At
the same time, the marketability of the underlying collateral may be adversely
affected by higher interest rates.
Additionally, Suncoast National Bank will make residential construction
loans for one to four family structures. Suncoast National Bank will require a
first lien on the land associated with the construction project and will offer
these loans to qualified homeowners and builders. Loan disbursements will
require on-site inspections to assure the project is on budget and that the loan
proceeds are being properly applied to the specific construction project. The
loan-to-value ratio for such loans generally will be 80 percent of cost or
appraised value, whichever is lower. To be eligible for a residential
construction loan, the borrower must be pre-approved for permanent financing.
The risk of loss on residential construction lending is dependent upon the
accuracy of the initial appraisal of the property's projected value at
completion of construction, delays and cost overruns, and the possibility that
Suncoast National Bank may be required to advance funds beyond the amount
originally committed to permit completion of the project, thereby possibly
reducing the home's eventual equity. The risk is also dependent upon the
performance of the builder in constructing the project to the plans and
specifications of the borrower, as well as Suncoast National Bank's ability to
administer and control all phases of the construction disbursements.
Consumer Loans. Suncoast National Bank plans to make consumer loans,
consisting primarily of installment loans to individuals for personal, family
and household purposes, including loans for automobiles, home improvements,
second mortgages, home equity lines of credit and investments. Consumer loans
typically have shorter terms and carry higher interest rates than that charged
on other types of loans such as residential mortgage loans. Consumer loans,
however, do pose additional risks of collectibility when compared to such other
loans. Suncoast National Bank will be required to rely on the borrower's ability
to repay, since the collateral may be of reduced value at the time of
collection. Accordingly, the initial underwriting must establish the borrower's
credit history and capacity to repay the loan as scheduled. Additional risks
associated with consumer loans include fraud, deteriorated or non-existent
collateral, general economic downturn, customer financial problems, and changes
in interest rates. Loss or decline of income by the borrower due to layoff,
divorce or other reasons, or unexpected medical or other personal expenses, also
represent unplanned occurrences that may increase the risk of default to
Suncoast National Bank.
Suncoast National Bank's loan approval policies will provide for
various levels of officer lending authority. When the amount of aggregate loans
to a single borrower exceeds that individual officer's lending authority, the
loan request will be considered and approved by an officer with a higher lending
limit or Suncoast National Bank's Loan Committee. Suncoast National Bank will
not make any loans to
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any of its directors or executive officers unless the loan is approved by the
board of directors of Suncoast National Bank and is made on terms no more
favorable to such person than would be available to a person unaffiliated with
Suncoast National Bank.
Suncoast National Bank's lending activities will be subject to a
variety of lending limits imposed by Federal law. Under the regulations of the
Comptroller of the Currency, a national bank's total outstanding loans and
extensions of credit, both secured and unsecured, to one borrower may not exceed
15% of the bank's capital and surplus, plus an additional 10% of the bank's
capital and surplus if the amount that exceeds the 15% general limit is fully
secured by readily marketable collateral, as defined in the regulations. Under
these regulations, Suncoast National Bank's initial general lending limit to one
borrower will be approximately $767,000, plus an additional $511,000 for loans
secured by readily marketable collateral. While Suncoast National Bank expects
generally to employ more conservative lending limits, the board of directors
will have discretion to lend up to these legal lending limits.
Deposit Services. Suncoast National Bank intends to offer a range of
deposit services, including checking accounts, NOW accounts, savings accounts
and time deposits of various types. The transaction accounts and time
certificates will be tailored to the principal market area at rates competitive
with those offered in the area. All deposit accounts will be insured by the FDIC
up to the maximum amount permitted by law. Suncoast National Bank intends to
solicit these accounts from individuals, businesses, associations,
organizations, financial institutions and government authorities. It does not
intend to accept brokered deposits. Suncoast National Bank may also use
alternative funding sources as needed, including advances from Federal Home Loan
Banks, conduit financing and the packaging of loans for securitization and sale.
Other Bank Services. Suncoast National Bank currently plans to offer
other services, including a courier service, credit cards, money orders,
traveler's checks, automated teller services with access to one or more regional
or national automated teller networks and safe deposit services. Although
Suncoast National Bank has been involved in discussions with a number of vendors
regarding the provision of such services, Suncoast National Bank does not expect
to make final decisions with respect to the providers of such services until
approximately 60 days before its commencement of business. Suncoast National
Bank also intends to establish relationships with correspondent banks and other
financial institutions to provide other services for its clients, including
requesting correspondent banks to participate in loans where the loan amount
exceeds Suncoast National Bank's policies or legal lending limit. Suncoast
National Bank does not anticipate initially providing fiduciary services. The
need for such services, however, will be reviewed periodically for possible
future inclusion among Suncoast National Bank's products and services.
It is anticipated that Suncoast National Bank's hours of operation will
initially be 8:00 a.m. to 6:00 p.m., Monday through Friday and from 8:00 a.m. to
12:00 p.m. on Saturday. In addition, Suncoast National Bank's employees will be
available to clients wishing to make appointments outside traditional banking
hours, either at Suncoast National Bank or at the clients' homes or businesses.
By providing "appointment banking," Suncoast National Bank intends to
demonstrate its high level of responsiveness and service to its clients.
Data Processing. Many of the data processing services, including
on-line teller service, will be purchased on a contract basis, reducing the
number of persons otherwise required to handle the operational functions of
Suncoast National Bank. Suncoast National Bank is in the process of discussing
arrangements with potential data processing companies.
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ASSET/LIABILITY MANAGEMENT
In addition to loans, Suncoast National Bank will make other
investments primarily in obligations of the United States or obligations
guaranteed as to principal and interest by the United States and other taxable
securities. No investment in any of those instruments will exceed any applicable
limitation imposed by law or regulation. The investment portfolio will be
structured so as to provide for an ongoing source of funds for meeting loan and
deposit demands, and for reinvestment opportunities to take advantage of changes
in the interest rate environment.
It will be the objective of Suncoast Bancorp and Suncoast National Bank
to manage assets and liabilities to provide a satisfactory, consistent level of
profitability within the framework of established cash, loan, investment,
borrowing and capital policies. Certain of the officers of Suncoast National
Bank will be responsible for monitoring policies and procedures that are
designed to insure acceptable composition of the asset/liability mix, and
stability and leverage of all sources of funds while adhering to prudent banking
practices. It also will be the overall philosophy of management to support asset
growth primarily through growth of deposits, which include deposits of all
categories made by individuals, partnerships and corporations. Management of
Suncoast National Bank will seek to invest the largest portion of its assets in
commercial, consumer and real estate loans. Bank management also will view
Suncoast National Bank's investment portfolio as a source of liquidity and as a
means to balance its asset/liability mix. Suncoast National Bank will invest
primarily in obligations of the United States or obligations guaranteed as to
principal and interest by the United States, or other taxable securities and in
certain obligations of states and municipalities. Suncoast National Bank also
will enter into Federal Funds transactions with its principal correspondent
banks, which represent a short-term, and generally overnight, loan from one bank
to another, to balance its liquidity needs.
Suncoast National Bank intends to monitor its asset/liability mix on a
daily basis and a quarterly report reflecting interest-sensitive assets and
interest-sensitive liabilities will be prepared and presented to Suncoast
National Bank's Asset and Liability Management Committee. The objective of this
policy will be to manage liquidity and control interest-sensitive assets and
liabilities so as to minimize the impact of substantial movements in interest
rates on Suncoast National Bank's earnings.
BANK PREMISES
Suncoast Bancorp has entered into a contract to lease a facility from
Palmer Medical Center, LTD, an unaffiliated third party, which will serve as
Suncoast National Bank's main office at 8592 Potter Park Drive, Sarasota,
Florida. The site is located at the intersection of U.S. 41 and Central Sarasota
Parkway, a major intersection in Sarasota County. The surrounding area is
mixed-use commercial and industrial properties. The intersection is within two
miles of the center of the area's residential development.
The term of the lease will be for a period of five years beginning on
the day the lessor thereunder receives a certificate of occupancy for the
building. Under the lease, Suncoast Bancorp has two options to renew the lease
term, each for a five-year period. Suncoast Bancorp expects that this facility
will be completed and available for Suncoast National Bank's use in the second
quarter of 1999.
The banking facility consists of approximately 4,000 square feet of
office space. The facility will have four inside teller stations, three customer
service platform stations, two drive-through lanes, and a walk-up and depository
ATM lane.
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EMPLOYEES
Suncoast National Bank intends to commence operations with a staff of
approximately 13 full-time equivalent employees. John T. Stafford will serve as
the President and Chief Executive Officer of Suncoast Bancorp and Suncoast
National Bank. William F. Gnerre will serve as Executive Vice President of
Suncoast Bancorp and Suncoast National Bank and Chief Operating Officer and
Senior Loan Officer of Suncoast National Bank. At present, Messrs. Stafford and
Gnerre are the only employees actively involved in the organization of Suncoast
Bancorp and Suncoast National Bank. Since April 1998 Mr. Gnerre has been
receiving a monthly consulting fee of $4,000 as a part of his efforts in
connection with the organization of Suncoast National Bank. This fee increased
to $7,000 effective April 15, 1999 and will be continued until such time as
Suncoast National Bank opens and enters into employment agreements with Messrs.
Stafford and Gnerre. Mr. Stafford presently receives no monthly fee but does
receive a monthly automobile allowance of $900. See "Management -- Employment
Agreements."
Suncoast Bancorp will hire additional officers and employees prior to
commencement of Suncoast National Bank's operations. Company management
anticipates that Suncoast Bancorp will increase its staff from 13 to 16
full-time equivalent employees during the second year of its operations in
order to provide for anticipated growth. Suncoast Bancorp plans to employ as
officers and employees of Suncoast National Bank primarily persons from
Suncoast National Bank's market areas who have experience in banking. Suncoast
Bancorp intends to pay competitive salaries to attract and retain such officers
and employees.
LEGAL PROCEEDINGS
Neither Suncoast Bancorp nor Suncoast National Bank is a party to any
pending legal proceeding. Management believes there is no litigation threatened
in which Suncoast Bancorp and Suncoast National Bank faces potential loss or
exposure or which will have a material adverse impact on shareholders' equity
or Suncoast Bancorp's business or financial condition upon completion of the
offering.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of Suncoast Bancorp and Suncoast
National Bank and their ages, and positions with Suncoast Bancorp and Suncoast
National Bank are set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH SUNCOAST BANCORP AND SUNCOAST NATIONAL BANK (1)
- ---- --- --------------------------------------------------------------
<S> <C> <C>
John T. Stafford 51 President, Chief Executive Officer and Director
Larry Berberich 60 Director
Henry E. Black, M.D. 63 Director
H. R. Foxworthy 66 Chairman of the Board
William F. Gnerre 59 Executive Vice President, Secretary and Director
</TABLE>
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<TABLE>
<S> <C> <C>
James C. Rutledge 51 Director
Stanley A. Williams 55 Director
Roy A. Yahraus 51 Director
</TABLE>
- ------------------------------------
(1) Each of these individuals serves Suncoast Bancorp and Suncoast National
Bank in the same capacities set forth herein, except that William F.
Gnerre also serves as the Chief Operating Officer and Senior Loan
Officer of Suncoast National Bank.
All of the directors of Suncoast Bancorp and Suncoast National Bank
hold office until the earlier of the next annual meeting of their respective
shareholders and until their successors have been duly elected and qualified, or
their death, resignation, or removal. Officers of Suncoast Bancorp and Suncoast
National Bank are elected annually by their respective boards of directors to
hold office until the earlier of their death, resignation, or removal. There are
no family relationships between any of the directors or officers of Suncoast
Bancorp or Suncoast National Bank.
Set forth below is a description of the business experience during the
past five years or more, and other biographical information, for the directors
and executive officers identified above.
John T. Stafford, a director of Suncoast Bancorp and Suncoast National
Bank, has been elected by the board of directors to serve as President and Chief
Executive Officer of Suncoast Bancorp and Suncoast National Bank. He started his
banking career in 1971 with First Trust Union Bank in Cuba, N.Y. He moved to
Florida in 1979 and joined Southwest Florida Banks, Ft. Myers, Florida. He has
held a number of senior executive level positions since that time, including,
Chairman, President, CEO and Director of C&S National Bank, Sarasota, Florida,
from September 1984 to February 1992, and President, CEO and Director of The
Commercial Bank, Douglasville, Georgia, from March 1994 to April 1996. Since
that time, Mr. Stafford has served as Vice Chairman of FCCI Insurance Group in
Sarasota, Florida.
Mr. Stafford is a founder of the Suncoast Foundation for Handicapped
Children, which has generated over three million dollars in revenues and
buildings since 1983. He also has been active with the United Way, American
Heart Association, Shrine Crippled Children's hospitals, Chamber of Commerce,
Florida Bar Association Grievance Committee and the Florida Highway Patrol
Advisory Board. Mr. Stafford was born in Cuba, New York and received his high
school graduation certificate from Cuba Central School in 1965. He has attended
the University of Alaska, West Virginia University and Eckerd College, St.
Petersburg, Florida and also received an honorable discharge from the United
States Air Force in 1971.
