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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 29, 1999
REGISTRATION NO. 333-75727
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SATILLA FINANCIAL SERVICES, INC.
(Name of Small Business Issuer in Its Charter)
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<S> <C> <C>
GEORGIA 6712 58-2434925
(State or other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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RODNEY E. BENNETT
180 MARINERS DRIVE 180 MARINERS DRIVE
KINGSLAND, GEORGIA 31548 KINGSLAND, GEORGIA 31548
TELEPHONE: (912) 882-4775 TELEPHONE: (912) 882-4775
FACSIMILE: (912) 882-1780 FACSIMILE: (912) 882-1780
(Address, including zip code, (Name, address, including zip code
and telephone number, including and telephone number, including area
area code, of the registrant's code, of agent for service)
principal executive offices)
Copies to:
RALPH F. MACDONALD, III
MARK C. KANALY
ALSTON & BIRD LLP
ONE ATLANTIC CENTER
1201 WEST PEACHTREE STREET
ATLANTA, GEORGIA 30309-3424
TELEPHONE: (404) 881-7000
FACSIMILE: (404) 881-4777
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effectiveness of this registration statement.
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) 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(c)
under the Securities Act, check the following box and list the Securities Act
registration 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 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 IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE 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 IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE 29, 1999
SATILLA FINANCIAL SERVICES, INC.
A PROPOSED HOLDING COMPANY FOR
SATILLA COMMUNITY BANK
(IN ORGANIZATION)
COMMON STOCK
MINIMUM OFFERING -- 460,000 SHARES
MAXIMUM OFFERING -- 550,000 SHARES
ORGANIZER WARRANTS
TO PURCHASE UP TO 100,000 SHARES OF COMMON STOCK
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You must purchase at least 200 shares at a price of $10.00 per share to
participate in this offering. This offering will terminate on ______, 1999,
unless we extend it. We will not, however, extend this offering beyond _______,
1999. The purpose of this offering is to raise the funds required to start
Satilla Community Bank, a new bank. If we do not receive subscriptions for at
least 460,000 shares, or if we or Satilla Community Bank do not obtain the
regulatory approvals required for our formation by ________, 1999, we will
terminate this offering and promptly return all subscription funds plus
interest, if any, to subscribers.
We are also offering, to our organizers only, organizer warrants to
purchase an aggregate of 100,000 shares of our common stock. We are offering the
organizer warrants to our organizers on a pro rata basis, based upon the number
of shares of our common stock that they purchase in this offering.
This is the initial public offering of our common stock. The market price
of our common stock after this offering may be higher or lower than the public
offering price. No underwriters are involved in this offering, and we will sell
our common stock solely through the efforts of our organizers. We presently do
not intend to apply for listing of our common stock on any national securities
exchange or on the Nasdaq Stock Market.
INVESTING IN OUR COMMON STOCK IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
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ESTIMATED PROCEEDS TO
PRICE TO PUBLIC EXPENSES* SATILLA
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Per Share............................................ $ 10.00 $ 0.22 $ 9.78
Minimum Offering (460,000 shares).................... $4,600,000 $100,000 $4,500,000
Maximum Offering (600,000 shares).................... $5,500,000 $100,000 $5,400,000
</TABLE>
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* Includes legal, accounting, printing and postage costs related to this
offering. Per share data assumes completion of the minimum offering of
460,000 shares of our common stock.
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OUR COMMON STOCK IS NOT AN ACCOUNT OR A DEPOSIT AND IS NOT INSURED BY THE
FDIC OR ANY GOVERNMENTAL AGENCY.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OUR COMMON STOCK OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
June , 1999
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[GEORGIA MAP SHOWING THE BANK'S LOCATIONS]
[SCHEMATIC OF OFFICE]
[PICTURE OF THE ORGANIZERS WITH THEIR NAMES BELOW THEIR PICTURES]
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PROSPECTUS SUMMARY
The following is a summary of the contents of this prospectus. It does not
contain all the information that may be important to you. You should read the
entire prospectus carefully before making any decision to invest in our common
stock.
SATILLA FINANCIAL SERVICES
We are a Georgia corporation that will become a bank holding company for
Satilla Community Bank, which is currently being organized as a
Georgia-chartered commercial bank. We are not yet an operating company and we
have engaged only in organizational activities to date.
We expect to conduct all our banking activities through Satilla Community
Bank. Our principal business will be to accept a variety of deposits from the
general public, and we will use these funds to make business, consumer,
mortgage, and other loans and extensions of credit.
OUR MARKET AREA AND STRATEGY
Our primary market area will be Brantley County and Camden County, Georgia.
We will also serve certain nearby areas of Charlton, Glynn, Pierce, and Ware
Counties in Georgia and Nassau County in Florida. These markets are primarily
served by branches of large regional and national financial institutions
headquartered outside of the area. As a result, we believe these markets need a
locally-owned and operated financial institution managed by people in and from
the communities served.
We believe that we will be able to offer personalized and flexible banking
services to the communities in our market area and that we will be able to react
quickly to changes in those communities. We also intend to offer products
tailored to the specific needs of our communities.
OUR CURRENT STATUS AND BUSINESS PLAN
On April 7, 1999, our organizers received preliminary approval of Satilla
Community Bank's state charter from the Georgia Department of Banking and
Finance. On April 9, 1999, our organizers received preliminary approval from the
FDIC for federal deposit insurance of Satilla Community Bank's deposits. Each of
these approvals is conditioned upon the completion of this offering and the
adequate capitalization of Satilla Community Bank. We will not receive final
approval until we satisfy these conditions.
On May 4, 1999, we filed applications with the Federal Reserve and the
Georgia Department of Banking and Finance to become a bank holding company of
Satilla Community Bank. On June 8, 1999, the Georgia Department approved our
application. Our application to the Federal Reserve is pending and has not yet
been approved.
Once we obtain the final necessary regulatory approvals, we will begin
banking operations with full-service offices located in St. Marys, Camden
County, Georgia and Nahunta, Brantley County, Georgia.
OUR ORGANIZERS AND MANAGEMENT
Our organizers are David L. Knox, Sr., Rodney E. Bennett, , M. Anthony Ham,
Curtis J. Tumlin, II, Robert T. Baird, Walter A. Bennett, Richard L. Brandon,
Cecily A. Hill, Wayne E. Knox, Sheila A. Meadows, Bill F. Raulerson, and Steve
E. Rawl. Our organizers will comprise our initial Board of Directors and several
of them will also serve as our officers. Collectively, our organizers have more
than 115 years of banking experience. Our organizers represent local business
persons and banking professionals, each having strong ties and familiarity with
our community.
We have identified qualified candidates to perform other management
positions. We will pool the talents and varied backgrounds of our organizers
with those of other select qualified persons in the banking industry to form an
effective management team.
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In exchange for their contribution to our initial capital, we issued shares
of our common stock to each of the organizers as of December 30, 1998, at the
same price per share as the initial offering price. We issued 150 shares of our
common stock to each of David L. Knox and Rodney E. Bennett and 100 shares to
each of our other ten organizers, or a total of 1,300 shares to all of our
organizers.
OUR PRINCIPAL EXECUTIVE OFFICES
Our principal executive offices will be located at 6308 Highway 40 East,
St. Marys, GA 31558, telephone number (912) 882-4775. Our temporary offices are
across Highway 40 at 180 Mariners Drive, Kingsland, Georgia 35418, at the same
telephone number.
THIS OFFERING
This is the initial public offering of our common stock. We are offering a
minimum of 460,000 shares and a maximum of 550,000 shares of our common stock to
the general public at a price of $10.00 per share. You must purchase at least
200 shares to participate in this offering. This offering will terminate on
____, 1999, unless we extend it. We will not, however, extend this offering
beyond ______, 1999.
Our organizers currently intend to subscribe for approximately 110,000
shares of our common stock in this offering. We are offering, to our organizers
only, organizer warrants to purchase an aggregate of 100,000 shares. We are
offering the organizers warrants to our organizers on a pro rata basis, based
upon the number of shares of our common stock that they purchase in this
offering.
Our organizers may, but are not obligated to, purchase additional shares if
such purchases are necessary to complete the minimum offering, but we will not
issue organizer warrants to purchase an aggregate of more than 100,000 shares of
our common stock.
HOW TO PURCHASE SHARES
You may purchase shares of our common stock by completing the subscription
agreement that accompanies this prospectus and then returning it, together with
full payment for the shares you have agreed to purchase, to our escrow agent,
The Bankers Bank, Atlanta, Georgia at the address provided in "This Offering."
