<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number:
June 30, 1999 333-67107
HEARTLAND BANCSHARES, INC.
- -------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Florida 65-0854929
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
245 US 27 North, Sebring, Florida 33870
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (941) 386-1300
----------------------------------------------------
Not Applicable
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(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer=s classes of
common equity, as of the latest practicable date:
<TABLE>
<CAPTION>
Common Stock, $.10 Par Value 653,530
- ----------------------------------- -------------------------------------
<S> <C>
Class Outstanding as of August 10, 1999
</TABLE>
Transitional Small Business Disclosure Format:
Yes [ ] No [X]
<PAGE> 2
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
HEARTLAND BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(Unaudited)
June 30, 1999
<TABLE>
<CAPTION>
ASSETS
------
<S> <C>
Cash $ 46,448
Restricted cash and cash equivalents 6,226,663
Land 890,786
Construction in Progress 382,909
Deposits on furniture and equipment 112,290
Deferred offering costs 20,214
----------
Total Assets $7,679,310
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Liabilities
- -----------
Escrow liability $6,183,800
Accounts payable 16,636
Notes payable 1,482,875
----------
Total liabilities 7,683,311
----------
Shareholders' Equity
- --------------------
Common stock - Par value $.10 per share;
10,000,000 shares authorized; 14,500 shares
issued and outstanding 1,450
Preferred stock - $.01 par value; 1,000,000 shares
authorized; no shares issued or outstanding --
Additional paid-in capital 143,550
Accumulated deficit during development stage (149,001)
----------
Total Shareholders' Equity (4,001)
----------
Total Liabilities and Shareholders' Equity $7,679,310
==========
</TABLE>
See Accompanying Note to Financial Statements.
1
<PAGE> 3
HEARTLAND BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Three Months
Ended Ended
June 30, 1999 June 30, 1999
------------- -------------
<S> <C> <C>
INCOME
Interest on escrow account $ 42,863 $ 42,863
Reimbursement of overpayment of
legal fees 10,450 --
--------- --------
53,313 42,863
--------- --------
EXPENSES
Organizational costs:
Salaries 66,216 48,451
Interest expense 13,470 --
Legal and professional 3,316 66
Insurance 3,395 --
Amortization of loan costs 2,875 1,437
Miscellaneous expenses 20,623 15,849
--------- --------
Total expenses 109,895 65,803
--------- --------
Net loss $ (56,582) $(22,940)
========= ========
Net loss per share $ (4.32) $ (1.58)
========= ========
Average shares outstanding 13,105 14,500
========= ========
</TABLE>
See Accompanying Note to Financial Statements.
2
<PAGE> 4
HEARTLAND BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)
Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
Accumulated
Deficit
Additional During
Common Paid-in Development
Stock Capital Stage
-------- ---------- -----------
<S> <C> <C> <C>
Beginning balance, January 1, 1999 $ 100 $ 9,900 $ (92,419)
Issuance of 13,500 shares
of common stock at $10
per share 1,350 133,650 --
Net loss for the six months
ended June 30, 1999 -- -- (56,582)
------ -------- ---------
Balance, June 30, 1999 $1,450 $143,550 $(149,001)
====== ======== =========
</TABLE>
See Accompanying Note to Financial Statements.
3
<PAGE> 5
HEARTLAND BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended June 30, 1999
<TABLE>
<CAPTION>
<S> <C>
OPERATING ACTIVITIES
- --------------------
Net loss $ (56,582)
Adjustment to reconcile net loss
to net cash used in operating activities:
Amortization of loan costs 2,875
Change in accounts payable (2,044)
----------
Net Cash Used In Operating Activities (55,751)
----------
INVESTING ACTIVITIES
- --------------------
Restricted cash and cash equivalents (6,226,663)
Acquisition of land and land related costs (245,011)
Construction in progress (382,909)
Deposits on furniture and equipment (112,290)
----------
Net Cash Used In Investing Activities (6,966,873)
----------
FINANCING ACTIVITIES
- --------------------
Escrow liability 6,183,800
Sale of common stock 135,000
Net proceeds from note payable 745,000
Deferred offering costs (15,607)
----------
Net Cash Provided By Financing Activities 7,048,193
----------
Net Increase in Cash 25,569
Beginning Cash 20,879
----------
Ending Cash $ 46,448
==========
</TABLE>
See Accompanying Note to Financial Statements.