William F. Gnerre, a director of Suncoast Bancorp and Suncoast National
Bank, has been elected by the board of directors to serve as Executive Vice
President of Suncoast Bancorp and Suncoast National Bank. He also has been
elected to serve as Chief Operating Officer and Senior Loan Officer of Suncoast
National Bank. He began his banking career in 1960 with the Hackensack Trust
Company. In 1965, he joined United Jersey Bank as a management trainee. He rose
to the position of Vice President/Branch Administration, with responsibility for
the 30 branches of United Jersey Bank in Northern New Jersey. He moved to
Sarasota, Florida in February 1978, when he joined Southeast Bank as Vice
President/Cashier. He joined the National Bank of Sarasota in April 1983 as Vice
President/Commercial Lender. He
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advanced to the Division Senior Credit Officer in 1985 and Senior Vice President
and Regional Senior Credit Officer in September 1990. From April 1994 to
February 1997, he served as Executive Vice President of The Commercial Bank,
Douglasville, Georgia as EVP/SCO, where he had responsibility for the day to day
operations of this $150 million community bank. He has been involved in the
Chamber of Commerce, the Sarasota Committee of 100, the United Way and the
Habitat for Humanity. Mr. Gnerre was born in Hackensack, New Jersey on August
21, 1939 and graduated from Hackensack High School in 1957. He attended Rutgers,
New Brunswick, New Jersey, and the University of Oklahoma, Norman, Oklahoma, and
received an honorable discharge from the United States Navy in 1960.
Larry Berberich, a director of Suncoast Bancorp and Suncoast National
Bank, graduated from Mt. Carmel High School, Mt. Carmel, Illinois in 1957. Mr.
Berberich's business background includes ownership of Cirtech Corp., Kansas
City, Kansas, a high tech aerospace company that designed, developed and
manufactured military and aerospace systems. Prior to that he owned Empire
Systems Corp. and Berberich Associates, both of which were located in Dayton,
Ohio. Empire Systems was a distributor of electronic equipment and Berberich
Associates functioned as a manufacturer's representative, handling the same
types of military and aerospace systems as Cirtech Corp. Mr. Berberich served on
the board of directors of the Mid American Bank, Roeland Park, Kansas, from 1980
until his retirement in 1990.
Mr. Berberich's civic and community activities include: Sarasota School
Board Capital Needs Committee, Chairman of the Sarasota County School Board Tax
Oversight Committee, Chairman of the Design Development Board for Prestancia
Community Association, President of the Prestancia Community Association and a
member of the Board of Governors of the Palmer Ranch Master Association. He also
served on the board of the Sarasota YMCA and the Lost Child Network, Kansas
City.
Henry E. Black, M.D., a director of Suncoast Bancorp and Suncoast
National Bank, graduated from Birmingham University Medical School in 1958, with
Bachelor of Medicine and Bachelor of Surgery degrees. From 1958 through 1959 he
was involved in internships at the United Birmingham Hospital Group and the
Selly Oak Hospital, Birmingham, with emphasis on acute medical emergencies and
obstetrics and gynecology, leading to a post graduate diploma in OB/GYN. He
served in the Royal Navy as a medical officer from 1960 to 1967. In 1967, he
joined the medical staff of Jones Memorial Hospital, Wellsville, New York, where
he was appointed Chief of Medicine in June 1968. He was appointed to the staff
of Doctors Hospital and Sarasota Memorial Hospital in October 1983. In 1984, he
opened the Cardiovascular Health Institute in Sarasota, a medical practice
specializing in non-invasive cardiology, where he continues to practice.
Harvey Ronald Foxworthy, a director of Suncoast Bancorp and Suncoast
National Bank, is a resident of Sarasota, where he graduated from Sarasota High
School in 1950 and Sarasota Vo-Tech in 1957. He founded Rusty Plumbing, Inc., a
commercial plumbing contractor, in 1956 and has operated this company since
inception. He has been involved in a number of other business ventures including
the Development of Laural Oak Country Club. His involvement with community
activities in the Sarasota market includes: directorates with Ellis Bank & Trust
Company (1976-1988), NCNB Sarasota (1988-1989), C & S Bank, Sarasota
(1989-1992), and C & S National Bank of Florida, Ft. Lauderdale (1991-1992).
Mr. Foxworthy is a founder and director of FCCI Group, a large workers
compensation insurance company in Florida, and is the audit committee chairman
for all of its subsidiaries. He is a founder and director of the Florida
Employees Exchange, a not-for-profit corporation, with its 8,000 members, and is
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state chairman of its Political Action Committee. He is the past President of
the Plumbing and Heating Contractors of Florida. His community activities
include: founder and director of the Suncoast Chapter of the Foundation for
Handicapped Children and chairman of its building program. He is also a founder
of the Argus Foundation, a local government oversight organization, serving on
its board for 12 years.
James C. Rutledge, a director of Suncoast Bancorp and Suncoast National
Bank, received his high school diploma from the Culver Military Academy, Culver,
Indiana, in 1965 and received a Bachelor of Business Science from the University
of Mississippi, Oxford, Mississippi in 1969. He received his Florida Real Estate
License in 1972 and began his career in real estate sales and investments in
1973. He has been a partner in the Real Estate Marketing Group, Sarasota,
Florida since October 1995. Mr. Rutledge has served on the Board of Directors of
United First Federal Savings and Loan Association, Sarasota, Florida from 1984
to 1989, and on the Board of Directors of Barnett Bank of SW Florida from 1989
to 1997. He served as chairman of the loan and audit committees of both boards
during his 13 years of service.
Mr. Rutledge is a member of the Covenant Life Presbyterian Church and
is involved with a non-profit development program for senior housing. His
community activities also include a directorship on the March of Dimes, and five
years on the Board of Directors of Bethesda Outreach Ministries.
Stanley A. Williams, a director of Suncoast Bancorp and Suncoast
National Bank, graduated from Hayesville High School, Hayesville, Ohio in 1961.
Mr. Williams attended Ohio State University where he earned a degree of Doctor
of Dental Surgery in 1968. He started a solo dental practice in Newton Falls,
Ohio in 1968, and built it into a large dental center, which he sold in 1984. He
earned an MBA with a concentration in finance from Ohio State University in
1979. From 1975 through 1987, he was involved in the development of several
townhouse and large single family homes projects in the Columbia, Maryland area
and developed residential property in Annapolis, Maryland. He has also been
involved in the development of a commercial property complex in Newton Falls,
Ohio. Mr. Williams is now retired.
Mr. Williams' community involvement includes serving on the school
board in Newton Falls, Ohio, including a term as its president. He also has
assisted in raising funds for the olympic rowers and served on the finance
committee of the Presbyterian Church. He has been a resident of Sarasota since
1990.
Roy A. Yahraus, a director of Suncoast Bancorp and Suncoast National
Bank, was a principal owner of Gulf Coast Building Materials, Sarasota, from
1972 until 1997, when the company was sold to a subsidiary of United States
Gypsum. He has remained with the company as its sales manager.
Mr. Yahraus serves on the Board of Directors of Sarasota Manatee
Roofing Association, which seeks out families needing new roofs for their homes,
but who are not financially capable of paying for them. The association donates
the materials and labor to install a new roof. The association also donates
funds to the Sarasota Boys and Girls Club and Hope House. Mr. Yahraus has been a
member of the Shriners for 23 years.
Executive Officers. In addition to Messrs. Stafford and Gnerre,
Suncoast Bancorp also anticipates that Suncoast National Bank will hire two
additional experienced individuals to serve as Vice Presidents of Suncoast
National Bank. One such individual will serve as Suncoast National Bank's Loan
Officer and have experience in that capacity within the Sarasota market area.
The second such individual will serve as Suncoast National Bank's Chief
Financial Officer and will have experience in that capacity with community
banks.
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COMMITTEES OF SUNCOAST BANCORP AND SUNCOAST NATIONAL BANK
Presently Suncoast Bancorp's board of directors has an Audit Committee
and a Compensation Committee. The Audit Committee will review internal audit
procedures for Suncoast Bancorp and Suncoast National Bank and it will
coordinate and review Suncoast Bancorp's annual audit by its independent
auditors. The members of this committee consist of Messrs. Berberich, Black,
Foxworthy and Rutledge. The Compensation Committee will generally oversee the
employment practices and employee benefits of Suncoast Bancorp and Suncoast
National Bank. The members of this committee consist of Messrs. Black,
Foxworthy, Stafford, Williams and Yahraus.
The committees of Suncoast National Bank consist of an Asset -
Liability Committee, Audit and Insurance Committee, Executive Committee, and
Loan Committee. Set forth below is additional information regarding these
committees:
Asset -- Liability Committee. - The members of this committee consist
of Messrs. Gnerre, Stafford, Williams and Yahraus. This committee is
responsible for:
- overall investment strategy, including liquidity and risk
management,
- monitoring deposit level trends and pricing,
- monitoring asset level trends and pricing,
- portfolio investment decisions, and
- establishing appropriate levels of insurance.
Audit and Insurance Committee. - The members of this committee consist
of Messrs. Berberich, Black, Foxworthy and Rutledge. This committee is
responsible for:
- insuring that the board of directors of Suncoast National Bank
receives objective information regarding policies, procedures
and controls of Suncoast National Bank including auditing,
accounting, internal accounting controls, and financial
reporting,
- recommending the appointment of an independent auditor on an
annual basis,
- reviewing independent auditor's report and management's
response,
- reviewing all reports from regulatory authorities and
management's response,
- establishing independent reviews and audits,
- insuring Suncoast National Bank is in full compliance with all
pertinent regulations and laws,
- establishing an appropriate and independent testing program
for compliance, and
- establishing appropriate levels of insurance.
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<PAGE> 33
Executive Committee. - The members of this committee consist of Messrs.
Black, Foxworthy, Stafford, Williams and Yahraus. This committee is
responsible for:
- establishing appropriate levels of compensation throughout
Suncoast National Bank,
- analyzing compensation levels on an annual basis,
- recommending overall compensation increases and changes in
benefits to the board for approval,
- establishing policies with regard to compensation and benefits
at Suncoast National Bank,
- recommending all compensation increases, benefit changes and
bonuses for senior officers to the board for approval,
- developing a proactive CRA program, and
- developing programs to insure compliance with applicable laws.
Loan Committee. - The members of this committee consist of Messrs.
Berberich, Foxworthy, Gnerre, Rutledge and Stafford. This committee is
responsible for:
- establishing, in conjunction with management, and approving
all major policies and procedures pertaining to credit,
- establishing a loan approval system,
- reviewing all loans in excess of specific amounts determined
in policies and procedures,
- reviewing all past due reports, rated loan reports, real
estate owned, non-accrual reports, and other indicators of
overall loan portfolio quality,
- assuring adequate funding of the loan loss reserve exists, and
- handling other matters pertaining to the credit function, such
as yields and loan concentrations.
COMPENSATION OF DIRECTORS
The directors of Suncoast Bancorp are not currently compensated for
their attendance at Suncoast Bancorp's regularly scheduled or special meetings
or for their services. After Suncoast National Bank opens, directors will
receive a fee of $300 for each board meeting attended and non-employee directors
also will receive a fee of $100 for each committee meeting attended. Suncoast
Bancorp also has approved and adopted the Suncoast Bancorp, Inc. Director Stock
Option Plan. As of the date of this prospectus, no options have been granted
under this plan. See "Stock Option Plans - Suncoast Bancorp, Inc. Director Stock
Option Plan."
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<PAGE> 34
EMPLOYMENT AGREEMENTS
Suncoast National Bank intends to enter into employment agreements with
Messrs. Stafford and Gnerre. The agreements will be for a three-year period and
will automatically renew thereafter for successive one-year periods, unless
either party provides prior notice to the other in accordance with the terms of
the agreements. The employment agreements will provide for Messrs. Stafford and
Gnerre to receive an initial salary of $96,000 and $84,000 respectively, subject
to annual adjustments and such bonuses and other compensation as may be
determined by the board of directors. The employment agreements also will
provide for receipt of employee benefits and reimbursement for business related
expenses. The employment agreements may be terminated by Suncoast National Bank
for cause or by the executive for good reason or as a result of certain actions
following any change in control of Suncoast Bancorp or Suncoast National Bank.
The employment agreements will provide that Messrs. Stafford and Gnerre will not
work for any financial institution located within a radius of 50 miles of any
office of Suncoast National Bank or solicit bank employees and customers for a
one-year period following termination of their employment except when the
employment is terminated as a result of good reason or following a change in
control of Suncoast Bancorp.
STOCK OPTION PLANS
Suncoast Bancorp, Inc. Employee Stock Option Plan
Suncoast Bancorp's board of directors and sole shareholder have adopted
the Suncoast Bancorp, Inc. Employee Stock Option Plan (the "Employee Stock
Option Plan") to promote equity ownership of Suncoast Bancorp by selected
officers and employees of Suncoast Bancorp and Suncoast National Bank, to
increase their proprietary interest in the success of Suncoast Bancorp and to
encourage them to remain in the employ of Suncoast Bancorp.