CONDITIONS OF THIS OFFERING
If we do not receive subscriptions and payment in full for at least 460,000
shares, or if we or Satilla Community Bank do not receive all the regulatory
approvals required for our formation by _____, 1999, we will terminate this
offering and The Bankers Bank will promptly return your subscription payment to
you, together with interest, if any.
USE OF PROCEEDS
We will use $4.5 million of the net proceeds of this offering to purchase
all of the capital stock of Satilla Community Bank. If the net proceeds of this
offering are more than $4.5 million, we will use the excess for our general
corporate purposes, including future contributions of capital to Satilla
Community Bank, as needed.
Satilla Community Bank will use the $4.5 million of net proceeds that we
contribute to it as follows:
- - approximately $2.2 million to purchase the land for, construct, furnish and
equip its initial offices;
- - approximately $105,000 to repay the debt arising from organizational
expenses; and
- - the remaining approximately $2.2 million for general corporate purposes.
As a result, following this offering Satilla Community Bank will have only
approximately $2.2 million available for working capital and
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for general corporate purposes, including making loans and investments.
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RISK FACTORS
Your investment in our common stock is speculative and involves a high
degree of risk. You should carefully consider the following factors and the
other information we have included in this prospectus before deciding to
purchase our common stock.
YOU MAY LOSE YOUR TOTAL INVESTMENT
Due to the significant risks associated with an investment in the common
stock of a newly-formed company and bank, you should make sure, before
investing, that you are financially able to sustain a total loss of any funds
used to purchase our common stock. Our common stock is not a deposit, and will
not be insured by the FDIC or any other government agency.
WE HAVE NO OPERATING HISTORY
We do not have an operating history. As a result, we are unable to provide
you with access to all of the information available to the investors of
well-established companies with operating histories.
WE MAY NOT BE PROFITABLE
As a result of the substantial start-up costs associated with forming a new
bank, we may not be profitable for several years after commencing business, if
ever. See "Plan of Operation."
WE MAY BE UNABLE TO OBTAIN NECESSARY REGULATORY APPROVAL
We will not begin operations unless the Federal Reserve and the Georgia
Department of Banking and Finance approve our bank holding company applications,
the Georgia Department of Banking and Finance issues to us final approval for
our state bank charter, and the FDIC grants final approval for federal insurance
of our bank's deposits. If we do not obtain these approvals, we will not be able
to begin operations.
WE MAY BE UNABLE TO MEET OUR CAPITAL NEEDS
We make no assurance that the proceeds from this offering will be
sufficient to support our initial operations, or that additional financing will
not be required in the future to meet our capital needs. Our organizers have no
commitments to provide additional funds for our operations if the proceeds of
this offering are insufficient.
WE ARE HIGHLY DEPENDENT UPON OUR ORGANIZERS AND PERSONNEL
We are highly dependent upon the personal efforts and abilities of our
organizers and our proposed initial Board of Directors and management team. Our
Chairman and Chief Marketing Officer, Mr. David L. Knox, Sr., will focus on
marketing our services and, consistent with our regulatory approvals, will not
be involved in our lending activities. We do not know why our regulators
imposed this condition, and our regulators have indicated that this information
is confidential. As a result, we will depend on other officers and employees to
make and administer loans, which could affect our potential loan volume.
If any of our proposed directors or management personnel choose to leave,
their departure could delay the beginning of our operations and could adversely
affect our operations and the value of our common stock. Our ability to
attract, hire, and retain other qualified personnel for key management
positions will affect our profitability and success.
WE WILL BE SUSCEPTIBLE TO INTEREST RATE CHANGES
Our profitability will depend substantially upon our net interest income.
Net interest income is the difference between the interest earned on assets,
such as loans and investment securities, and the interest paid for liabilities,
such as savings and time deposits. Market interest rates for loans, investments,
and deposits are highly sensitive to many factors beyond our control. These
factors include competition, general economic conditions and the policies of
various government and regulatory authorities.
Changes in interest rates may cause significant changes (up or down) in our
net
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interest income. At any given time, our assets and liabilities will be affected
differently by a change in interest rates. Depending on our portfolio of loans
and investments, our profitability may be adversely affected by changes in
interest rates.
WE WILL HAVE LENDING RISKS ASSOCIATED WITH SMALLER BORROWERS AND A NEW LOAN
PORTFOLIO
If our customers do not repay their loans in a timely manner, our earnings
and overall financial condition, as well as the value of our common stock, may
be adversely affected. We anticipate lending primarily to individuals and small-
to medium-sized businesses, which may expose us to greater lending risks than
those of banks lending to larger, better-capitalized businesses with longer
operating histories.
We intend to manage our credit exposure through careful monitoring of loan
applicants and loan concentrations in particular industries, and through loan
approval and review procedures. However, we will not be able to fully evaluate
the quality of our loan portfolio for several years because our loan portfolio
will be comprised entirely of new loans. Our ability to diversify our economic
risks will be limited by our own local markets and economies.
WE WILL FACE STRONG COMPETITION FROM LARGER, MORE ESTABLISHED COMPETITORS
The banking business is highly competitive and we will experience strong
competition from many other financial institutions. We will compete with
commercial banks, credit unions, savings and loan associations, mortgage banking
firms, consumer finance companies, securities brokerage firms, insurance
companies, money market funds and other financial institutions operating in our
primary market area and elsewhere.
We will compete with these institutions both in attracting deposits and in
making loans. In addition, we will have to attract our customer base from other
existing financial institutions and from new residents. Many of our competitors
are well-established and much larger financial institutions. While our
organizers believe we can successfully compete with these other financial
institutions in our markets, we may face a competitive disadvantage as a result
of our smaller size, limited resources and lack of geographic diversification.
Although we plan to compete by concentrating our marketing efforts in the
primary market area with local advertisements, personal contacts and greater
flexibility in working with local customers, we can give no assurance that this
strategy will be successful.
OUR PROPOSED MARKET AREA MAY NOT GROW
Our success will depend upon the growth in population, deposits and housing
starts in our primary market area, as well as the prevailing economy, interest
rates, deposit account growth and operating expense trends. If the communities
in our market area do not grow, or if prevailing economic conditions locally or
nationally are unfavorable, our business may not succeed. Moreover, we cannot
give any assurance that we will benefit from any market growth or favorable
economic conditions if they do occur.
Gilman Paper Company, a leading employer in Camden County, recently sold
certain of its key assets and may be in the process of downsizing or winding up
its business. These changes by Gilman Paper Company, and any similar changes by
other principal employers in our market area, could negatively affect our local
economy and our business.
WE WILL BE SUBJECT TO GOVERNMENT REGULATION, WHICH COULD CHANGE
We will operate in a highly regulated industry and will be subject to
examination, supervision and comprehensive regulation by various federal and
state agencies. Our compliance with these agencies will be costly and may limit
our growth and restrict certain of our activities, including, payment of
dividends, mergers and acquisitions, investments, loans and interest rates
charged, interest rates paid on
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deposits, and locations of offices. We will also be subject to capitalization
guidelines set forth in federal and state legislation.
The laws and regulations applicable to the banking industry could change at
any time, and we cannot predict the impact of these changes on our business and
profitability. Because government regulation greatly affects the business and
financial results of all commercial banks and bank holding companies, our cost
of compliance could adversely affect our ability to operate profitably.
OUR COMMON STOCK HAS NO TRADING MARKET
Our common stock has no trading market, and we do not expect a trading
market to develop. You should be prepared to hold our common stock indefinitely.
You may be unable to sell your shares promptly or at a price equal to or above
the offering price. For these reasons, our common stock may not be appropriate
as a short-term investment.
WE ARBITRARILY DETERMINED THE OFFERING PRICE
Our organizers arbitrarily determined the offering price for our common
stock solely with a view to obtaining a broad distribution of the common stock
in our communities. The offering price may not reflect the actual market value
of our common stock. Following this offering, you may be unable to sell your
shares of our common stock at or above the offering price.
WE WILL NOT PAY DIVIDENDS IN THE FORESEEABLE FUTURE
We do not intend to pay dividends in the foreseeable future. We intend to
retain all future earnings, if any, to preserve our capital and to facilitate
our growth and expansion. Our payment of dividends will also be limited by legal
and regulatory restrictions. Our payment of cash dividends in the future will
depend on our earnings, capital requirements, financial condition, and other
factors considered relevant by our Board of Directors.