4
<PAGE> 6
HEARTLAND BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTE TO FINANCIAL STATEMENTS
(Unaudited)
Six Months Ended June 30, 1999
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Organization:
Heartland Bancshares, Inc. (the Company) is a Florida
corporation with headquarters in Sebring, Florida. The
Company is a development stage company formed August 3, 1998,
for the purpose of raising up to $6.5 million in equity
capital through a common stock offering, and investing at
least $5.6 million of proceeds therefrom in the
capitalization of a proposed banking subsidiary, Heartland
National Bank (Bank). The Bank will be a National banking
institution with headquarters in Sebring and a branch in Lake
Placid, Florida. The Company has received preliminary
approval from the Office of the Comptroller of the Currency
(OCC) for a national bank charter. Funding during the
development stage has come from the proceeds of sale of
common stock to the organizers, and two lines of credit from
an unrelated banking institution. The Company has not
realized any revenue during this initial development stage.
The Company's efforts have been directed exclusively to
obtaining the necessary regulatory approvals for both the
Company and the Bank, and the raising of capital sufficient
to meet other organizational requirements. During this phase,
the Company has incurred, or will incur, costs generally
allocable to either organizational costs, pre-opening
expense, or deferred offering costs. In addition, the Company
has acquired, and will continue to acquire, banking premises
and other capital items necessary for operating the Bank.
Organizational costs consist principally of the cost incurred
in raising capital, outside consulting and legal fees, and
regulatory application fees requisite to formation of the
Company and the Bank. These costs are charged to expense as
incurred.
Pre-opening costs are costs that would ordinarily be
expensed, even if the Company were not a development stage
company. Such costs consist principally of salaries, rent,
utilities, dues and memberships and other expenses. These
costs are expensed as incurred.
Certain costs of the Company's public offering have been
capitalized as deferred offering costs. These costs will be
charged against additional paid-in capital.
5
<PAGE> 7
HEARTLAND BANCSHARES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTE TO FINANCIAL STATEMENTS (Continued)
(Unaudited)
Six Months Ended June 30, 1999
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION - CONTINUED
Basis of Presentation:
The accompanying unaudited condensed financial statements
have been prepared in accordance with the instructions of
Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of
normal recurring entries) considered necessary for a fair
presentation of the Company's financial results have been
made. Operating results for the six months ended June 30,
1999 are not indicative of the results that may be expected
for the year ending December 31, 1999. Moreover, at June 30,
1999, the Company is still in the development stage and has
not begun operations.
6
<PAGE> 8
Item 2. Management's Plan of Operation
Heartland Bancshares, Inc. (the "Company") is in the development
stage. The Company was incorporated in Florida on August 3, 1998 to become a
bank holding company and to own and control all of the outstanding shares of a
national bank, Heartland National Bank in Sebring and Lake Placid, Florida (the
"Bank"). In its initial public offering, which was completed on July 5, 1999,
the Company sold and issued 639,030 shares of its $.10 par value common stock.
Proceeds from the stock offering amounted to approximately $6,343,993, net of
selling expenses. See "Part II - Changes in Securities and Use of Proceeds."
The Company intends to purchase 100% of the Bank's common stock for an
aggregate purchase price of $6,000,000. The Bank will use the proceeds of the
sale of stock to fund its capital accounts immediately prior to the
commencement of banking operations, which is expected to occur on or about
September 7, 1999.
The Company believes that the minimum proceeds of the offering will
satisfy the cash requirements of the Company and the Bank for their respective
initial years of operations. It is not anticipated that the Company will find
it necessary to raise additional funds to meet expenditures required to operate
the business of the Company and/or the Bank during the next 12 months. All
anticipated material expenditures for such period have been identified and
provided for out of the proceedings of the offering.
Cautionary Note Regarding Forward-Looking Statements
The Company may, from time to time, make written or oral
forward-looking statements, including statements contained in the Company's
filings with the Securities and Exchange Commission (the "Commission") and its
reports to stockholders. Such forward-looking statements are made based on
management's belief as well as assumptions made by, and information currently
available to, management pursuant to "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. The Company's actual results may
differ materially from the results anticipated in these forward-looking
statements due to a variety of factors, including governmental monetary and
fiscal policies, deposit levels, loan demand, loan collateral values,
securities portfolio values and interest rate risk management; the effects of
competition in the banking business from other commercial banks, savings and
loan associations, mortgage banking firms, consumer finance companies, credit
unions, securities brokerage firms, insurance companies, money market mutual
funds and other financial institutions operating in the Company's market area
and elsewhere, including institutions operating through the Internet; changes
in government regulations relating to the banking industry, including
regulations relating to branching and acquisitions; failure of assumptions
underlying the establishment of reserves for loan losses, including the value
of collateral underlying delinquent loans, and other factors. The Company
cautions that such factors are not exclusive. The Company does not undertake to
update any forward-looking statements that may be made from time to time by, or
on behalf of, the Company.