Administration. The Employee Stock Option Plan will be administered by
Suncoast Bancorp's Compensation Committee (the "Committee"), comprised of at
least two non-employee directors appointed by Suncoast Bancorp's board of
directors. The Committee will have the authority to select the officers and
employees to whom awards may be granted, to determine the terms of each award,
to interpret the provisions of the Employee Stock Option Plan and to make all
other determinations that it may deem necessary or advisable for the
administration of the Employee Stock Option Plan.
The Employee Stock Option Plan provides for the grant of "incentive
stock options," as defined under Section 422(b) of the Internal Revenue Code of
1986. The board of directors has reserved 28,000 common shares for issuance
under the Employee Stock Option Plan, including issuance of options for 7,000
shares each to Messrs. Stafford and Gnerre. In general, if any award granted
under the Employee Stock Option Plan expires, terminates, is forfeited or is
canceled for any reason, the common shares allocable to such award may again be
made subject to an award granted under the Employee Stock Option Plan.
Awards. Officers and policy-making employees of Suncoast Bancorp and
Suncoast National Bank are eligible to receive grants under the Employee Stock
Option Plan. Awards may be granted subject to a vesting requirement and in any
event will become fully vested upon a merger or change of control of
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<PAGE> 35
Suncoast Bancorp. The exercise price of incentive stock options must at least
equal the fair market value of the common shares subject to the option on the
date the option is granted.
Each officer and key employee eligible to participate in the Employee
Stock Option Plan will be notified by the Committee. To receive an award under
the Employee Stock Option Plan, an award agreement must be executed which
specifies the type of award to be granted, the number of common shares to which
the award relates, the terms and conditions of the award and the date granted.
In the case of an award of options, the award agreement will also specify the
price at which the common shares subject to the option may be purchased, and the
dates on which the option becomes exercisable.
The full exercise price for all common shares purchased upon the
exercise of options granted under the Employee Stock Option Plan must be paid by
cash, personal check, or common shares owned at the time of exercise. Stock
options granted to employees under the Employee Stock Option Plan may remain
outstanding and exercisable for 10 years from the date of grant or until the
expiration of 90 days or such lesser period as the Committee may determine, from
the date on which the person to whom they were granted ceases to be employed by
Suncoast Bancorp. Options granted under the Plan are exercisable in increments
of 20% per year commencing one year after the date of grant.
Income Tax. Employee stock options granted under the Employee Stock
Option Plan have several advantageous tax attributes to the recipient under the
income tax laws. No taxable income is recognized by the option holder for income
tax purposes at the time of the grant or exercise of an employee stock option,
although neither is there any income tax deduction available to Suncoast Bancorp
as a result of such a grant or exercise. Any gain or loss recognized by an
option holder on the later disposition of common shares acquired pursuant to the
exercise of an incentive stock option generally will be treated as capital gain
or loss if such disposition does not occur prior to one year after the date of
exercise of the option.
Amendment and Termination. The Employee Stock Option Plan expires
October 15, 2008, unless sooner terminated by the board of directors. The board
of directors has authority to amend the plan in such manner as it deems
advisable. The Employee Stock Option Plan provides for appropriate adjustment,
as determined by the Committee, in the number and kind of shares subject to
unexercised options, in the event of any change in the outstanding common shares
by reason of a stock split, stock dividend, combination or reclassification of
shares, recapitalization, merger or similar event.
Suncoast Bancorp, Inc. Director Stock Option Plan
Suncoast Bancorp's board of directors and sole shareholder also have
adopted the Suncoast Bancorp, Inc. Director Stock Option Plan ("Director Stock
Option Plan") to compensate the non-employee directors in recognition of their
efforts in organizing Suncoast Bancorp and Suncoast National Bank, and the risk
incurred during the organizational process. The Director Stock Option Plan does
not preclude the grant of options to non-employee directors. However, Suncoast
Bancorp does not intend to issue options from the Director Stock Option Plan to
employee directors.
Administration. The Director Stock Option Plan will be administered by
the board of directors. The board of directors has reserved 42,000 common shares
for issuance under the Director Stock Option Plan, all of which will be issued
upon the opening of Suncoast National Bank to the current non-employee directors
based upon 7,000 options for each individual.
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<PAGE> 36
Option Terms. The exercise price for each of the outstanding options
will be $10.00 per share, which must be paid by cash, personal check, or common
shares owned at the time of exercise. The options are exercisable for 10 years
from the date of grant or until the expiration of 90 days from the date on which
the person to whom they were granted ceases to be a director of Suncoast Bancorp
or Suncoast National Bank. Options granted under the Director Stock Option Plan
are exercisable in increments of 20% per year commencing on the date of grant.
Amendment and Termination. The Director Stock Option Plan expires
October 15, 2008, unless sooner terminated by the board of directors. The board
of directors has the authority to amend the plan in such manner as it deems
advisable. The Director Stock Option Plan provides for appropriate adjustment,
as determined by the board, in the number and kind of shares subject to
unexercised options, in the event of any change in the outstanding common shares
by reason of a stock split, stock dividend, combination or reclassification of
shares, recapitalization, merger or similar event.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ORGANIZATIONAL ADVANCES
Suncoast Bancorp has obtained a $425,000 line of credit to pay for
expenses in connection with the organization of Suncoast National Bank. The line
of credit is guaranteed by the directors of Suncoast Bancorp and Suncoast
National Bank and will be repaid from the net proceeds of this offering.
TRANSACTIONS WITH AFFILIATES
Suncoast Bancorp and Suncoast National Bank expect to have banking and
other business transactions in the ordinary course of business with directors
and officers of Suncoast Bancorp and Suncoast National Bank, including members
of their families or corporations, partnerships, or other organizations in which
such directors and officers have a controlling interest. If such transactions
occur, they:
- will be made in the ordinary course of business,
- will be made on substantially the same terms, including price,
or interest rate, and collateral, as those prevailing at the
time for comparable transactions with unrelated parties, and
- in the opinion of management, will not involve more than the
normal risk of collectibility or present other unfavorable
features to Suncoast Bancorp or Suncoast National Bank.
Additionally, federal banking laws restrict transactions between a national bank
and an "affiliate", as defined in those laws, and the amount and types of loans
that a national bank may make to an executive officer of a national bank. The
laws of the State of Florida also restrict "affiliated transactions" between
Suncoast Bancorp and an "interested shareholder" or any "affiliate" or
"associate" of an interested shareholder, as those terms are defined in Florida
law. See "Supervision and Regulation."
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<PAGE> 37
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
Except for one common share issued and sold to H. R. Foxworthy,
Chairman of the board of Suncoast Bancorp, for the sole purpose of its initial
organization, Suncoast Bancorp currently has no common shares outstanding. This
organizational share will be repurchased at its original issue price of $1.00
concurrently with the closing of the offering.
The following table sets forth certain information regarding the
anticipated beneficial ownership of Suncoast Bancorp's common shares by:
- each director and each executive officer of Suncoast Bancorp,
and
- all directors and executive officers of Suncoast Bancorp as a
group.
No person is expected to be the beneficial owner of more than 5% of the
outstanding common shares following the offering. Except as otherwise indicated,
the persons named in the table will have sole voting and investment power with
respect to all of the common shares owned by them.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
---------------------------
NUMBER PERCENT
NAME OF BENEFICIAL OWNER OF SHARES (1) OF CLASS(2)
- ------------------------ ------------- -----------
DIRECTORS AND EXECUTIVE OFFICERS
<S> <C> <C>
Larry Berberich................................................................... 20,000 (3) 2.86%
Henry E. Black, M.D............................................................... 20,000 (3) 2.86%
H. R. Foxworthy................................................................... 20,000 (3) 2.86%
William F. Gnerre................................................................. 10,000 (4) 1.43%
James C. Rutledge................................................................. 20,000 (3) 2.86%
John T. Stafford.................................................................. 20,000 (4) 2.86%
Stanley A. Williams............................................................... 20,000 (3) 2.86%
Roy A. Yahraus.................................................................... 20,000 (3) 2.86%
-------
All directors and executive officers as a group (8 persons)....................... 150,000 (5) 21.43%
</TABLE>
- --------------
(1) In accordance with Rule 13d-3 promulgated pursuant to the Securities
Exchange Act of 1934, a person is deemed to be the beneficial owner of
a security for purposes of the rule if he or she has or shares voting
power or dispositive power with respect to such security or has the
right to acquire such ownership within sixty days. As used herein,
"voting power" is the power to vote or direct the voting of shares, and
"dispositive power" is the power to dispose or direct the disposition
of shares, irrespective of any economic interest therein.
(2) In calculating the percentage ownership for a given individual or
group, the number of common shares outstanding includes unissued shares
subject to options, warrants, rights or conversion privileges
exercisable within sixty days held by such individual or group, but are
not deemed outstanding by any other person or group. This information
assumes no exercise of the over-allotment option granted to the
underwriter.
(3) Excludes options which are not currently exercisable held by such
person to purchase 7,000 common shares granted pursuant to the Director
Stock Option Plan. See "Management - Stock Option Plans - Suncoast
Bancorp, Inc. Director Stock Option Plan."
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<PAGE> 38
(4) Excludes options which are not currently exercisable held by such
person to purchase 7,000 common shares granted pursuant to the Employee
Stock Option Plan. See "Management - Stock Option Plans - Suncoast
Bancorp, Inc. Employee Stock Option Plan."
(5) Excludes options which are not currently exercisable to purchase 56,000
common shares. Each such individual will be granted options to purchase
7,000 common shares as indicated in footnotes 3 and 4 above.
SUPERVISION AND REGULATION
Banks and their holding companies, and many of their affiliates, are
extensively regulated under both federal and state law. The following is a brief
summary of several statutes, rules, and regulations affecting Suncoast Bancorp
and Suncoast National Bank. This summary is qualified in its entirety by
reference to the particular statutory and regulatory provisions referred to
below and is not intended to be an exhaustive description of the statutes or
regulations applicable to the business of Suncoast Bancorp and Suncoast National
Bank. Any change in the applicable law or regulation may have a material effect
on the business and prospects of Suncoast Bancorp and Suncoast National Bank.
See "Risk Factors -- Extensive Regulations May Limit Our Operations and Ability
to Compete." Supervision, regulation, and examination of banks by regulatory
agencies are intended primarily for the protection of depositors, rather than
shareholders.
Bank Holding Company Regulation. Suncoast Bancorp will be a bank
holding company registered with the Federal Reserve under the BHC Act. As such,
Suncoast Bancorp will be subject to the supervision, examination and reporting
requirements of the BHC Act and the regulations of the Federal Reserve. Suncoast
Bancorp is required to furnish to the Federal Reserve an annual report of its
operations at the end of each fiscal year, and such additional information as
the Federal Reserve may require pursuant to the BHC Act. The BHC Act requires
that a bank holding company obtain the prior approval of the Federal Reserve
before (1) acquiring direct or indirect ownership or control of more than 5% of
the voting shares of any bank, (2) taking any action that causes a bank to
become a subsidiary of the bank holding company, or (3) merging or consolidating
with any other bank holding company.
The BHC Act further provides that the Federal Reserve may not approve
any transaction that would result in a monopoly of banking in any section of the
United States, or substantially lessen competition, unless the anticompetitive
effects are clearly outweighed by the public interest in meeting the convenience
and needs of the community to be served. The Federal Reserve is also required to
consider the financial and managerial resources and future prospects of the bank
holding companies and banks concerned and the convenience and needs of the
community to be served. Consideration of financial resources generally focuses
on capital adequacy and consideration of convenience and needs issues includes
the parties' performance under the Community Reinvestment Act of 1977 (the
"CRA"), both of which are discussed below.
The BHC Act generally prohibits a bank holding company from engaging in
activities other than banking, or managing or controlling banks or other
permissible subsidiaries, and from acquiring or retaining control of any company
engaged in any activities other than those activities determined by the Federal
Reserve to be closely related to banking or managing or controlling banks. In
determining whether a particular activity is permissible, the Federal Reserve
must consider whether the performance of such an activity can reasonably be
expected to produce benefits to the public, such as greater convenience,
increased competition, or gains in efficiency that outweigh possible adverse
effects, such as undue
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<PAGE> 39
concentration of resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices. For example, factoring accounts
receivable, acquiring or servicing loans, leasing personal property, conducting
securities brokerage activities, performing data processing services, acting as
agent or broker in selling credit life insurance and other types of insurance in
connection with credit transactions, and certain insurance underwriting
activities have all been determined by regulations of the Federal Reserve to be
permissible activities of bank holding companies. Despite prior approval, the
Federal Reserve has the power to order a holding company or its subsidiaries to
terminate any activity or terminate its ownership or control of any subsidiary,
when it has reasonable cause to believe that continuation of such activity or
such ownership or control constitutes a serious risk to the financial safety,
soundness, or stability of any bank subsidiary of that bank holding company.
Banks are subject to the provisions of the CRA. Under the terms of the
CRA, the appropriate federal bank regulatory agency is required, in connection
with its examination of a bank, to assess such bank's record in meeting the
credit needs of the community served by that bank, including low- and
moderate-income neighborhoods. The CRA does not establish specific lending
requirements or programs for financial institutions, nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with the CRA.