WE MAY DILUTE YOUR COMMON STOCK
Our common stock is not subject to any preemptive rights. Therefore, your
percentage ownership of our company will be diluted if we sell additional shares
of our common stock, if our organizers exercise their organizer warrants, and as
we grant stock awards, options or other awards to hire or retain employees.
WE MAY EXPERIENCE PROBLEMS AS A RESULT OF THE YEAR 2000 DATE CHANGE
We are aware of the computer hardware and software issues associated with
the Year 2000. Many computer programs that can only distinguish the final two
digits of the year entered are expected to improperly read entries for the Year
"2000" as the Year "1900."
Because we have not yet begun operations, we do not yet have any existing
computer hardware or software to evaluate and correct. We intend to carefully
evaluate all hardware and software for Year 2000 compliance before purchasing,
licensing, or leasing it from any third party. We are currently in the process
of reviewing computer hardware and software vendors, and Year 2000 capability is
a high priority in this review process. We intend to seek assurances of Year
2000 compliance from all our vendors and business customers.
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IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with different information. We are not
making an offer of our common stock in any state where the offer is not
permitted. You should not assume that the information contained in this
prospectus is accurate as of any date later than June __, 1999.
This prospectus contains forward-looking statements which involve risks and
uncertainties. You can identify these forward-looking statements through our use
of words such as "may," "will," "expect," "anticipate," "believe," "estimate,"
"continue," or other similar words. Our actual results may differ significantly
from the results we discuss in these forward-looking statements, especially
since we are a new company with no operations. Factors that might cause such a
difference include, but are not limited to: our growth and our ability to
maintain growth; governmental monetary and fiscal policies, as well as
legislative and regulatory changes; the effect of interest rate changes on our
level and composition of deposits, loan demand and the value of our loan
collateral and securities; the effects of competition from other financial
institutions operating in our market area and elsewhere, including institutions
operating locally, regionally, nationally and internationally, together with
competitors that offer banking products and services by mail, telephone and
computer and/or the Internet; the failure of assumptions underlying the
establishment of our allowance for loan losses, including the value of
collateral underlying delinquent loans; and those factors discussed in "Risk
Factors" beginning on page 6 of this prospectus.
IMPORTANT NOTICE TO FLORIDA RESIDENTS
Pursuant to Section 517.061(11)(a)(5) of the Florida Securities Act, you
have the right to rescind your subscription (unless you are an institutional
investor described in Section 517.061(7) of the Florida Securities Act) by
giving notice of such recission by telephone, telegraph or letter, within
three days after your first tender consideration, to the issuer or its agent.
If notice is not received by such time, the foregoing right of recission shall
be null and void.
SATILLA FINANCIAL SERVICES
GENERAL
Satilla Financial Services, Inc. ("Satilla") was incorporated as a Georgia
corporation on December 18, 1998 for the purpose of becoming a bank holding
company by acquiring all of the capital stock of Satilla Community Bank (the
"Bank") upon its formation. The Bank is being organized as a Georgia commercial
bank with deposits insured by the Federal Deposit Insurance Corporation (the
"FDIC").
THE ORGANIZERS
The organizers of Satilla and the Bank (collectively, the "Organizers") are
David L. Knox, Sr., Rodney E. Bennett, M. Anthony Ham, Curtis J. Tumlin, II,
Robert T. Baird, Walter A. Bennett, Richard L. Brandon, Cecily A. Hill, Wayne E.
Knox, Sheila A. Meadows, Bill F. Raulerson, and Steve E. Rawl. All of the
Organizers will serve on the initial Board of Directors of both Satilla and the
Bank. David L. Knox, Sr., Chairman of the Board of Directors and Chief Marketing
Officer of Satilla and the Bank, and Rodney E. Bennett, President and Chief
Executive Officer of Satilla and the Bank, collectively have over 65 years of
banking experience, including former lending responsibilities with several
commercial banks.
REGULATORY STATUS
On April 7, 1999, the Georgia Department of Banking and Finance (the
"Georgia Department") granted preliminary approval to the Organizers for the
Bank's state charter. On April 9, 1999, the FDIC granted preliminary approval
to the Organizers for federal deposit insurance of the Bank's deposits. Each of
approval is subject to the completion of this offering, the adequate
capitalization of the Bank and David L. Knox, Sr., the Chairman and Chief
Marketing Officer of Satilla and the Bank, not being involved in lending
activities. Satilla does not know why Mr. Knox is not permitted to be involved
in the lending process, and Satilla's regulators have indicated that this
information is confidential. Final approval of Satilla's applications will not
be granted unless these conditions are properly satisfied.
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On May 4, 1999, the Satilla filed applications with the Board of Governors
of the Federal Reserve System (the "Federal Reserve") and the Georgia Department
seeking approval to become a bank holding company under the federal Bank Holding
Company Act of 1956, as amended (the "BHC Act"), and the Financial Institutions
Code of Georgia, as amended (the "Georgia Code"). Satilla has committed to the
Federal Reserve not to incur any additional debt, other than trade payables and
customary expenses, without prior Federal Reserve approval. On June 8, 1999, the
Georgia Department approved Satilla's bank holding company application.
Satilla's application to the Federal Reserve is pending and has not been
approved.
The Organizers have chosen a holding company structure to afford Satilla
greater organizational, financial and transactional flexibility than would
otherwise be available. The holding company structure will assist the Bank in
maintaining its required capital ratios because, subject to compliance with
Federal Reserve debt guidelines, Satilla may borrow money and contribute the
proceeds to the Bank as primary capital. Moreover, a holding company may engage
in certain non-banking activities that the Federal Reserve has deemed to be
closely related to banking. Although Satilla has no present intention of
engaging in any of these activities, Satilla has the flexibility to commence
these activities upon filing a notice or application with the Federal Reserve.
See "Supervision and Regulation."
OFFICE FACILITIES
The principal executive offices of Satilla and the Bank will be located at
6308 Highway 40 East, St. Marys, GA 31558, telephone number (912) 882-4775.
Satilla's temporary offices are across Highway 40 at 180 Mariners Drive,
Kingsland, Georgia 35418, at the same telephone number.
The Bank initially will have one office located in Camden County and
another located in Brantley County. The Camden County office will be located at
the address of the Bank's principal executive offices, on approximately 1.25
acres, and the Brantley County office will be located at 113 East Cleveland
Street, Nahunta, Georgia 31553, on approximately 1.25 acres.
Satilla will construct the facilities for both Bank offices, each
consisting of two-story brick buildings with 6,000 square feet of office space.
Satilla expects to complete construction 180 to 270 days after this Offering,
and neither Satilla nor the Bank will use any temporary facilities. The
estimated total cost for both offices, including land, construction and
furniture and equipment, will be approximately $2.2 million. The Organizers
believe these facilities will adequately serve the Bank's needs for its first
several years of operation.
EMPLOYEES
Satilla does not intend to have any employees other than its officers:
David L. Knox, Sr., Chairman of the Board of Directors and Chief Marketing
Officer, Rodney E. Bennett, President and Chief Executive Officer, M. Anthony
Ham, Vice President, and Curtis J. Tumlin, II, Secretary and Treasurer (the
"Satilla Officers"). The Organizers expect that the Bank will have approximately
28 full-time employees, including the Satilla Officers in their capacities as
officers of the Bank.
LEGAL PROCEEDINGS
As of the date of this Prospectus, there were no material legal proceedings
to which Satilla or the Bank or any of their properties were subject.
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PROPOSED MARKET
MARKET AREA
The Bank will operate primarily in the Camden/Brantley County area as well
as other surrounding areas, including certain areas of Charlton, Glynn, Pierce,
and Ware Counties in Georgia and Nassau County in Florida. According to the U.S.
Census Bureau, the estimated population of Camden County increased from 31,107
in 1990 to 45,153 in 1997, representing growth of 49.7%. Similarly, the
estimated population of Brantley County increased from 11,077 in 1990 to 13,380
in 1997, representing growth of 20.8%. During the same period, the State of
Georgia's average population grew 15.6%. In 1993, the average income per
household in Camden County and Brantley County was $33,365 and $25,010,
respectively, while the average income per household for the State of Georgia
was $31,149.
Camden County's principal economic components are retail trade, tourism,
timber, manufacturing industries and a military base. Its largest employers
include the Kings Bay Naval Submarine Base, Gilman Paper Company, Camden County
Schools and Lockheed Missiles/Space Company. Camden County benefits from its
proximity to Jacksonville, Florida, which is only thirty miles away. One such
benefit has been the recent influx of residents who work in Jacksonville but
choose to commute from Camden County to avoid the congestion of the Jacksonville
metro area.