7
<PAGE> 9
PART II. - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES
On February 5, 1999, the Company commenced an initial public offering
of its common stock, $.01 par value per share. The shares of the common stock
sold in the offering were registered under the Securities Act of 1933, as
amended, on a Registration Statement on Form SB-2 (the "Registration
Statement," registration number 333-67107). The Registration Statement, which
registered 650,000 shares of the Common Stock, was declared effective by the
Securities and Exchange Commission on February 5, 1999. The offering terminated
on July 5, 1999 after the Company had sold 639,030 shares of the common stock
registered under the Registration Statement. Each share of the common stock was
sold at a price to the public of $10.00 per share for an aggregate offering
price of $6.5 million.
As set forth in the table below, from the effective date of the
Registration Statement to July 5, 1999, the Company paid expenses in the
aggregate of approximately $46,300 in connection with the Offering. All of the
amounts shown in the table are estimated except for the Securities and Exchange
Commission registration fee. None of the amounts shown were paid directly or
indirectly to any director, officer or general partner of the Company, or any
of their associates, or to any persons owning 10% or more of any class of
equity securities of the Company, or an affiliate of the Company.
<TABLE>
<S> <C>
SEC registration fee .......................................................... $ 1,807
Blue sky qualification fees and expenses ...................................... 1,500
Printing and engraving expenses ............................................... 13,000
Legal fees and expenses ....................................................... 20,000
Accounting fees and expenses .................................................. 2,000
Mailing and Distribution ...................................................... 6,000
Miscellaneous ................................................................. 2,000
--------
Total ......................................................................... $ 46,307
========
</TABLE>
After deducting the offering expenses described above, net proceeds to
the Company from the offering were approximately $6,343,993. Of this amount,
the Company intends to use $6,000,000 to purchase 100% of the issued and
outstanding capital stock of the Bank and the remaining $343,993 will be used
to repay expenses incurred in the organization of the Company as well as for
general working capital. The Company intends to capitalize the Bank on or about
September 7, 1999. None of the net proceeds of the offering were paid directly
or indirectly to any director, officer, general partner of the Company or any
of their associates, or to any persons owning 10% or more of any class of
equity securities of the Company, or to an affiliate of the Company.
8
<PAGE> 10
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following exhibit is filed with this Report.
<TABLE>
<CAPTION>
Exhibit No. Description
------------ -----------
<S> <C>
27 Financial Data Schedule (for SEC use only)
</TABLE>
(b) Reports on Form 8-K. No report on Form 8-K was filed during
the quarter ended June 30, 1999.
9
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
Date: August 10, 1999 By: /s/ James C. Clinard
--------------------------------------------------------------------
James C. Clinard, President and Chief Executive Officer
(principal executive officer)
Date: August 10, 1999 By: /s/ Donald N. Abbott
--------------------------------------------------------------------
Donald N. Abbott, Chief Financial Officer
(principal financial and accounting officer)
</TABLE>
10
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1999 UNAUDITED FINANCIAL STATEMENTS OF THE HEARTLAND BANCSHARES JUNE 1999 10-QSB
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-QSB.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 46
<INT-BEARING-DEPOSITS> 6,227
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 7,679
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,683
<LONG-TERM> 0
0
0
<COMMON> 0
<OTHER-SE> (4)
<TOTAL-LIABILITIES-AND-EQUITY> 7,679
<INTEREST-LOAN> 0
<INTEREST-INVEST> 0
<INTEREST-OTHER> 43
<INTEREST-TOTAL> 43
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 13
<INTEREST-INCOME-NET> 30
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 97
<INCOME-PRETAX> (57)
<INCOME-PRE-EXTRAORDINARY> (57)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57)
<EPS-BASIC> (4.32)
<EPS-DILUTED> (4.32)
<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>