The regulatory agency's assessment of the bank's record is made available to the
public. Further, such assessment is required of any bank which has applied to:
- charter a national bank,
- obtain deposit insurance coverage for a newly chartered
institution,
- establish a new branch office that will accept deposits,
- relocate an office, or
- merge or consolidate with, or acquire the assets or assume the
liabilities of, a federally regulated financial institution.
In the case of a bank holding company applying for approval to acquire
a bank or other bank holding company, the Federal Reserve will assess the record
of each subsidiary bank of the applicant bank holding company, and such records
may be the basis for denying the application.
Bank Regulation. Suncoast National Bank will be chartered by the
Comptroller of the Currency under the National Banking Act. Suncoast National
Bank's deposits will be insured by the FDIC to the extent provided by law.
Suncoast National Bank will be subject to comprehensive regulation, examination
and supervision by the Comptroller of the Currency. Suncoast National Bank also
will be subject to other laws and regulations applicable to banks. Such
regulations include limitations on loans to a single borrower and to its
directors, officers and employees; restrictions on the opening and closing of
branch offices; the maintenance of required capital and liquidity ratios; the
granting of credit under equal and fair conditions; and the disclosure of the
costs and terms of such credit. Suncoast National Bank will be examined
periodically by the Comptroller of the Currency, to whom Suncoast National Bank
will submit periodic reports regarding its financial condition and other
matters. The Comptroller of the Currency has a broad range of powers to enforce
regulations and to take discretionary actions determined to be for the
protection and safety and soundness of banks, including the institution of cease
and desist orders and the
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<PAGE> 40
removal of directors and officers. The Comptroller of the Currency also has the
authority to approve or disapprove mergers, consolidations, and similar
corporate actions.
Under federal law, federally insured banks are subject to restrictions
on any extension of credit to their parent holding companies or other
affiliates, on investment in the stock or other securities of affiliates, and on
the taking of such stock or securities as collateral from any borrower. In
addition, banks are prohibited from engaging in tie-in arrangements in
connection with any extension of credit or the providing of any property or
service.
Federal law also contains capital standards and civil and criminal
enforcement provisions. Annual full-scope, on-site examinations are required of
all insured depository institutions. The cost for conducting an examination of
an institution may be assessed to that institution, with special consideration
given to affiliates and any penalties imposed for failure to provide information
requested.
Transactions with Affiliates. There are various legal restrictions on
the extent to which Suncoast Bancorp and any future nonbank subsidiaries can
borrow or otherwise obtain credit from Suncoast National Bank. There also are
legal restrictions on Suncoast National Bank's purchase of or investments in the
securities of and purchases of assets from Suncoast Bancorp. Suncoast National
Bank also is restricted in loaning to third parties collateralized by the
securities or obligations of Suncoast Bancorp, issuing guarantees, acceptances,
and letters of credit on behalf of Suncoast Bancorp and certain bank
transactions with Suncoast Bancorp. Subject to certain limited exceptions,
Suncoast National Bank may not extend credit to Suncoast Bancorp or to any other
affiliate in an amount which exceeds 10% of Suncoast National Bank's capital
stock and surplus and may not extend credit in the aggregate to such affiliates
in an amount which exceeds 20% of its capital stock and surplus. Further, there
are legal requirements as to the type, amount and quality of collateral which
must secure such extensions of credit transactions between Suncoast National
Bank and Suncoast Bancorp or such other affiliates. Such transactions also must
be on terms and under circumstances, including credit standards, that are
substantially the same or at least as favorable to Suncoast National Bank as
those prevailing at the time for comparable transactions with non-affiliated
companies. Also, Suncoast Bancorp and its subsidiaries are prohibited from
engaging in tie-in arrangements in connection with any extension of credit,
lease or sale of property or furnishing of services.
Dividends. Dividends from Suncoast National Bank constitute the primary
source of funds for dividends to be paid by Suncoast Bancorp. For additional
information, see "Risk Factors - We do not plan to pay cash dividends" and
"Dividend Policy." There also are various statutory and contractual limitations
on the ability of Suncoast National Bank to pay dividends, extend credit, or
otherwise supply funds to Suncoast Bancorp. As a national bank, Suncoast
National Bank may not pay dividends from its paid-in surplus. All dividends must
be paid out of undivided profits then on hand, after deducting expenses,
including reserves for losses and bad debts. In addition, a national bank is
prohibited from declaring a dividend on its shares of common stock until its
surplus equals its stated capital, unless there has been transferred to surplus
no less than one-tenth of the bank's net profits of the preceding two
consecutive half-year periods in the case of an annual dividend. The approval of
the Comptroller of the Currency is required if the total of all dividends
declared by a national bank in any calendar year exceeds the total of its net
profits for that year combined with its retained net profits for the preceding
two years, less any required transfers to surplus. Florida law applicable to
companies including Suncoast Bancorp provides that dividends may be declared and
paid only if, after giving it effect, (1) the company is able to pay its debts
as they become due in the usual course of business, and (2) the company's total
assets would be greater than the sum of its total liabilities plus the amount
that would be needed if the company were to
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<PAGE> 41
be dissolved at the time of the dividend to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are superior to those
receiving the dividend.
Capital Requirements. The federal bank regulatory authorities have
adopted risk-based capital guidelines for banks and bank holding companies that
are designed to make regulatory capital requirements more sensitive to
differences in risk profile among banks and bank holding companies. The
resulting capital ratios represent qualifying capital as a percentage of total
risk-weighted assets and off-balance sheet items. The guidelines are minimums,
and the federal regulators have noted that banks and bank holding companies
contemplating significant expansion programs should not allow expansion to
diminish their capital ratios and should maintain all ratios well in excess of
the minimums. The current guidelines require all bank holding companies and
federally-regulated banks to maintain a minimum risk-based total capital ratio
equal to 8%, of which at least 4% must be Tier 1 capital. Tier 1 capital
includes common shareholders' equity, qualifying perpetual preferred shares, and
minority interests in equity accounts of consolidated subsidiaries, but excludes
goodwill and most other intangibles and excludes the allowance for loan and
lease losses. Tier 2 capital includes the excess of any preferred shares not
included in Tier 1 capital, mandatory convertible securities, hybrid capital
instruments, subordinated debt and intermediate term-preferred shares, and
general reserves for loan and lease losses up to 1.25% of risk-weighted assets.
Federal law contains "prompt corrective action" provisions pursuant to
which banks are to be classified into one of five categories based upon capital
adequacy, ranging from "well capitalized" to "critically undercapitalized" and
which require the appropriate federal banking agency to take prompt corrective
action with respect to an institution which becomes "significantly
undercapitalized" or "critically undercapitalized".
The Comptroller of the Currency has issued final regulations to
implement the "prompt corrective action" provisions. In general, the regulations
define the five capital categories as follows:
- an institution is "well capitalized" if it has a total
risk-based capital ratio of 10% or greater, has a Tier 1
risk-based capital ratio of 6% or greater, has a leverage
ratio of 5% or greater and is not subject to any written
capital order or directive to meet and maintain a specific
capital level for any capital measures;
- an institution is "adequately capitalized" if it has a total
risk-based capital ratio of 8% or greater, has a Tier 1
risk-based capital ratio of 4% or greater, and has a leverage
ratio of 4% or greater;
- an institution is "undercapitalized" if it has a total
risk-based capital ratio of less than 8%, has a Tier 1
risk-based capital ratio that is less than 4% or has a
leverage ratio that is less than 4%;
- an institution is "significantly undercapitalized" if it has a
total risk-based capital ratio that is less than 6%, a Tier 1
risk-based capital ratio that is less than 3% or a leverage
ratio that is less than 3%; and
- an institution is "critically undercapitalized" if its
"tangible equity" is equal to or less than 2% of its total
assets.
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The capital levels of Suncoast Bancorp and Suncoast National Bank will
be in excess of those required to be maintained by a "well capitalized"
financial institution when Suncoast National Bank commences operations.
The Comptroller of the Currency also, after an opportunity for a
hearing, has authority to downgrade an institution from "well capitalized" to
"adequately capitalized" or to subject an "adequately capitalized" or
"undercapitalized" institution to the supervisory actions applicable to the next
lower category, for supervisory concerns. The degree of regulatory scrutiny of a
financial institution will increase, and the permissible activities of the
institution will decrease, as it moves downward through the capital categories.
Institutions that fall into one of the three undercapitalized categories may be
required to
- submit a capital restoration plan;
- raise additional capital;
- restrict their growth, deposit interest rates, and other
activities;
- improve their management;
- eliminate management fees; or
- divest themselves of all or part of their operations.
Bank holding companies controlling financial institutions can be called upon to
boost the institutions' capital and to partially guarantee the institutions'
performance under their capital restoration plans. These capital guidelines can
affect Suncoast Bancorp in several ways.
However, rapid growth, poor loan portfolio performance, or poor
earnings performance, or a combination of these factors, could change Suncoast
National Bank's capital position in a relatively short period of time, making an
additional capital infusion necessary. Such events also could have similar
effects on Suncoast Bancorp's capital position.
Federal law also requires that (1) only a "well capitalized" depository
institution may accept brokered deposits without prior regulatory approval and
(2) the appropriate federal banking agency annually examine all insured
depository institutions, with some exceptions for small, "well capitalized"
institutions and state-chartered institutions examined by state regulators.
Federal law also contains a number of consumer banking provisions, including
disclosure requirements and substantiative contractual limitations with respect
to deposit accounts.
Enforcement Powers. Congress has provided the federal bank regulatory
agencies with an array of powers to enforce laws, rules, regulations and orders.
Among other things, the agencies may require that institutions cease and desist
from several activities, may preclude persons from participating in the affairs
of insured depository institutions, may suspend or remove deposit insurance, and
may impose civil money penalties against institution-affiliated parties for
certain violations.
Maximum Legal Interest Rates. Like the laws of many states, Florida law
contains provisions on interest rates that may be charged by banks and other
lenders on various types of loans. Numerous exceptions exist to the general
interest limitations imposed by Florida law. The relative importance of
38
<PAGE> 43
these interest limitation laws to the financial operations of Suncoast National
Bank will vary from time to time, depending on a number of factors, including
conditions in the money markets, the costs and availability of funds, and
prevailing interest rates.
Bank Branching. Banks in Florida are permitted to branch state wide.
Such branch banking by national banks, however, is subject to prior approval by
the Comptroller of the Currency. Any such approval would take into consideration
several factors, including the bank's level of capital, the prospects and
economics of the proposed branch office, and other conditions deemed relevant by
the Comptroller of the Currency for purposes of determining whether approval
should be granted to open a branch office. For information regarding legislation
on interstate branching in Florida, see "-- Interstate Banking" below.
Change of Control. Federal law restricts the amount of voting stock of
a bank holding company and a bank that a person may acquire without the prior
approval of banking regulators. The overall effect of such laws is to make it
more difficult to acquire a bank holding company and a bank by tender offer or
similar means than it might be to acquire control of another type of
corporation. Consequently, shareholders of Suncoast Bancorp may be less likely
to benefit from the rapid increases in stock prices that may result from tender
offers or similar efforts to acquire control of other companies. Under the
federal Change in Bank Control Act and the regulations thereunder, a person or
group must give advance notice to the Federal Reserve before acquiring control
of any bank holding company and the Comptroller of the Currency before acquiring
control of any national banks such as Suncoast National Bank. Upon receipt of
such notice, the Federal Reserve or the Comptroller of the Currency, as the case
may be, may approve or disapprove the acquisition. The Change in Bank Control
Act creates a rebuttable presumption of control if a person or group acquires a
certain percentage or more of a bank holding company's or bank's voting stock,
or if one or more other control factors set forth in the Change in Bank Control
Act are present.
Interstate Banking. Federal law provides for nationwide interstate
banking and branching. Under the law, interstate acquisitions of banks or bank
holding companies in any state by bank holding companies in any other state are
permissible subject to limitations. Florida also has a law that allows
out-of-state bank holding companies located in states that allow Florida bank
holding companies to acquire banks and bank holding companies in that state, to
acquire Florida banks and Florida bank holding companies. The law essentially
provides for out-of-state entry by acquisition only and not by interstate
branching, and requires the acquired Florida bank to have been in existence for
at least three years. Interstate branching and consolidation of existing bank
subsidiaries in different states is permissible. A Florida bank also may
establish, maintain, and operate one or more branches in a state other than
Florida pursuant to an interstate merger transaction in which the Florida bank
is the resulting bank. An interstate merger transaction resulting in the
acquisition by an out-of-state bank of a Florida bank is not permitted unless
the Florida bank has been in existence and continuously operating, on the date
of the acquisition, for more than three years.
Effect of Governmental Policies. The earnings and businesses of
Suncoast Bancorp and Suncoast National Bank are affected by the policies of
various regulatory authorities of the United States, especially the Federal
Reserve. The Federal Reserve, among other things, regulates the supply of credit
and deals with general economic conditions within the United States. The
instruments of monetary policy employed by the Federal Reserve for those
purposes influence in various ways the overall level of investments, loans,
other extensions of credit, and deposits, and the interest rates paid on
liabilities and received on assets.
39
<PAGE> 44
INDUSTRY RESTRUCTURING
For well over a decade, the banking industry has been undergoing a
restructuring process which is anticipated to continue. The restructuring has
been caused by product and technological innovations in the financial services
industry, deregulation of interest rates, and increased competition from foreign
and nontraditional banking competitors, and has been characterized principally
by the gradual erosion of geographic barriers to intrastate and interstate
banking and the gradual expansion of investment and lending authorities for bank
institutions.