Brantley County's principal economic components are the timber and
manufacturing industries. Its largest employers include Okefenokee Rural
Electrical, Douglas Asphalt, Varn Wood Products and Georgia Pacific. Many
residents of Nahunta, Georgia commute to work in Camden and Glynn Counties, as
well as the Waycross, Georgia area.
Gilman Paper Company, which recently completed sales of certain of its
significant assets, may currently be in the process of downsizing and/or winding
up its business. Any such changes by Gilman Paper Company, or any similar
changes by any of the other principal employers in Camden County, Brantley
County or the surrounding areas could negatively affect the local economy and
Satilla's market area.
MARKETING FOCUS
Currently, most banking facilities in the Camden/Brantley County area are
local branches of large regional and national banks with headquarters outside of
the Camden/Brantley County area. Although size gives the larger banks certain
advantages in competing for business from large corporations, including higher
lending limits and the ability to offer services in other areas outside the
Camden/Brantley County area, the Organizers believe that these institutions are
not focused on the consumer, professional and small- to medium-sized business
needs. As a result, the Bank generally will not attempt to compete for the
banking relationships of large corporations, but will concentrate its efforts on
small- to medium-sized businesses and on individuals, especially professionals.
The Bank plans to advertise through various media to emphasize Satilla's
local ownership, community focus and ability to provide more personalized,
flexible service than its competition. The Organizers, as long-time residents
and business people in the Camden/Brantley area, intend to also use their own
personal contacts and connections in the market area, along with those of the
other shareholders, to promote the Bank and to attract customers and business.
COMPETITION
As of March 31, 1999, there was one commercial bank with two offices
operating in Brantley County and there were five commercial banks with 10
branches operating in Camden County. These competitors are well-established in
the Camden/Brantley County area, and Satilla must compete with them for
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customers. Many of these competitors have substantially greater resources and
lending limits, larger branch networks and are able to offer a broader range of
products and services that Satilla and the Bank.
Recent federal legislation permits commercial banks to establish operations
nationwide, which may increase competition from out-of-state financial
institutions. Recent Georgia legislation facilitates the establishment of branch
banks across county lines in Georgia, which may increase competition from other
banks already operating in Georgia. In addition, on-line computer banking via
the Internet and telephone may also become an increasing source of competition
for community financial institutions such as the Bank. As a result of all these
competitive factors, the Bank may initially have to pay higher rates of interest
to attract deposits and charge lower rates of interest on loans to attract
lending business.
PROPOSED BUSINESS
GENERAL
Satilla initially will engage in no business other than owning and managing
the Bank. The Bank will engage in a general commercial and retail banking
business, emphasizing the needs of small- to medium-sized businesses,
professional concerns and individuals. The Bank will accept deposits and
originate residential mortgage loans, home equity loans, consumer installment,
commercial real estate and commercial loans. The Bank intends to supplement its
portfolio of loans with investment securities deemed prudent by its Board of
Directors. Upon regulatory approval, the Bank will seek to attract deposits by
offering a money market deposit account, a checking account, a savings account,
a NOW account and various certificates of deposit products.
DEPOSITS
The Bank intends to offer deposit services that are typically available in
most banks and savings and loan associations, including several types of
checking accounts, NOW accounts, savings accounts and time deposits of various
types, ranging from money market deposit accounts to certificates of deposit.
Interest rates and terms will be tailored to the Bank's principal market area at
rates competitive with the local market. In addition, the Bank intends to offer
certain retirement account services, such as Individual Retirement Accounts
("IRAs"). All deposit accounts will be insured by the FDIC up to the maximum
amount allowed by law. The Bank intends to solicit these accounts from
individuals, businesses, associations, organizations and governmental
authorities.
LENDING ACTIVITIES
The Bank intends to emphasize a range of lending services, including real
estate, commercial and consumer loans. Consumer loans will include both
installment and term loans, and will include loans for automobiles, household
goods, education, boats and general personal expense.
To address the risks inherent in making loans, management will maintain an
allowance for loan losses based on, among other things, an evaluation of the
Bank's loan loss experience, the amount of past due and nonperforming loans,
current and anticipated economic changes and the values of certain loan
collateral. Based upon such factors, management will make various assumptions
and judgments about the ultimate collectibility of the loan portfolio and
provide an allowance for potential loan losses based upon a percentage of the
outstanding balances and for specific loans. However, because there are certain
risks that cannot be precisely quantified, management's judgment of the
allowance is necessarily approximate and imprecise. The adequacy and methodology
of the allowance for loan losses will be subject to
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<PAGE> 15
regulatory examination and compared to a peer group of financial institutions
identified by the regulatory agencies.
Real Estate Loans. The Organizers expect that one of the primary components
of the Bank's loan portfolio will be loans secured by first or second mortgages
on residential and commercial real estate. These loans will generally consist of
commercial real estate loans, construction and development loans and residential
real estate loans (including home equity and second mortgage loans). Interest
rates may be fixed or adjustable and the Bank will generally charge an
origination fee. The Bank will seek to manage credit risk in the commercial real
estate portfolio by emphasizing loans on owner-occupied office and retail
buildings where the loan-to-value ratio, established by independent appraisals,
does not exceed 80%. The Organizers presently anticipate that the loan-to-value
ratio for first and second mortgage loans and for construction loans generally
will not exceed 80% and 75%, respectively. In addition, the Bank may require
personal guarantees of the principal owners of the property. The Bank may also
originate mortgage loans for sale into the secondary market, earning a fee, but
avoiding the interest rate risk of holding long-term, fixed-rate loans.
The principal economic risk associated with all loans, including real
estate loans, is the creditworthiness of the Bank's borrowers. The ability of a
borrower to repay a real estate loan will depend upon a number of economic
factors, including employment levels and fluctuations in the value of real
estate. In the case of a real estate construction loan, there is generally no
income from the underlying property during the construction period, and the
developer's personal obligations under the loan are typically limited. Each of
these factors increases the risk of nonpayment by the borrower. In the case of a
real estate purchase loan, the borrower may unable to repay the loans at the end
of the loan term and may thus be forced to refinance the loan at a higher
interest rate, or, in certain cases, the borrower may default as a result of its
inability to refinance the loan. In either case, the risk of nonpayment by the
borrower is increased.
The Bank will also face additional credit risks to the extent that it
engages in adjustable rate mortgage loans ("ARMs"). In the case of an ARM, as
interest rates increase, the borrower's required payments increase, thus
increasing the potential for default. The marketability of all real estate
loans, including ARMs, is also generally affected by the prevailing level of
interest rates.
Commercial Loans. The Bank will make loans for commercial purposes in
various lines of business. The commercial loans will include both secured and
unsecured loans for working capital (including inventory and receivables), loans
for business expansion (including acquisition of real estate and improvements),
Small Business Administration ("SBA") loans for new businesses (as well as other
governmentally guaranteed business loans) and loans for purchases of equipment
and machinery. The Organizers anticipate that equipment loans will typically be
made for a term of five years or less at either fixed or variable rates, with
the loan fully amortized over the term and secured by the financed equipment.
Working capital loans will typically have terms not exceeding one year and will
usually be secured by accounts receivable, inventory or personal guarantees of
the principals of the business. Commercial loans will vary greatly depending
upon the circumstances and loan terms will be structured on a case-by-case basis
to better serve customer needs.
The risks associated with commercial loans vary with many economic factors,
including the economy in the Camden/Brantley County area. The well-established
banks in the Camden/Brantley County area will make proportionately more loans to
medium- to large-sized businesses than the Bank. Many of the Bank's anticipated
commercial loans will likely be made to small- to medium-sized businesses, which
are typically smaller, have shorter operating histories, and less sophisticated
record keeping systems than larger entities. As a result, these smaller entities
may be less able to withstand adverse competitive, economic and financial
conditions than larger borrowers. In addition, because payments on loans secured
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<PAGE> 16
by commercial property generally depend to a large degree on the results of
operations and management of the properties, repayment of such loans may be
subject, to a greater extent than other loans, to adverse conditions in the real
estate market or the economy.
Consumer Loans. The Bank will make a variety of loans to individuals for
personal and household purposes, including secured and unsecured installment and
term loans, home equity loans and lines of credit and unsecured revolving lines
of credit such as credit cards. The secured installment and term loans to
consumers will generally consist of loans to purchase automobiles, boats,
recreational vehicles, mobile homes and household furnishings, with the
collateral for each loan being the purchased property. The underwriting criteria
for home equity loans and lines of credit will generally be the same as applied
by the Bank when making a first mortgage loan, as described above, and home
equity lines of credit will typically expire 10 years or less after origination,
unless renewed or extended.
Consumer loans generally involve more credit risks than other loans because
of the type and nature of the underlying collateral or because of the absence of
any collateral. Consumer loan repayments are dependent on the borrower's
continuing financial stability and are likely to be adversely affected by job
loss, divorce and illness. Furthermore, the application of various federal and
state laws, including federal and state bankruptcy and insolvency laws, may
limit the amount which can be recovered on such loans in the case of default. In
most cases, any repossessed collateral will not provide an adequate source of
repayment of the outstanding loan balance. Although the underwriting process for
consumer loans includes a comparison of the value of the security, if any, to
the proposed loan amount, the Bank cannot predict the extent to which the
borrower's ability to pay, and the value of the security, will be affected by
prevailing economic and other conditions.
Loan Approval and Review. The 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 an individual officer's lending authority,
the loan request will be considered and approved by an officer with a higher
lending limit or by the Loan Committee of the Board of Directors. The Loan
Committee will set the lending limits for the Bank's loan officers, and any loan
in excess of such lending limits must be approved by the Loan Committee. The
Bank will not make any loans to any director, officer or employee of the Bank
unless the loan is approved by the Bank's Board of Directors, or a committee
thereof, and is made on terms not more favorable to such person than would be
available to a person not affiliated with the Bank.
Lending Limit. Under the Georgia Code, the Bank may not loan to any one
borrower (including the borrower's related interests) an amount that exceeds 15%
of the Bank's statutory capital base unless such loan is approved by the Bank's
Board of Directors and unless the entire amount of the loan is secured by good
collateral or other ample security. In no event, however, may the aggregate
amount loaned to any borrower exceed 25% of the Bank's statutory capital base,
subject to certain exceptions relating to the type and adequacy of the
collateral for such loan. These limits will increase and decrease as the Bank's
statutory capital base increases and decreases. Initially, the Bank's legal
lending limit is estimated to be approximately $500,000 for unsecured loans and
approximately $1,000,000 for secured loans, based upon the completion of the
minimum offering of 460,000 shares.
The Bank likely will not have any internal policy restrictions concerning
loans to one borrower other than the limits imposed by the Georgia Code and
those relating to loans to affiliates. Unless the Bank is able to sell
participations in its loans to other financial institutions, the Bank will not
be able to meet all the lending needs of customers requiring aggregate
extensions of credit above these limits. As a result, the Organizers anticipate
that the Bank will sell some portion of the loans it originates, especially
residential first mortgage loans, in the secondary market, thereby affording the
Bank greater lending ability. See "Supervision and Regulation."
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<PAGE> 17
OTHER BANKING SERVICES
Other anticipated bank services include cash management services, safe
deposit boxes, travelers checks, direct deposits of payroll and social security
checks and automatic drafts for various accounts. The Organizers plan for the
Bank to become associated with a shared network of automated teller machines
("ATMs") that may be used by Bank customers throughout Florida, Georgia and
other regions. The Organizers do not intend for the Bank to exercise any trust
powers during its initial years of operation. The Bank may in the future offer a
full-service trust department, but cannot do so without the prior approval of
the Georgia Department.
PLAN OF OPERATION
PRE-OPENING OPERATIONS
As of March 31, 1999, Satilla had total assets aggregating approximately
$17,179. These assets consisted of cash of $2,179 and other assets of $15,000.
Satilla's total liabilities at this date were $109,548 and consisted of accrued
interest payable of $4,548 and borrowings against Satilla's line of credit with
The Bankers Bank, Atlanta, Georgia (the "Line of Credit") of $105,000. Prior to
this offering, Satilla had no material source of capital other than the Line of
Credit. Satilla had a shareholder's deficit of $92,369 at March 31, 1999.
Satilla had a net loss from July 1, 1998 through March 31, 1999 of
$105,369. This loss resulted from expenses incurred in connection with
activities related to the initial organization of Satilla and the Bank and
includes expenses incurred on behalf of Satilla by the Organizers prior to
Satilla's incorporation date. These activities included, without limitation, the
preparation and filing of various regulatory applications and the preparation
and filing of a registration statement for this Offering.
POST-OFFERING OPERATIONS; LIQUIDITY
Assuming that this Offering is successfully completed, Satilla's initial
activities will be devoted to organizing the Bank and opening and commencing the
business of the Bank. These organizational activities will include completing
all required steps for approval from the Georgia Department and the FDIC for a
Georgia commercial bank, purchasing, constructing, furnishing and equipping the
proposed facilities, hiring qualified personnel to work at the Bank, conducting
public relations activities on behalf of the Bank, developing prospective
business contacts for the Bank and Satilla and taking other actions necessary
for a successful opening of the Bank. Because Satilla is in an organizational
stage, it has had no operations from which to generate any revenues and will not
have any operating revenues until the Bank opens for business.
Because earnings on its assets, if any, are expected to be less than the
expenses incurred in connection with its origination activities and those of the
Bank, Satilla will incur a net loss through the date of the opening of the Bank.
In addition, Satilla anticipates incurring continuing operating losses during
the Bank's early stages of operations. A minimum of $4.5 million of the net
proceeds of this Offering will be used to capitalize the Bank, and the remainder
will be used by Satilla for general corporate purposes, including, without
limitation, future capital contributions to the Bank, if needed. The Organizers
believe that this amount will be sufficient to fund the activities of the Bank
in its initial stages of operation until the Bank can generate sufficient income
from operations to fund its activities on an ongoing basis. In addition, the
Organizers believe that income from the operations of the Bank will be
sufficient to fund the activities of Satilla on an ongoing basis for at least
five years. However, in the event the proceeds of this
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<PAGE> 18
Offering are insufficient to provide the minimum initial funding needed for the
Bank to begin operations, Satilla will have to seek alternative sources of
funding, which may include sales of additional shares of Common Stock.
Once the Bank opens, the largest component of Satilla's net income is
expected to be the Bank's net interest income, which is the difference between
the income earned on assets and interest paid on deposits and borrowings used to
support such assets. Net interest income is influenced by the rates earned on
Satilla's interest-earning assets, the rates paid on its interest-bearing
liabilities, the relative amounts of interest-earning assets and
interest-bearing liabilities, and the maturities and repricing characteristics
of its interest-earning assets and interest bearing liabilities. Because the
Bank may initially have to pay above average rates on deposits and charge below
average rates on loans to attract customers, Satilla's net interest income may
be less during the Bank's initial years of operation than that of its
competitors, until it can rely more upon a historical record of customer service
to attract business.
YEAR 2000 CONSIDERATIONS
The Year 2000 issue is the result of potential problems with computer
systems or any equipment with computer chips that use dates that have been
stored as two digits rather than four (e.g., "99" for 1999). On January 1, 2000,
any clock or date recording mechanism, including date sensitive software, which
uses only two digits to represent the year may recognize a date using "00" as
the year 1900 rather than the year 2000 (the "Year 2000 Problem"). This could
result in system failures or miscalculations causing disruption of operations,
including, among other things, a temporary inability to process transactions,
send invoices or perform similar tasks.
Satilla and the Bank will rely upon computer software and hardware systems
to perform their operations, some of which will be managed internally by Satilla
and the Bank and others that will be provided by third-party vendors. Satilla is
aware of the Year 2000 Problem, and Satilla recognizes that the Year 2000
Problem, if not properly addressed, could have a material adverse effect on
Satilla, the Bank and the Bank's customers. Because Satilla and the Bank have
not yet begun operations, they do not presently have any existing computer
software or hardware to evaluate or fix. However, Satilla intends to evaluate
all hardware and software for Year 2000 compliance before purchasing, licensing,
leasing or contracting any equipment from third parties.
Satilla is currently in the process of reviewing software and hardware
vendors and is considering entering into a contract with The Intercept Group
("Intercept") to use its "PC BancPAC" data processing and item processing
banking systems. Satilla will seek assurances that Intercept's software and
hardware computer systems are, or will be, Year 2000 compliant. Satilla will not
begin operations until it has assurances that its computer software and hardware
systems are, or will be, Year 2000 compliant.