Members of Congress and the administration have indicated their
intention to consider additional legislation designed to institute reforms to
promote the viability of the industry. Certain of the proposals would revise the
federal regulatory structure for insured depository institutions; others would
affect the nature of products, services, and activities that bank holding
companies and their subsidiaries may offer or engage in, and the types of
entities that may control depository institutions. There can be no assurance as
to whether or in what form any such proposed legislation might be enacted, or
what impact such legislation might have upon Suncoast Bancorp.
DESCRIPTION OF CAPITAL STOCK
GENERAL
Suncoast Bancorp's Articles of Incorporation authorize it to issue: (1)
up to 10,000,000 common shares, par value $0.01 per share, of which 700,000
shares will be issued pursuant to this offering and 805,000 shares if the
over-allotment option granted to the underwriter is exercised in full, and (2)
up to 3,000,000 preferred shares, stated par value of $0.01 per share, the
rights and preferences of which shall be determined by the board of directors at
the time it authorizes the issuance thereof. No other classes of capital stock
are authorized.
As of the date of this prospectus, other than one common share issued
to H. R. Foxworthy for the sole purpose of organizing Suncoast Bancorp, no
shares of capital stock are issued and outstanding. This share was issued at
$1.00 and will be repurchased at cost and cancelled concurrently with the
closing of the offering. Other than options to purchase 56,000 common shares to
be granted under the Director Stock Option Plan and the Employee Stock Option
Plan described elsewhere herein, there are no outstanding options to purchase,
warrants for, or securities convertible into, common shares. See "Management -
Stock Option Plans."
COMMON SHARES
All outstanding common shares offered hereby will be validly issued,
fully paid and nonassessable. The holders of common shares are entitled to one
vote for each share held of record on all matters voted upon by shareholders.
Subject to preferences that may be applicable to any outstanding preferred
shares, each outstanding common share is entitled to participate equally in any
distribution of net assets made to the stockholders in liquidation, dissolution,
or winding up Suncoast Bancorp and is entitled to participate equally in
dividends as and when declared by Suncoast Bancorp's board of directors. There
are no redemption, sinking fund, conversion, or preemptive rights with respect
to the shares of common shares. All common shares have equal rights and
preferences.
40
<PAGE> 45
PREFERRED SHARES
As of the date of this prospectus, no preferred shares were issued or
outstanding. The board of directors is authorized to fix or alter the rights,
preferences, privileges and restrictions of any wholly unissued series of
preferred shares, including the dividend rights, original issue price,
conversion rights, voting rights, terms of redemption, liquidation preferences
and sinking fund terms thereof, and the number of shares constituting any such
series and the designation thereof and to increase or decrease the number of
shares of such series subsequent to the issuance of shares of such series but
not below the number of shares then outstanding. The board of directors, without
shareholder approval, can issue preferred shares with the voting and conversion
rights described above, which could adversely affect the voting power of the
shareholders of common shares. Suncoast Bancorp has no plans at this time to
issue any preferred shares. Any such issuance of preferred shares could have the
effect of delaying or preventing a change of control.
ANTI-TAKEOVER AND INDEMNIFICATION PROVISIONS
Suncoast Bancorp's board of directors may authorize the issuance of
additional common shares or preferred shares without further action by Suncoast
Bancorp's shareholders, unless such action is required in a particular case by
applicable laws or regulation. The authority to issue additional common shares
or preferred shares provides Suncoast Bancorp with the flexibility necessary to
meet its future needs without the delay resulting from seeking shareholder
approval. The unissued common shares or preferred shares may be issued from time
to time for any corporate purposes, including share splits, share dividends,
employee benefit and compensation plans, acquisitions and public and private
sales for cash as a means of raising capital. Such shares could be used to
dilute the share ownership of persons seeking to obtain control of Suncoast
Bancorp. In addition, the sale of a substantial number of shares of common
shares or preferred shares to persons who have an understanding with Suncoast
Bancorp concerning the voting of such shares, or the distribution or dividend of
common shares or preferred shares to Suncoast Bancorp's shareholders, may have
the effect of discouraging or otherwise increasing the cost of unsolicited
attempts to acquire control of Suncoast Bancorp. Further, because Suncoast
Bancorp's board of directors has the power to determine the voting, conversion
or other rights of the preferred shares, the issuance of a series of preferred
shares to persons friendly to management could effectively discourage or
preclude consummation of a change in control transaction or have the effect of
maintaining the position of Suncoast Bancorp's incumbent management. Suncoast
Bancorp does not currently have any plans or commitments to use its authority to
effect any such issuance, but reserves the right to take any action that the
board of directors deems to be in the best interests of Suncoast Bancorp and its
shareholders.
Suncoast Bancorp is subject to several provisions under Florida law
which may deter or frustrate unsolicited attempts to acquire certain Florida
corporations. These statutes, commonly referred to as the "Control Share Act"
and the "Fair Price Act," apply to most public corporations organized in Florida
unless the corporation has specifically elected to opt out of such provisions.
Suncoast Bancorp has not elected to opt out of these provisions. The Fair Price
Act generally requires that certain transactions between a public corporation
and an affiliate must be approved by two-thirds of the disinterested directors
or shareholders, not including those shares beneficially owned by an "interested
shareholder". The Control Share Act generally provides that shares of a public
corporation acquired in excess of certain specified thresholds will not posses
any voting rights unless such voting rights are approved by a majority vote of
the corporation's disinterested shareholders. These anti-takeover provisions of
Florida law could result in Suncoast Bancorp being less attractive to a
potential acquiror and/or result in shareholders receiving less for their shares
than otherwise might be available in the event of an unsolicited takeover
attempt.
41
<PAGE> 46
The Florida Business Corporation Act authorizes a company to indemnify
its directors and officers in certain instances against certain liabilities
which they may incur by virtue of their relationship with the company. Further,
a Florida company is authorized to provide further indemnification or
advancement of expenses to any of its directors, officers, employees, or agents,
except for acts or omissions which constitute:
- a violation of the criminal law unless the individual had
reasonable cause to believe it was lawful,
- a transaction in which the individual derived an improper
personal benefit,
- in the case of a director, a circumstance under which certain
liability provisions of the Florida Business Corporation Act
are applicable related to payment of dividends or other
distributions or repurchases of shares in violation of such
Act, or
- willful misconduct or a conscious disregard for the best
interest of the company in a proceeding by the company, or a
company shareholder.
A Florida company also is authorized to purchase and maintain liability
insurance for its directors, officers, employees and agents.
Suncoast Bancorp's Bylaws provide that Suncoast Bancorp shall indemnify
each of its directors and officers to the fullest extent permitted by law, and
that the indemnity will include advances for expenses and costs incurred by such
director or officer related to any action in regard to which indemnity is
permitted. Suncoast Bancorp maintains directors' and officers' liability
insurance covering its directors and officers against expenses and liabilities
arising from certain actions to which they may become subject by reason of
having served in such role. Such insurance is subject to the coverage amounts,
exceptions, deductibles and other conditions set forth in the policy. There is
no assurance that Suncoast Bancorp will maintain liability insurance for its
directors and officers.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 ("Securities Act") may be permitted to directors, officers, or
persons controlling Suncoast Bancorp pursuant to the foregoing provisions,
Suncoast Bancorp has been informed that in the opinion of the Securities and
Exchange Commission (the "Commission") such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common shares will be
Continental Stock Transfer & Trust Co., New York, New York.
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, Suncoast Bancorp expects to have
700,000 common shares outstanding and 805,000 if the over-allotment option
granted to the underwriter is exercised in full. The 700,000 shares of Suncoast
Bancorp's common shares purchased in this offering plus any additional shares
sold upon the underwriter's exercise of its over-allotment option have been
registered with the
42
<PAGE> 47
Commission under the Securities Act, and may generally be resold without
registration under the Securities Act unless they were acquired by directors or
executive officers of Suncoast Bancorp or Suncoast National Bank, or holders of
large amounts of outstanding common shares (collectively, "affiliates").
Affiliates of Suncoast Bancorp may generally only sell common shares pursuant to
the Commission's Rule 144 or another exemption under the Securities Act.
In general, under Rule 144 as currently in effect, an affiliate of
Suncoast Bancorp may sell common shares within any three-month period in an
amount limited to the greater of 1% of the outstanding Company's common shares
or the average weekly trading volume in Suncoast Bancorp's common shares during
the four calendar weeks preceding such sale. Sales under Rule 144 are also
subject to certain manner-of-sale provisions, notice requirements and the
availability of current public information about Suncoast Bancorp.
Suncoast Bancorp and the directors and officers of Suncoast Bancorp and
Suncoast National Bank, who are expected to hold an aggregate of approximately
140,000 shares after this offering, have agreed, or will agree, that they will
not issue, offer for sale, sell, grant any options for the sale of or otherwise
dispose of any shares of common shares held by them or any rights to purchase
common shares, without the prior written consent of the underwriter for a period
of 180 days from the date of this prospectus. Prior to this offering, there has
been no public trading market for the common shares, and no predictions can be
made as to the effect, if any, that sales of shares or the availability of
shares for sale will have on the prevailing market price of the common shares
after completion of this offering. Nevertheless, sales of substantial amounts of
common shares in the public market could have an adverse effect on prevailing
market prices.
UNDERWRITING
Under the terms and subject to the conditions set forth in the
underwriting agreement by and between the underwriter and Suncoast Bancorp (the
"Underwriting Agreement"), the underwriter has agreed to purchase from Suncoast
Bancorp, and Suncoast Bancorp has agreed to sell to the underwriter 700,000
common shares to be sold in the offering.
The Underwriting Agreement provides that the obligation of the
underwriter to pay for and accept delivery of the common shares is subject to
approval of certain matters by its counsel and to various other conditions
precedent. The underwriter is obligated to purchase and pay for all common
shares offered hereby other than those covered by the over-allotment option
described below, if any common shares are purchased.
The underwriter has advised Suncoast Bancorp that the underwriter
proposes to offer the common shares directly to the public initially at the
public offering price set forth on the cover page of this prospectus and to
certain selected dealers at such price, less a concession not to exceed $0.70
per share. This amount will be reduced to $0.30 per share with respect to sales
of up to 150,000 common shares to certain investors identified by Suncoast
Bancorp to the underwriter, in writing, prior to effectiveness of the
Registration Statement for the offering. The underwriter may allow, and such
selected dealers may reallow, a concession not in excess of $0.38 per share to
certain other dealers. After the initial public offering of the common shares,
the public offering price, concession, and reallowance to dealers may be changed
by the underwriter. The common shares are offered subject to receipt and
acceptance by the underwriter and to certain other conditions, including the
right of the underwriter to reject orders in whole
43
<PAGE> 48
or in part, and withdraw, cancel, or modify the offer without notice. Suncoast
Bancorp expects that the common shares will be ready for delivery on or about
June ___, 1999.
The underwriter has advised Suncoast Bancorp that it does not intend to
confirm sales of the common shares offered hereby to any account over which it
may exercise discretionary authority.
Suncoast Bancorp has granted to the underwriter an option, exercisable
during the 30-day period beginning on the date of this prospectus, to purchase
up to 105,000 additional common shares solely to cover over-allotments, if any,
at the public offering price less the underwriting discounts and commissions set
forth on the cover page of this prospectus.
Subject to limitations, Suncoast Bancorp and the underwriter have
agreed to indemnify each other against certain civil liabilities, including
civil liabilities under the Securities Act, or to contribute to payments that
Suncoast Bancorp or the underwriter may be required to make in respect thereof.
At Suncoast Bancorp's request, the underwriter has agreed to reserve up
to 150,000 common shares for sale at the public offering price to directors,
employees, and other persons having certain business relationships with Suncoast
Bancorp or Suncoast National Bank. The number of shares available for sale to
the general public will be reduced to the extent that these persons purchase
such reserved shares. Any reserved shares not purchased will be offered by the
underwriter to the general public on the same basis as the other shares offered
hereby.
The foregoing is a summary of the principal terms of the Underwriting
Agreement and does not purport to be complete. Reference is made to a copy of
the Underwriting Agreement which is on file as an exhibit to the Registration
Statement.
In connection with the offering of the common shares, the underwriter
and selling group members and their respective affiliates may engage in
over-allotment transactions, stabilizing transactions, syndicate covering
transactions, and penalty bids effected in accordance with Rule 104 of the
Commission's Regulation M. Over-allotment transactions are those transactions in
which the underwriter creates a short position for its own account by selling
more common shares than it is committed to purchase from Suncoast Bancorp. In
such case, to cover all or part of a short position, the underwriter may
exercise the over-allotment option described above or may purchase common shares
in the open market following completion of the offering. In stabilizing
transactions, the underwriter may bid for, and purchase, common shares at a
level above that which might otherwise prevail on the open market for the
purpose of preventing or retarding a decline in the market price of the common
shares. Syndicate covering transactions involve purchases of common shares in
the open market after a distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the underwriter to reclaim
selling concessions from a syndicate member when the common shares originally
sold by such syndicate member is purchased in a syndicate covering transaction
to cover syndicate short positions Any of the foregoing transactions may cause
the price of the common shares to be higher than it would otherwise be in the
absence of such transactions. The underwriter is not required to engage in any
of the foregoing transactions, and if commenced, such transactions may be
discontinued at any time.