Satilla has not contracted with any independent source to analyze Satilla's
Year 2000 exposure, but believes that its exposure is manageable because it is
aware of the issues and will only use systems that it believes will be Year 2000
compliant. Satilla believes that its costs in addressing the Year 2000 issues
will be nominal since it will not have to replace or fix any existing computer
software programs or hardware.
Satilla has developed a "Year 2000 Project Plan" whereby a "Year 2000
Project Team" will be formed from the Bank's management and staff to address the
Year 2000 Problem. The Year 2000 Project Team is expected to evaluate all
software and hardware systems to determine compliance. After the Bank commences
operations, the Year 2000 Project Team is expected to monitor the Bank's own
systems, if any, and all third-party systems regularly to assess any risks to
Satilla and the Bank and to proactively work with third-party vendors to ensure
all Satilla's and Bank's systems are Year 2000 compliant. The
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Bank intends to actively assess and monitor its Year 2000 exposure created when
it loans money to its customers.
Satilla is also developing a contingency plan in the event that its
computer systems do not properly handle the Year 2000 date change. Under the
plan, Satilla would hire experienced third party vendors to modify, update or
replace any of Satilla's computer systems that are unable to properly handle the
Year 2000 date change.
The Organizers are taking what they believe to be prudent and reasonable
steps to ensure that Satilla's and the Bank's computer systems, as well as those
of their proposed suppliers and customers, are Year 2000 compliant. However, if
such systems do not properly handle the Year 2000 date change, Satilla's and the
Bank's business, financial condition and results of operations could me
materially adversely effected.
THIS OFFERING
GENERAL
Satilla is offering (this "Offering") for sale to the public a minimum of
460,000 shares (the "Minimum Offering") and a maximum of 550,000 shares (the
"Maximum Offering") of its common stock, par value $.01 per share (the "Common
Stock" or the "Shares"), at a purchase price of $10.00 per Share to raise net
proceeds between $4,500,000 and $5,400,000. Subscribers must purchase at least
200 Shares to participate in this Offering, and any subscriptions for less than
200 Shares will be rejected and promptly returned to the subscriber. This
Offering will terminate on _________, 1999 (the "Expiration Date"), unless
extended by Satilla. Satilla will not, however, extend this Offering beyond
______, 1999. Satilla will deposit all of the subscription proceeds in an escrow
account (the "Escrow Account") with its escrow agent, The Bankers Bank, Atlanta,
Georgia (the "Escrow Agent"), pending the satisfaction of certain conditions
prior to the Expiration Date.
Any person desiring to subscribe for Shares in this Offering must deliver
to Satilla before 5:00 P.M. Eastern Time on the Expiration Date a completed
Subscription Agreement and a check for full payment of the subscribed Shares.
Satilla reserves the right, in its sole discretion, to extend this Offering past
the Expiration Date for periods of up to 30 days each, but in no case will
Satilla provide additional notice to investors of any such extension.
CONDITIONS OF THIS OFFERING
This Offering is conditioned upon the satisfaction of the following events
prior to the Expiration Date:
1. Satilla has received and accepted subscriptions accompanied by full
payment in collected funds for at least 460,000 Shares; and
2. By ________, 1999, the Organizers have received, or expect to receive,
as they may determine in their sole discretion, adequate provisions
for satisfying any and all regulatory approvals, and have met, or
expect to meet the other conditions that must be satisfied before
Satilla and the Bank may begin banking operations.
In the event that the foregoing conditions are not each satisfied, Satilla
may, in its discretion, terminate this Offering and promptly return the
subscription proceeds to subscribers. However, Satilla
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reserves the right to terminate this Offering at any time and for any reason
without further notice to investors.
HOW TO SUBSCRIBE
Each person who desires to purchase Common Stock should:
1. Complete, date, and execute the Subscription Agreement to purchase at
least 200 Shares, and also sign the Substitute Form W-9, accompanying
this Prospectus;
2. Make a check payable to "The Bankers Bank, Satilla Escrow Agent" in
the amount of $10.00 for each Share subscribed for in this Offering;
3. Mail or deliver the Subscription Agreement and check to:
Satilla Financial Services, Inc.
180 Mariners Drive
Kingsland, Georgia 31548
Attention: David L. Knox, Sr.
4. Subscription Agreements and checks for the purchase of Common Stock
MUST be received by Satilla prior to 5:00 P.M. Eastern Time on
___________, 1999, unless this date is extended by Satilla in its sole
discretion.
HANDLING OF SUBSCRIPTIONS
Subscriptions are binding upon Satilla only if and to the extent accepted
by Satilla in writing. Satilla reserves the right, in its sole discretion, to
reject any subscription in whole or in part, to allocate Shares among
subscribers, and to withdraw, cancel or modify this Offering without notice.
Satilla will decide which subscriptions to accept within 14 days of receipt of
the completed Subscription Agreement and check. In determining which
subscriptions and oversubscriptions to accept, in whole or part, Satilla may
take into account various factors, including a subscriber's potential to do
business with, or refer customers to, the Bank and the order in which the
subscriptions were received.
In the event Satilla rejects all or a portion of any subscription, Satilla
will promptly refund by mail to the subscriber all or the appropriate portion of
the amount remitted with the subscription, without interest. Upon rejection of a
subscription or the termination or expiration of this Offering, Satilla and its
directors, officers, employees, agents, representatives, and affiliates will
have no further liability to the subscribers whose subscriptions are being
rejected once all appropriate refunds have been mailed to the address shown in
the Subscription Agreement.
Satilla will confirm all sales of Common Stock in writing. Certificates
representing Shares of Common Stock duly subscribed and fully paid will be
issued by Satilla's registrar and transfer agent promptly after Satilla's
acceptance of the subscriptions and the issuance of a confirmation therefor.
ESCROW ACCOUNT
All subscription funds will be deposited in the Escrow Account pending
completion of this Offering. Funds in the Escrow Account may not be reached by
creditors of the Organizers, Satilla or the Bank, and will only be released to
Satilla once this Offering has been successfully completed. If this Offering is
not
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successfully completed, the Escrow Agent will promptly return all subscription
funds plus interest, if any, to subscribers.
PARTICIPATION BY ORGANIZERS; ORGANIZER WARRANTS
The Organizers presently intend to purchase approximately 110,000 shares of
Satilla's Common Stock in this Offering, equal to approximately 21.7% of the
Minimum Offering or 20.0% of the Maximum Offering. The Organizers will purchase
their Shares at a price of $10.00 per Share, the same price at which Shares are
being offered to the public.
In addition to the Common Stock, Satilla is also offering, to the
Organizers only, warrants (the "Organizer Warrants") to purchase an aggregate of
100,000 shares of Satilla's Common Stock. The Organizer Warrants are being
offered to the Organizers to encourage their substantial long-term investment in
Satilla and in exchange for their personal guarantee of the Line of Credit. The
number of Shares to be the subject of each Organizer Warrant will be determined
on a pro rata basis, based upon the number of Shares purchased by such Organizer
in this Offering. For example, assuming that the Organizers purchase an
aggregate of 110,000 Shares in this Offering, an Organizer who purchases 11,000,
or 10%, of such Shares would receive an Organizer Warrant to purchase 10,000, or
10%, of the 100,000 Shares that will be the subject of the Organizer Warrants.
The terms and conditions of each Organizer Warrant are identical. The
Organizers' rights under the Organizer Warrants will become fully vested upon
the later of the termination of this Offering or the opening of the Bank (such
date, the "Vesting Date"), and each Organizer Warrant will become fully
exercisable three years after the date of the Vesting Date at an exercise price
of $10.00 per share. The Organizer Warrants will expire on March 31, 2009. The
Organizer Warrants are non-transferable.
The Organizers may, but are not obligated to, purchase additional Shares if
such purchases are necessary to complete the Minimum Offering, but in no event
will the Organizers receive Organizer Warrants to purchase greater than an
aggregate of 100,000 Shares.
PLAN OF DISTRIBUTION
Offers and sales of the Common Stock will be made on behalf of Satilla by
certain of its officers and directors. The officers and directors will receive
no commissions or other remuneration in connection with such activities, but
they may be reimbursed for any reasonable expenses incurred in connection with
this Offering.
MARKET INFORMATION AND DIVIDENDS
Satilla has not previously issued any of its Common Stock to the public. As
a result, there is no market for the Common Stock and an active trading market
may not develop in the foreseeable future. There are no present plans for the
Common Stock to be listed or qualified for trading on any stock exchange or on
Nasdaq. Satilla presently anticipates seeking at least one independent over the
counter market makers in the Common Stock.. However, there is no assurance that
any party will make a market in the Common Stock now or at any time in the
future, or if any party does become a market maker, that they will continue to
do so.
Because Satilla and the Bank are both start-up operations, it will be the
policy of Satilla's Board of Directors to retain any earnings for the period of
time necessary to ensure the success of their operations.
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The payment of dividends by Satilla in the future will depend substantially upon
the Bank's earnings, if any, and will be subject to legal and regulatory
restrictions applicable to Satilla and the Bank. As a result, Satilla does not
intend to pay dividends in the foreseeable future, and its future dividend
policy will depend on the Bank's earnings, capital requirements, financial
condition and other factors considered relevant by Satilla's Board of Directors.
USE OF PROCEEDS
The estimated net proceeds to Satilla from this Offering are set forth in
the table below:
<TABLE>
<CAPTION>
MINIMUM MAXIMUM
OFFERING OF OFFERING OF
460,000 SHARES 550,000 SHARES
-------------- --------------
<S> <C> <C>
Gross Proceeds from this Offering............................ $4,600,000 $5,500,000
Estimated Offering Expenses.................................. $ 100,000 $ 100,000
---------- ----------
Net Proceeds............................................ $4,500,000 $5,400,000
========== ==========
</TABLE>
Satilla will use $4.5 million of the net proceeds of this offering to
purchase 100% of the capital stock of the Bank, thereby capitalizing the Bank in
satisfaction of regulatory requirements. To the extent that Satilla exceeds the
Minimum Offering, any net proceeds in excess of $4.5 million will be retained by
Satilla for general corporate purposes, including, without limitation, future
capital contributions to the Bank.
Of the $4.5 million of net proceeds that will be contributed to the Bank,
the Bank will use:
- approximately $2.2 million to purchase the land for, construct,
furnish and equip the Bank's Brantley County and Camden County
offices;
- approximately $105,000 to repay the Line of Credit, which has
been used to pay organizational expenses; and
- the remaining approximately $2.2 million for working capital and
for general corporate purposes, including making loans and
investments.
Such amounts may be paid directly by the Bank or indirectly to acquire such
property from Satilla at cost, including repayment of loans and interest
incurred to acquire such properties for the Bank.
Satilla established the Line of Credit on September 30, 1998 to pay certain
organizational, offering and pre-opening expenses of Satilla and the Bank,
including, without limitation, consulting fees for market analysis and
feasibility studies, legal and accounting fees and expenses, filing fees,
printing expenses, marketing costs and costs associated with the preparation of
the Bank's offices. The interest rate on the Line of Credit is a variable
interest rate that is equal to the Prime Rate, as published in the Money Rates
section of The Wall Street Journal. At origination, the interest rate for the
Line of Credit was 8.500%. As of March 31, 1999, the principal balance
outstanding under the Line of Credit was approximately $105,000 and the interest
rate for such amount was 8.500%. The Line of Credit is guaranteed jointly and
severally by the Organizers and matures on September 30, 1999.
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CAPITALIZATION
The table below sets forth the capitalization of Satilla on March 31, 1999:
- on an actual basis, and
- on an as adjusted basis to reflect the sale of the Common Stock
offered by this Prospectus and the application of the net
proceeds therefrom as set forth herein under "Use of Proceeds."
This table should be read in conjunction with "Use of Proceeds," "Plan
of Operation" and the Financial Statements and Notes thereto included elsewhere
in this Prospectus.
<TABLE>
<CAPTION>
MARCH 31, 1999
----------------------------------------------
AS ADJUSTED
---------------------------------
MINIMUM MAXIMUM
OFFERING OF OFFERING OF
ACTUAL 460,000 SHARES 550,000 SHARES
--------- -------------- --------------
<S> <C> <C> <C>
Indebtedness under Satilla's Line of Credit............... $(105,000) -- --
========= =========== ===========
Common Stock, par value $.01 per share, 2,000,000
shares authorized, 1,300 shares outstanding; 461,300
(Minimum Offering) and 551,300 (Maximum Offering)
shares outstanding (1)(2).............................. $ 13 $ 4,613 $ 5,513
Preferred Stock, par value $.01 per share, 500,000 shares
authorized; no shares issued or outstanding ........... -- -- --
Additional paid-in capital ............................... 12,987 4,508,387 5,407,487
Deficit accumulated during the pre-opening and development
stage ................................................. (105,369) (105,369) (105,369)
--------- ----------- -----------
Total shareholders' equity (Deficit) ..................... $ (92,369) $ 4,407,631 $ 5,307,631
========= =========== ===========
</TABLE>
- -----------------
(1) Includes 1,300 Shares that were issued, at the same price as the initial
offering price, to the Organizers as of December 30, 1998 in exchange for
their initial capital contribution, but excludes an aggregate of 100,000
Shares that will be subject to the Organizer Warrants.
(2) Does not include 100,000 shares of Common Stock issuable under the
Organizer Warrants.
21
<PAGE> 24
SUPERVISION AND REGULATION
Bank holding companies and banks are extensively regulated under both
federal and state law. The following discussion summarizes certain statutes,
rules and regulations affecting Satilla and the Bank. This summary is qualified
in its entirety by reference to the statutory and regulatory provisions referred
to below and elsewhere herein and is not intended to be an exhaustive
description of the statutes or regulations applicable to Satilla's and the
Bank's businesses. Any change in the applicable law or regulations may have a
material effect on the business of Satilla and the Bank. Supervision, regulation
and examination of banks by the bank regulatory agencies are intended primarily
for the protection of depositors rather than holders of Satilla's Common Stock.
BANK HOLDING COMPANY REGULATION
General. Satilla will be a bank holding company within the meaning of the
Bank Holding Company Act of 1956, as amended (the "BHC Act"). As a bank holding
company registered with the Federal Reserve under the BHC Act and with the
Georgia Department under the Georgia Code, Satilla will be subject to
supervision, examination and reporting by the Federal Reserve and the Georgia
Department. Satilla's activities will be limited to banking, managing or
controlling banks, furnishing services to or performing services for its
subsidiaries, or engaging in any other activity that the Federal Reserve
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto.
Satilla will be required to file with the Federal Reserve its periodic
reports and such additional information as the Federal Reserve may require. The
Federal Reserve will regularly examine Satilla and may examine its subsidiaries
including the Bank. The Georgia Department also may examine Satilla.
Investment Activities. The BHC Act requires prior Federal Reserve approval
for, among other things, the acquisition by a bank holding company of direct or
indirect ownership or control of more than 5% of the voting shares or
substantially all of the assets of any bank, or for a merger or consolidation of
a bank holding company with another bank holding company. A bank holding company
may acquire direct or indirect ownership or control of voting shares of any
company that is engaged directly or indirectly in banking or managing or
controlling banks or performing services for its authorized subsidiaries. A bank
holding company may, however, engage in or acquire an interest in a company that
engages in activities which the Federal Reserve has determined by regulation or
order to be so closely related to banking as to be a proper incident thereto.
Under the BHC Act, Satilla will be generally prohibited from engaging in,
or acquiring direct or indirect control of more than 5% of the voting shares of
any company engaged in non-banking activities, unless the Federal Reserve, by
order or regulation, has found those activities to be so closely related to
banking or managing or controlling banks as to be a proper incident thereto.
Some of the activities that the Federal Reserve has determined by regulation to
be proper incidents to the business of banking include making or servicing loans
and certain types of leases, engaging in certain insurance and discount
brokerage activities, performing certain data processing services, acting in
certain circumstances as a fiduciary or investment or financial advisor, owning
savings associations, and making investments in certain corporations or projects
designed primarily to promote community welfare.
In addition, and subject to certain exceptions, the BHC Act and the Change
in Bank Control Act, together with regulations thereunder, require Federal
Reserve approval (or, depending on the circumstances, no notice of disapproval)
prior to any person or company acquiring "control" of a bank holding company.
Control is conclusively presumed to exist if an individual or company acquires
25% or more of any class of voting securities of the bank holding company.