Each of Suncoast Bancorp, and the directors, executive officers, and
existing shareholders of Suncoast Bancorp and Suncoast National Bank has agreed
that, without the prior written consent of the underwriter, they will not, for a
period of 180 days from the date of this prospectus, subject to limited
exceptions, directly or indirectly offer, sell, announce an intention to sell,
contract to sell, or otherwise
44
<PAGE> 49
dispose of, any common shares held by them or any securities convertible into or
exercisable or exchangeable for the common shares.
There has been no public trading market for the common shares prior to
this offering. Consequently, the initial public offering price for the common
shares was determined by negotiations between Suncoast Bancorp and the
underwriter. This price is not based upon earnings or any history of operations
and should not be construed as indicative of the present or anticipated future
value of the common shares. In determining such price, consideration was given
to several factors, including among them the size of the offering, the market
conditions for initial public offerings, the desire that the security being
offered be attractive to individuals, the underwriter's experience in dealing
with initial public offerings for financial institutions, and other relevant
factors. No assurances can be made as to the liquidity of the common shares or
that an active and liquid trading market will develop or, if developed, that it
will be sustained.
LEGAL OPINIONS
The legality of the common shares being offered hereby will be passed
upon for Suncoast Bancorp by Smith, Mackinnon, Greeley, Bowdoin & Edwards, P.A.,
Orlando, Florida. Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa,
Florida is acting as counsel for the underwriter in connection with certain
legal matters relating to the offering of the common shares.
EXPERTS
The financial statements of Suncoast Bancorp included in this
prospectus have been audited by Hill, Barth & King, Inc., independent public
accountants, as indicated in their report with respect thereto. Such financial
statements have been included herein and in the Registration Statement in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
ADDITIONAL INFORMATION
Suncoast Bancorp has filed with the Commission a Registration Statement
under the Securities Act, with respect to the common shares offered by the
Registration Statement. This prospectus does not contain all of the information
set forth in the Registration Statement and in the exhibits attached. Certain
items were omitted in accordance with the rules and regulations of the
Commission. For further information with respect to Suncoast Bancorp and the
common shares, reference is made to the Registration Statement and the exhibits
filed with it. Anyone can inspect the Registration Statement without charge at
the Public Reference Section of the Commission Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following Commission's regional
offices: Northeast Regional Office, 7 World Trade Center, Suite 1300, New York,
New York, 10048; and Midwest Regional Office, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies may be obtained upon payment of the
required fees. Information contained in this prospectus which refer to a
document filed as an exhibit to the Registration Statement are qualified in
their entirety by reference to a copy of that document. In addition, Suncoast
Bancorp is required to file electronic versions of these documents with the
Commission through the Commission's EDGAR system. The Commission maintains a
World Wide Web site at
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<PAGE> 50
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
Suncoast Bancorp intends to furnish its shareholders with annual
reports containing financial statements audited by independent public
accountants and with quarterly reports containing unaudited financial
information for each of the first three quarters of each fiscal year. In
additions, as a result of this offering Suncoast Bancorp will be subject to the
informational and periodic reporting requirements of the Securities Exchange Act
of 1934, and will file annual and quarterly reports with the Commission. Copies
of such reports will be made available to Suncoast Bancorp's shareholders.
46
<PAGE> 51
FINANCIAL STATEMENTS
SUNCOAST BANCORP, INC.
(A Development Stage Company)
December 31, 1998
CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report............................................................................F-2
Balance Sheet ..........................................................................................F-3
Statement of Operations ................................................................................F-4
Statement of Shareholders' Deficit .....................................................................F-5
Statement of Cash Flows ................................................................................F-6
Notes to Financial Statements ..........................................................................F-7
</TABLE>
F-1
<PAGE> 52
Board of Directors
Suncoast Bancorp, Inc.
Sarasota, Florida
Independent Auditors' Report
We have audited the accompanying balance sheet of Suncoast Bancorp,
Inc., formerly known as Community Holdings Corporation (the Company) as of
December 31, 1998 and the related statements of operations, shareholders'
deficit and cash flows for the period from April 1, 1998 (date of inception) to
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Suncoast Bancorp,
Inc. as of December 31, 1998 and the results of its operations and its cash
flows for the period from April 1, 1998 (date of inception) to December 31, 1998
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
company will continue as a going concern. As discussed in Note H to the
financial statements, the company's ability to continue as a going concern is
dependent on approval from the Office of the Comptroller of the Currency for a
National Banking Charter and a successful public offering of the Company's
common stock. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ Hill, Barth & King, Inc.
------------------------------------
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
March 22, 1999
F-2
<PAGE> 53
SUNCOAST BANCORP, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1998
<TABLE>
<CAPTION>
March 31,
December 31, 1999
1998 (unaudited)
------------ -----------
<S> <C> <C>
ASSETS
Cash $ 4,774 $ 23,325
Prepaid expenses 6,955 6,722
Deferred offering costs 48,059 81,403
Equipment - NOTE B 1,410 60,112
Loan closing costs - NOTE C 396 99
Architect's fees 3,126 11,131
Deposits 6,000 6,000
--------- ---------
$ 70,720 $ 188,792
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Liabilities:
Accounts payable $ 53,911 $ 63,773
Loans payable - NOTE D 101,188 251,188
Accrued interest payable 1,441 2,163
--------- ---------
TOTAL LIABILITIES 156,540 317,124
--------- ---------
Shareholders' Deficit:
Preferred stock, par value $.01 per share,
3,000,000 shares authorized; 0 shares
issued and outstanding 0 0
Common stock, par value $.01 per share,
10,000,000 shares authorized;
1 share issued and outstanding 0 0
Additional paid-in capital 1 1
Deficit accumulated during the
development stage (85,821) (128,333)
--------- ---------
TOTAL SHAREHOLDERS' DEFICIT (85,820) (128,332)
--------- ---------
$ 70,720 $ 188,792
========= =========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 54
SUNCOAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Period from April 1, 1998 (date of inception) to December 31, 1998
<TABLE>
<CAPTION>
Period ended
Period ended March 31,
December 31, 1999
1998 (unaudited)
------------- ------------
<S> <C> <C>
INCOME $ 0 $ 0
EXPENSES
Automobile expense 12,265 17,479
Consulting fees 42,600 62,549
Interest expense and loan fees 3,367 6,369
License and permits 17,566 18,618
Other expenses 10,023 23,318
-------- ---------
TOTAL EXPENSES 85,821 128,333
-------- ---------
NET LOSS $(85,821) $(128,333)
======== =========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 55
SUNCOAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' DEFICIT
Period from April 1, 1998 (date of inception) to December 31, 1998
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Additional During the Total March 31,
Common Paid-in Development December 31, 1999
Stock Capital Stage 1998 (unaudited)
--------- ---------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance
April 1, 1998 $ 0 $ 0 $ 0 $ 0 $ 0
Proceeds from
issuance of
common stock 0 1 0 1 1
Net loss 0 0 (85,821) (85,821) (128,333)
--------- ---------- ----------- ----------- -----------
Balance (deficit)
December 31, 1998 $ 0 $ 1 $ (85,821) $ (85,820) $ (128,332)
========= ========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 56
SUNCOAST BANCORP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Period from April 1, 1998 (date of inception) to December 31, 1998
<TABLE>
<CAPTION>
Period ended
Period ended March 31,
December 31, 1999
1998 (unaudited)
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (85,821) $(128,333)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 866 1,388
Increase in prepaid expenses (6,955) (6,722)
Increase in other assets (57,185) (98,534)
Increase in intangible assets (1,187) (1,187)
Increase in accounts payable 53,911 63,773
Increase in accrued interest
payable 1,441 2,163
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (94,930) (167,452)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (1,484) (60,411)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (1,484) (60,411)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on short-term notes 101,188 251,188
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 101,188 251,188
--------- ---------
NET INCREASE IN CASH 4,774 23,325
CASH
Beginning of period 0 0
--------- ---------
End of period $ 4,774 $ 23,325
========= =========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE> 57
SUNCOAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization:
Suncoast Bancorp, Inc. formerly known as Community Holdings Corporation
(the Company) was incorporated under the laws of the State of Florida on
April 1, 1998. The Company's activities to date have been limited to the
organization of Suncoast National Bank (the Bank), as well as preparation for a
$7,000,000 common stock offering (the Offering). A substantial portion of the
proceeds of the Offering will be used by the Company to provide the initial
capitalization of the Bank. The company received preliminary approval from the
Office of the Comptroller of Currency on January 21, 1999.
Nature of Business:
The Bank intends to offer a full range of commercial and consumer
banking services primarily within the Sarasota, Florida area.
Use of Estimates:
The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Deferred Offering Costs:
Deferred offering costs consist primarily of legal and accounting fees
related to the initial public stock offering and will be offset against the
offering proceeds when received.
NOTE B - EQUIPMENT
Equipment at December 31, 1998 consists of the following:
<TABLE>
<S> <C>
Computer Equipment $ 1,485
Less accumulated depreciation 74
-------
TOTAL $ 1,410
=======
</TABLE>
Depreciation is computed on the straight-line method over the estimated
useful lives of the depreciable assets. Depreciation expense was $74 for the
period ended December 31, 1998.
F-7
<PAGE> 58
SUNCOAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
NOTE C - LOAN CLOSING COSTS
Loan closing costs as of December 31, 1998 consisted of the following:
<TABLE>
<S> <C>
Loan closing costs $1,187
Less accumulated amortization 791
------
TOTAL $ 396
======
</TABLE>
Amortization is computed on the straight-line method over the life of
the loan. Amortization expense for the period ended December 31, 1998 was $791.
NOTE D - LOANS PAYABLE
The Company has obtained a $325,000 line of credit payable to a bank,
guaranteed by the organizers of the Company to pay organizational and
pre-opening expenses of the Bank and the Company. As of December 31, 1998, the
Company had borrowed $101,187 under this agreement. The line of credit bears
interest at the prime rate plus 1% (9% as of 12/31/98) and varies as prime
varies and matures on May 1, 1999. The foregoing line of credit and any unpaid
accrued interest will be repaid from the offering proceeds.
NOTE E - INCOME TAXES
Deferred taxes are recognized for temporary differences between the
basis of assets and liabilities for financial statement and income tax purposes.
The tax effect of the differences that gave rise to a deferred tax asset of
$30,037 and corresponding valuation allowance of ($30,037) at December 31, 1998
relate primarily to the capitalization of preoperating start-up costs which are
amortized over a five year term from the date operations commence for tax
purposes.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Company has committed to lease 4,000 square feet for its main
office location. The lease has a term of 5 years with the option for two 5-year
renewals; to begin on the earlier of the date of the certificate of occupancy
for the building or the date the bank opens for business. The base annual lease
payment is $78,246 plus applicable sales tax; increased annually by 4% on the
anniversary date of the lease during the initial term or any option period
agreed to under the lease. The Company has also entered into a 36-month closed
end lease for an automobile. Lease payments under this lease arrangement are
$463 per month.
F-8
<PAGE> 59
SUNCOAST BANCORP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
NOTE G - STOCK OPTIONS
The Board of Directors of the Company has adopted the Suncoast Bancorp,
Inc. Director Stock Option Plan and the Suncoast Bancorp, Inc. Employee Stock
Option Plan and has reserved 42,000 and 28,000 shares, respectively, of its
common stock for issuance under these plans. Under both plans the option price
will be no less than the fair market value of the stock on the date of grant.
The options may be exercised in whole or in part, with respect to whole shares
only, not to exceed 10 years from the date of grant.
NOTE H - GOING CONCERN
As shown in the accompanying financial statements, the Company incurred
a net loss of $85,821 during the development stage, April 1, 1998 (date of
inception) to December 31, 1998, and as of that date, the Company's liabilities
exceeded its assets by $85,820. The ability of the Company to continue as a
going concern is dependent on approval from the Office of the Comptroller of the
Currency for a National Banking Charter and a successful public offering of the
Company's common stock. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
F-9
<PAGE> 60
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
INFORMATION OR MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER MADE IN THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY SUNCOAST BANCORP, SUNCOAST NATIONAL BANK OR THE UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITY OTHER THAN THE COMMON SHARES OFFERED BY THIS PROSPECTUS, NOR DOES IT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE COMMON
SHARES BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS
PROSPECTUS.
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary..................... 1
Risk Factors........................... 3
Forward-Looking Statements............. 10
Recent Developments.................... 11
Use of Proceeds........................ 11
Dividend Policy........................ 12
Capitalization......................... 14
Management's Discussion and Analysis or
Plan of Operation.................... 14
Business............................... 15
Management............................. 24
Certain Relationships and Related
Transactions......................... 32
Security Ownership of Management and
Certain Beneficial Owners............ 33
Supervision and Regulation............. 34
Description of Capital Stock........... 40
Shares Eligible for Future Sale........ 42
Underwriting........................... 43
Legal Opinions......................... 45
Experts................................ 45
Additional Information................. 45
Index to Financial Statements.......... F-1
</TABLE>
------------------------
UNTIL AUGUST , 1999 (90 DAYS AFTER THE COMMENCEMENT OF THE OFFERING),
ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON SHARES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
700,000
SUNCOAST BANCORP, INC.
(SUNCOAST NATIONAL BANK LOGO)
COMMON SHARES
------------------------
PROSPECTUS
------------------------
ASHTIN KELLY & CO.
MAY , 1999
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 61
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 607.0850, Florida Statutes, grants a corporation the power to
indemnify its directors, officers, employees, and agents for various expenses
incurred resulting from various actions taken by its directors, officers,
employees, or agents on behalf of the corporation. In general, if an individual
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the action was
unlawful, then the corporation has the power to indemnify said individual who
was or is a party to any proceeding (including, in the absence of an
adjudication of liability (unless the court otherwise determines), any
proceeding by or in the right of the corporation) against liability expenses,
including counsel fees, incurred in connection with such proceeding, including
any appeal thereof (and, as to actions by or in the right of the corporation,
against expenses and amounts paid in settlement not exceeding, in the judgment
of the board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof). To the extent that
a director, officer, employee, or agent has been successful on the merits or
otherwise in defense of any proceeding, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith. The term
"proceeding" includes any threatened, pending, or completed action, suit, or
other type of proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Any indemnification in connection with the foregoing, unless pursuant
to a determination by a court, shall be made by the corporation upon a
determination that indemnification is proper in the circumstances because the
individual has met the applicable standard of conduct. The determination shall
be made (i) by the board of directors by a majority vote of a quorum consisting
of directors who are not parties to such proceeding; (ii) by majority vote of a
committee duly designated by the board of directors consisting solely of two or
more directors not at the time parties to the proceeding; (iii) by independent
legal counsel selected by the board of directors or such committee; or (iv) by
the shareholders by a majority vote of a quorum consisting of shareholders who
are not parties to such proceeding. Evaluation of the reasonableness of expenses
and authorization of indemnification shall be made in the same manner as the
determination that indemnification is permissible. However, if the determination
of permissibility is made by independent legal counsel, then the directors or
the committee shall evaluate the reasonableness of expenses and may authorize
indemnification. Expenses incurred by an officer or director in defending a
civil or criminal proceeding may be paid by the corporation in advance of the
final disposition of the proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay such amount if he is ultimately found
not to be entitled to indemnification by the corporation. Expenses incurred by
other employees and agents may be paid in advance upon such terms or conditions
that the board of directors deems appropriate.
Section 607.0850 also provides that the indemnification and advancement
of expenses provided pursuant to that Section are not exclusive, and a
corporation may make any other or further indemnification or advancement of
expenses of any of its directors, officers, employees, or agents, under any
bylaw, agreement, vote of shareholders or disinterested directors, or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office. However, indemnification or advancement of expenses
may not be made if a judgment or other final adjudication
II-1
<PAGE> 62
established that the individual's actions, or omissions to act, were material to
the cause of action so adjudicated and constitute (i) a violation of the
criminal law (unless the individual had reasonable cause to believe his conduct
was lawful or had no reasonable cause to believe his conduct was unlawful); (ii)
a transaction from which the individual derived an improper personal benefit;
(iii) in the case of a director, a circumstance under which the liability
provisions of Section 607.0834 are applicable; or (iv) willful misconduct or a
conscious disregard for the best interests of the corporation in a proceeding by
or in the right of the corporation to procure a judgment in its favor in a
proceeding by or in the right of a shareholder. Indemnification and advancement
of expenses shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such person, unless otherwise provided when authorized or ratified.
Section 607.0850 further provides that unless the corporation's
articles of incorporation provide otherwise, then notwithstanding the failure of
a corporation to provide indemnification, and despite any contrary determination
of the board or of the shareholders in the specific case, a director, officer,
employee, or agent of the corporation who is or was a party to a proceeding may
apply for indemnification or advancement of expenses, or both, to the court
conducting the proceeding, to the circuit court, or to another court of
competent jurisdiction. On receipt of an application, the court, after giving
any notice that it considers necessary, may order indemnification and
advancement of expenses, including expenses incurred in seeking court-ordered
indemnification or advancement of expenses, if it determines that (i) the
individual is entitled to mandatory indemnification under Section 607.0850 (in
which case the court shall also order the corporation to pay the director
reasonable expenses incurred in obtaining court-ordered indemnification or
advancement of expenses); (ii) the individual is entitled to indemnification or
advancement of expenses, or both, by virtue of the exercise by the corporation
of its power under Section 607.0850; or (iii) the individual is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether the person met the
standard of conduct set forth in Section 607.0850. Further, a corporation is
granted the power to purchase and maintain indemnification insurance.
Article VI of the Bylaws of Suncoast Bancorp, Inc. (the "Company")
provide for indemnification of the Company's officers and directors and
advancement of expenses. The text of the indemnification provisions contained in
the Company's Bylaws is set forth in Exhibit 3.2, to this Registration
Statement. Among other things, indemnification is granted to each person who is
or was a director, officer or employee of the Company and each person who is or
was serving at the request of the Company as a director, officer or employee of
another corporation to the full extent authorized by law. Article VI of the
Company's Bylaws also sets forth certain conditions in connection with any
advancement of expenses and provision by the Company of any other
indemnification rights and remedies. The Company also is authorized to purchase
insurance on behalf of any person against liability asserted whether or not the
Company would have the power to indemnify such person under the Bylaws. Pursuant
to such authority, the Company has purchased directors and officers liability
insurance although there is no assurance that the Company will maintain such
insurance or, if so, the amount of insurance that it will so maintain.
Pursuant to the Underwriting Agreement, the Company and the
underwriters have agreed to indemnify each other under certain circumstances and
conditions against and from certain liabilities, including liabilities under the
Securities Act of 1933, as amended. Reference is made to Section 8 of the
Underwriting Agreement filed as Exhibit 1.1 hereto.
II-2
<PAGE> 63
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC Registration Fee......................................................... $ 2,238
NASD Filing Fee.............................................................. 1,305
Transfer Agent and Registration Fees......................................... 3,500 *
Printing and Engraving Expenses.............................................. 40,000 *
Accounting Fees and Expenses................................................. 26,000 *
Legal Fees and Expenses...................................................... 75,000 *
Blue Sky Fees and Expenses................................................... 16,815
Miscellaneous................................................................ 5,142 *
--------
Total.................................................................... $170,000
========
</TABLE>
- ------------------------
* Estimated
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
On April 13, 1998, the Company issued one common share to its Chairman
of the Board solely to facilitate the organization of the Company. The foregoing
sale of the common shares by the Company was exempt from the registration
requirements of the Securities Act by operation of Section 4(2) thereof, the
provision which exempts private offerings. No underwriter or independent selling
agent was used and no compensation or commission was paid in connection with the
sale of the common share.
II-3
<PAGE> 64
ITEM 27. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
(a) NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
<S> <C> <C>
1.1 - Form of Underwriting Agreement *
3.1 - Restated Articles of Incorporation *
3.3 - Bylaws *
4.1 - See Exhibits 3.1 and 3.2 for provisions of the Restated Articles of
Incorporation and Bylaws of the Company defining rights of holders of
the Company's Common Shares
4.2 - Specimen Common Share Certificate *
5 - Form of Legal Opinion of Smith, Mackinnon, Greeley, Bowdoin &
Edwards, P.A. with respect to the validity of the Common Stock being
offered hereby *
10.1 - Form of Employment Agreement to be entered into
between the Company and John T. Stafford *
10.2 - Form of Employment Agreement to be entered into
between the Bank and William F. Gnerre *
10.3 - Suncoast Bancorp, Inc. Director Stock Option Plan *
10.4 - Suncoast Bancorp, Inc. Employee Stock Option Plan *
10.5 - Lease Agreement dated August 28, 1998 between
Suncoast Bancorp, Inc. and Palmer Medical Center Ltd. *
10.6 - Line of Credit and related Promissory Note dated April 29, 1998
between American Bank and Community Holdings Corporation *
10.7 - Amended Line of Credit and related
Promissory Note dated May 12, 1999 between
American Bank and Suncoast Bancorp. Inc.
21 - List of subsidiaries of the Company *
23.1 - Consent of Hill, Barth & King, Inc.
23.2 - Consent of Smith, Mackinnon, Greeley, Bowdoin & Edwards, P.A.
(included in Exhibit 5)
24.1 - Power of Attorney (included in the signature page of the Registration
Statement)
27 - Financial Data Schedule (for SEC use only)
</TABLE>
- ------------------------------------
* Previously filed.
II-4
<PAGE> 65
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers, and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The Registrant will provide to the underwriter at the closing specified
in the underwriting agreement certificates in such denominations and registered
in such names as required by the Underwriter to permit prompt delivery to each
purchaser.
II-5
<PAGE> 66
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment to
Registration Statement to be signed in its behalf by the undersigned, in the
City of Sarasota, State of Florida, on May 28, 1999.
SUNCOAST BANCORP, INC.
/s/ John T. Stafford
-----------------------------------------
John T. Stafford
President and Chief Executive Officer
/s/ William F. Gnerre
-----------------------------------------
William F. Gnerre
Executive Vice President and Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints H.R.
Foxworthy and John T. Stafford, for himself and not for one another, and each
and either of them and his substitutes, a true and lawful attorney in his name,
place and stead, in any and all capacities, to sign his name to any and all
amendments to this Registration Statement, including post-effective amendments,
and to cause the same to be filed with the Securities and Exchange Commission,
granting unto said attorneys and each of them full power of substitution and
full power and authority to do and perform any act and thing necessary and
proper to be done in the premises, as fully to all intents and purposes as the
undersigned could do if personally present, and each of the undersigned for
himself hereby ratifies and confirms all that said attorneys or any one of them
shall lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
Amendment to Registration Statement was signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ H. R. Foxworthy Chairman of the Board May 28, 1999
- -------------------------------------------- and Director
H. R. Foxworthy
/s/ John T. Stafford President and Chief Executive May 28, 1999
- -------------------------------------------- Officer and Director
John T. Stafford
</TABLE>
II-6
<PAGE> 67
<TABLE>
<S> <C> <C>
/s/ William F. Gnerre Executive Vice President, May 28, 1999
- -------------------------------------------- Secretary and Director
William F. Gnerre (Principal Financial Officer
and Principal Accounting Officer)
/s/ Larry Berberich Director May 28, 1999
- --------------------------------------------
Larry Berberich
/s/ Henry E. Black Director May 28, 1999
- --------------------------------------------
Henry E. Black, M.D.
/s/ James C. Rutledge Director May 28, 1999
- --------------------------------------------
James C. Rutledge
/s/ Stanley A. Williams Director May 28, 1999
- --------------------------------------------
Stanley A. Williams
/s/ Roy A. Yahraus Director May 28, 1999
- --------------------------------------------
Roy A. Yahraus
</TABLE>
II-7
<PAGE> 68
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ------------------------------
<S> <C> <C>
1.1 - Form of Underwriting Agreement *
3.1 - Restated Articles of Incorporation *
3.3 - Bylaws *
4.1 - See Exhibits 3.1 and 3.2 for provisions of the Restated Articles of
Incorporation and Bylaws of the Company defining rights of holders of
the Company's Common Shares
4.2 - Specimen Common Share Certificate *
5 - Form of Legal Opinion of Smith, Mackinnon, Greeley, Bowdoin &
Edwards, P.A. with respect to the validity of the Common Stock being
offered hereby *
10.1 - Form of Employment Agreement to be entered into
between the Company and John T. Stafford *
10.2 - Form of Employment Agreement to be entered into
between the Bank and William F. Gnerre *
10.3 - Suncoast Bancorp, Inc. Director Stock Option Plan *
10.4 - Suncoast Bancorp, Inc. Employee Stock Option Plan *
10.5 - Lease Agreement dated August 28, 1998 between
Suncoast Bancorp, Inc. and Palmer Medical Center Ltd. *
10.6 - Line of Credit and related Promissory Note dated April 29, 1998
between American Bank and Community Holdings Corporation *
10.7 - Amended Line of Credit and related Promissory Note dated
May 12, 1999 between American Bank and Suncoast Bancorp, Inc.
21 - List of subsidiaries of the Company *
23.1 - Consent of Hill, Barth & King, Inc.
23.2 - Consent of Smith, Mackinnon, Greeley, Bowdoin & Edwards, P.A.
(included in Exhibit 5)
24.1 - Power of Attorney (included in the signature page of the Registration
Statement)
27 - Financial Data Schedule (for SEC use only)
</TABLE>
- ------------------------------------
* Previously filed.
II-8
<PAGE> 1
EXHIBIT 10.7
<TABLE>
<S> <C> <C>
SUNCOAST BANCORP, INC. F/K/A AMERICAN BANK
COMMUNITY HOLDINGS CORPORATION 4702 CORTEZ ROAD WEST
5922 CATTLEMAN ROAD, SUITE 202 BRADENTON, FL 34210 Line of Credit No. 1570759-9001
SARASOTA, FL 34232 Date MAY 12, 1999
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS Max. Credit Amt. $425,000.00
"I" includes each borrower above, "You" means the lender, its successors Loan Rat. No. 1570759-9001
jointly and severally and assigns.
</TABLE>
You have extended to me a line of credit in the
AMOUNT of FOUR HUNDRED TWENTY FIVE THOUSAND AND NO/100 $ 425,000.00
You will make loans to me from time to time until 2:00 P.M. on AUGUST 10, 1999.
Although the line of credit expires on that date, I will remain obligated to
perform all my duties under this agreement so long as I owe you any money
advanced according to the forms of this agreement, as evidenced by any note or
notes I have signed promising to repay those amounts.
This line of credit is an agreement between you and me. It is not intended
that any third party receive any benefit from this agreement, whether by direct
payment, reliance for future payment or in any other manner. This agreement is
not a letter of credit.
1. AMOUNT: This line of credit is:
[X] OBLIGATORY: You may not refuse to make a loan to me under this line of
credit unless one of the following occurs:
a. I have borrowed the maximum amount available to me;
b. This line of credit has expired;
c. I have defaulted on the note (or notes) which show my indebtedness
under this line of credit;
d. I have violated any form of this line of credit or any note or other
agreement entered into in connection with this line of credit;
e.
[ ] DISCRETIONARY: You may refuse to make a loan to me under this line of
credit once the aggregate outstanding advances equal or exceed
$.
Subject to the obligatory or discretionary limitations above, this line of
credit is:
[X] OPEN END (Business or Agricultural only): I may borrow up to the
maximum amount of principal more than one time.
[ ] CLOSED-END: I may borrow up to the maximum only one time.
2. PROMISSORY NOTE: I will repay any advances made according to this line of
credit agreement as set out in the promissory note, I signed on MAY 12,
1999 or any note(s) I sign at a later time which represent advances under
this agreement. The note(s) set(s) out the terms relating to maturity,
interest rate, repayment and advances. It indicated on the promissory note,
the advances will be made as follows: ADVANCES WILL BE MADE PER BORROWER'S
REQUEST TO BE DEPOSITED INTO ACCOUNT #1065248. THE MINIMUM DRAW AMOUNT IS
$1,000.00 (ONE THOUSAND).
3. RELATED DOCUMENTS: I have signed the following documents in connection with
this line of credit and note(s) entered into in accordance with this line
of credit:
[ ] security agreement dated [ ]
[ ] mortgage dated [ ]
[X] guaranty dated MAY 12, 1999 [ ]
4. REMEDIES: If I am in default on the note(s) you may:
a. take any action as provided in the related documents,
b. without notice to me, terminate this line of credit.
By selecting any of these remedies you do not give up your right to
?????? use any other remedy. By deciding not to use any remedy should I
default, you do not waive your right to later consider the event a default
if it happens again.
5. COSTS AND FEES: If you hire an attorney to enforce this agreement, I will pay
your reasonable attorney's fees, where permitted by law, I will also pay
your court costs and costs of collection, where permitted by law.
6. COVENANTS: For as long as this line of credit is in effect or I owe you money
for advances made in accordance with the line of credit, I will do the
following:
a. maintain books and records of my operations relating to the need for
this line of credit;
b. permit you or any of your representatives to inspect and/or copy these
records;
c. provide to you any documentation requested by you which support the
reason for making any advance under this line of credit;
d. permit you to make any advance payable to the seller/or sellers and me)
of any items being purchased with that advance;
e.
7. NOTICES: All notices or other correspondence with me should be sent to my
address stated above. The notice or correspondence shall be effective when
deposited in the mail, first class, or delivered to me in person.
8. MISCELLANEOUS: This line of credit may not be changed except by a written
agreement signed by you and me. The law of the state in which you are
located will govern this agreement. Any term of this agreement which is
contrary to applicable law will not be effective, unless the law permits
you and me to agree to such a variation.
9. THE LENDER SIGNATURES: I AGREE TO THE TERMS OF THIS LINE OF
CREDIT. I HAVE RECEIVED A COPY ON TODAY'S DATE.
SUNCOAST BANCORP, INC. F/K/A COMMUNITY HOLDINGS
CORPORATION
BY:____________________________________________
JOHN T. STAFFORD, PRESIDENT
BY:____________________________________________
WILLIAM F. GNERRE, VICE PRESIDENT
85 BANKERS SYSTEMS, INC., ST. CLOUD, MN 56301 (1-800-387-2341) FORM LCA 5/2/91
<PAGE> 2
SUNCOAST BANCORP, INC. F/K/A
<TABLE>
<S> <C> <C>
COMMUNITY HOLDINGS CORPORATION AMERICAN BANK Loan Number 1570759-9001
5922 CATTLEMAN ROAD, SUITE 202 4702 CORTEZ ROAD WEST Date MAY 12, 1999
SARASOTA, FL 34232 BRADENTON, FL 34210 Mat. Date AUGUST 10, 1999
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS Loan Amount $425,000.00
"I" includes each borrower above, "You" means the lender, its Renewal of MODIFY/INCREASE
jointly and severally. successors and assigns.
</TABLE>
I hereby authorize and request the following disbursement from the loan
referenced above:
<TABLE>
<S> <C> <C> <C>
a. Amount given to me directly $ i. $
b. Amount paid on my account # $ j. CORPORATE SEARCH $ 25.00
c. To Lendor $ 100.00 k. DOC STAMPS ON NEW $100,000.00 $ 350.00
Amounts paid to others on my behalf: $ l. MODIFICATION OF LOAN $
d. To Property Insurance Company $ m. H1531311-9001 $ 325,000.00
e. To Credit Life Insurance Company $ n. AMOUNT LEFT TO DRAW $ 99,525.00
f. To Disability Insurance Company $ o. $
g. To Public Officials $ p. $
h. $ q. $
</TABLE>
<TABLE>
<S> <C>
Comments: THIS IS THE MODIFICATION AND INCREASE SUNCOAST BANCORP, INC. F/K/A
OF LOAN #1531311 9001 WITH THE EXTENTION OF COMMUNITY HOLDINGS CORPORATION
NEW FUNDS IN THE AMOUNT OF $100,000.00
BY:
-----------------------------------
JOHN T. STAFFORD, PRESIDENT
Loan Officer: BY:
------------------------------ -----------------------------------
WILLIAM F. GNERRE, VICE PRESIDENT
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
SUNCOAST BANCORP, INC. F/K/A AMERICAN BANK Loan Number 1570759-9001
COMMUNITY HOLDINGS CORPORATION 4702 CORTEZ ROAD WEST Date MAY 12, 1999
5922 CATTLEMAN ROAD, SUITE 202 BRADENTON, FL 34210 Maturity Date AUGUST 10, 1999
SARASOTA, FL 34232 Loan Amount $425,000.00
Renewal of MODIFY/INCREASE
OFF/PROCESS: CNR/KMO
BORROWER'S NAME AND ADDRESS LENDER'S NAME AND ADDRESS
"I" includes each borrower "You" means the lender,
above, joint and severally. its successors and assigns.
</TABLE>
For value received, I promise to pay to you, or your order, at your address
listed above the PRINCIPAL sum of FOUR HUNDRED TWENTY FIVE THOUSAND AND
NO/100****** Dollars $425,000.00
____ SINGLE ADVANCE: I will receive all of this principal sum on _____________.
No additional advances are contemplated under this note.
XX MULTIPLE ADVANCE: The principal sum shown above is the maximum amount of
principal I can borrow under this note. On MAY 12, 1999 I will receive the
amount of $425.00, and future principal advances are contemplated.
Conditions: The conditions for future advances are SEE THE LINE OF CREDIT
AGREEMENT.................................................................
--------------------------------------------------------------------------
--------------------------------------------------------------------------
XX OPEN END CREDIT: You and I agree that I may borrow up to the maximum
amount of principal more than one time. This feature is subject to all
other conditions and expires on AUGUST 10, 1999.
___ CLOSED END CREDIT: You and I agree that I may borrow up to the maximum
only one time (and subject to all other conditions).
INTEREST: I agree to pay interest on the outstanding principal balance from
MAY 12, 1999 at the rate of 8.750% per year until FIRST CHANGE DATE.
XX VARIABLE RATE: This rate may then change as stated below.
XX INDEX RATE: The future rate will be 1.000% OVER the following index
rate: CHASE MANHATTAN PRIME RATE.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
___ NO INDEX: The future rate will not be subject to any internal or
external index. It will be entirely in your control.
XX FREQUENCY AND TIMING: The rate on this note may change as often as
DAILY.
A change in the interest rate will take effect ON THE SAME DAY
___ LIMITATIONS: During the term of this loan, the applicable annual
interest rate will not be more than __________% or less than ________%.
The rate may not change more than __________% each __________.
EFFECT OF VARIABLE RATE: A change in the interest rate will have the
following effect on the payouts:
___ The amount of each scheduled payment will change.
___ The amount of the initial payment will change.
XX THE AMOUNT DUE AT MATURITY WILL CHANGE.
ACCRUAL METHOD: Interest will be calculated on a ACTUAL/365 basis.
POST MATURITY RATE: I agree to pay interest on the unpaid balance of this note
owing after maturity, and until paid in full, as stated below:
___ on the same fixed or variable rate basis in effect before maturity
(as indicated above).
XX at a rate equal to 18.00%.
XX LATE CHARGE: If a payment is made more than 10 days after it is due, I
agree to pay a late charge of 5.000% OF THE LATE PAYMENT WITH A MINIMUM
OF $5.00.
XX ADDITIONAL CHARGES: In addition to interest, I agree to pay the following
charges which XXX are ___ are not included in the principal amount above:
SEE THE DISBURSEMENT AUTHORIZATION FOR AN ITEMIZATION OF THE FEES.
PAYMENTS: I agree to pay the note as follows:
XX INTEREST: I agree to pay accrued interest AT MATURITY
--------------------------------------------------------------------------
XX PRINCIPAL: I agree to pay the principal AUGUST 10, 1999
--------------------------------------------------------------------------
___ INSTALLMENTS: I agree to pay this note in _______ payments. The first
payment will be in the amount of $ _________ and will be due ____________.
A payment of $ _________ will be due _____________, thereafter. The final
payment of the entire unpaid balance of principal and interest will be
due ___________________________.
ADDITIONAL TERMS:
IF I FAIL TO MAKE A PAYMENT WITHIN 10 DAYS OF WHEN IT IS DUE, I AGREE TO PAY A
LATE CHARGE OF 5.0% OF THE AMOUNT DELINQUENT.
THIS NOTE ENCOMPASSES THE MODIFICATION OF AN EXISTING OBLIGATION DATED 4/29/98
IN THE ORIGINAL PRINCIPAL AMOUNT OF $325,000.00, UPON WHICH DOCUMENTARY STAMP
TAXES WERE PREVIOUSLY PAID AND ADVANCES OF NEW MONEY. PURSUANT TO SECTION
201.09, FLORIDA STATUTES, AS AMENDED, BY CHAPTER 98.187, THE TOTAL AMOUNT OF
THE INCREASE OF THE MODIFICATION NOTE IS $100,000.00, UPON WHICH DOCUMENTARY
STAMP TAXES HAVE BEEN PAID AND AFFIXED TO THIS OBLIGATION.
<TABLE>
<S> <C>
XX SECURITY: This note is separately secured by (describe separate PURPOSE: The purpose of this loan is BUSINESS:
document by type and date): EIGHT PERSONAL GUARANTYS MODIFY/INCREASE FOR WORKING CAPITAL
DATED 5/12/99 SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE INCLUDING
THOSE ON PAGE 2), I have received a copy on today's date.
This section is for your internal use. Failure to list a separate
security document does not mean the agreement will not secure this note.)
SUNCOAST BANCORP, INC. F/K/A COMMUNITY
HOLDINGS CORPORATION
Signature for Lender
BY:
- ------------------------------------------- ---------------------------------------------
JOHN T. STAFFORD, PRESIDENT
BY:
- ------------------------------------------- ---------------------------------------------
WILLIAM F. GNERRE, VICE PRESIDENT
- ------------------------------------------- ---------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF HILL, BARTH & KING, INC., INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on the Pre-Effective Amendment No. 3 to Form SB-2 and
related Prospectus of Suncoast Bancorp, Inc. for the registration of 805,000
shares of its common stock and to the incorporation therein of our report dated
March 22, 1999 relating to the financial statements of Suncoast Bancorp, Inc.
as of December 31, 1998 and for the period from April 1, 1998 (date of
inception) to December 31, 1998.
/s/ Hill, Barth & King, Inc.
-----------------------------------
HILL, BARTH & KING, INC.
Certified Public Accountants
Naples, Florida
May 26, 1999
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE UNAUDITED INTERIM
FINANCIAL STATEMENTS DATED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 23,325
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 188,792
<DEPOSITS> 0
<SHORT-TERM> 251,188
<LIABILITIES-OTHER> 66,936
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> (128,332)
<TOTAL-LIABILITIES-AND-EQUITY> 188,792
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 0
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 6,369
<INTEREST-INCOME-NET> (6,369)
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 121,964
<INCOME-PRETAX> (128,333)
<INCOME-PRE-EXTRAORDINARY> (128,333)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (128,333)
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