22
<PAGE> 25
The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), repealed the prior statutory restrictions on
interstate acquisitions of banks by bank holding companies, such that any bank
holding company located in the State of Georgia may acquire a bank located in
any other state, and any bank holding company located outside Georgia may
lawfully acquire any bank based in another state, regardless of state law to the
contrary, in either case subject to certain deposit-percentage, aging
requirements, and other restrictions. The Interstate Banking Act also generally
provides that national and state-chartered banks may branch interstate through
acquisitions of banks in other states. By adopting legislation prior to that
date, a state has the ability either to "opt in" and accelerate the date after
which interstate branching is permissible or "opt out" and prohibit interstate
branching altogether. In March 1996, the Georgia legislature adopted legislation
opting into interstate branching effective June 1, 1997.
The Economic Growth and Regulatory Paperwork Reduction Act of 1996
("EGRPRA") streamlined the non-banking activities application process for
well-capitalized and well-managed bank holding companies. Under EGRPRA,
qualified bank holding companies may commence a regulatory approved non-banking
activity without prior notice to the Federal Reserve; written notice is required
within 10 days after commencing the activity. Under EGRPRA, the prior notice
period is reduced to 12 days in the event of any non-banking acquisition or
share purchase or de novo non-banking activity previously approved by order of
the Federal Reserve, but not yet implemented by regulations, assuming the size
of the acquisition or proposed activity does not exceed 10% of risk-weighted
assets of the acquiring bank holding company and the consideration does not
exceed 15% of Tier 1 Capital.
In 1997, the Federal Reserve adopted amendments to its Regulation Y
implementing certain provisions of EGRPRA. Among other things, these amendments
to Federal Reserve Regulation Y reduce the notice and application requirements
applicable to bank and non-bank acquisitions and de novo expansion by
well-capitalized and well managed holding companies; expand the list of
non-banking activities permitted under Regulation Y and reduce certain
limitations on previously permitted activities; and amend Federal Reserve
anti-tying restrictions to allow banks greater flexibility to package products
with their affiliates.
Source of Financial Strength. Federal Reserve policy requires a bank
holding company to act as a source of financial strength and to take measures to
preserve and protect bank subsidiaries in situations where additional
investments in a troubled bank may not otherwise be warranted. In addition,
under the Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), where a bank holding company has more than one bank or thrift
subsidiary, each of the bank holding company's subsidiary depository
institutions are responsible for any losses to the FDIC as a result of an
affiliated depository institution's failure. As a result, a bank holding company
may be required to loan money to its subsidiaries in the form of capital notes
or other instruments which qualify as capital under regulatory rules. However,
any loans from the holding company to such subsidiary banks will likely be
unsecured and subordinated to such bank's depositors and perhaps to other
creditors of the bank.
Georgia Department. Satilla will also be regulated by the Georgia
Department. The Georgia Code requires annual registration with the Georgia
Department by all Georgia bank holding companies. Such registration includes
information with respect to the financial condition, operations and management
of intercompany relationships of the bank holding company and its subsidiaries
and related matters. The Georgia Department may also require such other
information as is necessary to keep itself informed as to whether the provisions
of Georgia law and the regulations and orders issued thereunder by the Georgia
Department have been complied with. The Georgia Code also requires prior Georgia
Department approval for the acquisition by a bank holding company of direct or
indirect ownership or control of more than 5% of the voting shares or
substantially all of the assets of any bank, for a merger or consolidation of
23
<PAGE> 26
a bank holding company with another bank holding company, or for other similar
investment activities regulated by the BHC Act.
BANK REGULATION
General. As a Georgia bank whose deposits are insured by the FDIC's Bank
Insurance Fund ("BIF") maintained by the FDIC, the Bank will be subject to
regulation and examination by the Georgia Department and by its primary federal
regulator, the FDIC. The Georgia Department and the FDIC will regulate and
monitor all of the Bank's operations, including reserves, loans, mortgages,
payments of dividends, interest rates and the establishment of branches.
Interest and certain other charges collected or contracted for by the Bank will
be subject to state usury laws and certain federal laws concerning interest
rates.
Under the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), all insured institutions must undergo regular on-site examination by
their appropriate banking agency. The cost of examinations of insured depository
institutions and any affiliates may be assessed by the appropriate agency
against each institution or affiliate as it deems necessary or appropriate.
Insured institutions are required to submit annual reports to the FDIC and the
appropriate banking agency (and state supervisor when applicable). FDICIA also
directs the FDIC to develop with other appropriate agencies a method for insured
depository institutions to provide supplemental disclosure of the estimated fair
market value of assets and liabilities, to the extent feasible and practicable,
in any balance sheet, financial statement, report of condition or any other
report of any insured depository institution. FDICIA also requires the federal
banking regulatory agencies to prescribe, by regulation, standards for all
insured depository institutions and depository institution holding companies
relating, among other things, to:
- internal controls, information systems, and audit systems;
- loan documentation;
- credit underwriting;
- interest rate risk exposure; and
- asset quality.
Transactions With Affiliates and Insiders. The Bank will be subject to the
provisions of Section 23A of the Federal Reserve Act, which place limits on the
amount of loans or extensions of credit to, or investments in, or certain other
transactions with, affiliates and on the amount of advances to third parties
collateralized by the securities or obligations of affiliates. In addition, most
of these loans and certain other transactions must be secured in prescribed
amounts. The Bank will also be subject to the provisions of Section 23B of the
Federal Reserve Act that, among other things, prohibit an institution from
engaging in certain transactions with certain affiliates unless the transactions
are on terms substantially the same, or at least as favorable to such
institution or its subsidiaries, as those prevailing at the time for comparable
transactions with non-affiliated companies. The Bank will be subject to certain
restrictions on extensions of credit to executive officers, directors, certain
principal stockholders, and their related interests. Such extensions of credit:
- must be made on substantially the same terms, including interest
rates and collateral, as those prevailing at the time for
comparable transactions with third parties, and
- must not involve more than the normal risk of repayment or
present other unfavorable features.
24
<PAGE> 27
Branching. Our Organizers intend for the Bank to initially consist of two
offices, one in Camden County and one in Brantley County. All intra-state
branching restrictions have been removed as of July 30, 1998 pursuant to recent
Georgia legislation, and statewide banking is now permissible. Although the Bank
currently has no definitive plans for opening any other offices, depending on
profitability and community needs, other offices may be considered. Satilla,
with prior regulatory approval, will be permitted to acquire interest in and
operate banks throughout the State of Georgia. Under Georgia law, any bank
acquired by Satilla could be merged into the Bank and its offices could then be
operated as branch offices of the Bank. There are currently no plans for Satilla
to make any such acquisition.
Other Regulations. Interest and certain other charges collected or
contracted for by the Bank will be subject to state usury laws and certain
federal laws concerning interest rates. The Bank's loan operations will also be
subject to certain federal laws applicable to credit transactions, such as the
federal Truth-In-Lending Act governing disclosures of credit terms to consumer
borrowers, the Home Mortgage Disclosure Act of 1975 requiring financial
institutions to provide information to enable the public and public officials to
determine whether a financial institution is fulfilling its obligation to help
meet the housing needs of the community it serves, the Equal Credit Opportunity
Act prohibiting discrimination on the basis of race, creed or other prohibited
factors in extending credit, the Fair Credit Reporting Act of 1978 governing the
use and provision of information to credit reporting agencies, the Fair Debt
Collection Act governing the manner in which consumer debts may be collected by
collection agencies, and the rules and regulations of the various federal
agencies charged with the responsibility of implementing such federal laws. The
deposit operations of the Bank will also be subject to the Right to Financial
Privacy Act, which imposes a duty to maintain confidentiality of consumer
financial records and prescribes procedures for complying with administrative
subpoenas of financial records, and the Electronic Funds Transfer Act and
Regulation E issued by the Federal Reserve Board to implement that act, which
governs automatic deposits to and withdrawals from deposit accounts and
customers' rights and liabilities arising from the use of automated teller
machines and other electronic banking services.
ENFORCEMENT POLICIES AND ACTIONS
FIRREA and subsequent federal legislation significantly increased the
enforcement authorities of the FDIC and other federal depository institution
regulators, and authorizes the imposition of civil money penalties up to $1
million per day. Persons who are affiliated with depository institutions can be
removed from any office held in such institution and banned for life from
participating in the affairs of any such institution. The banking regulators
have not hesitated to use the new enforcement authorities provided under FIRREA.
DIVIDENDS
The principal source of Satilla's cash revenues will come from dividends
received from the Bank. The amount of dividends that may be paid by the Bank to
Satilla depends on the Bank's earnings and capital position and will be limited
by federal and state law, regulations, and policies. In addition, the Federal
Reserve has stated that bank holding companies should refrain from or limit
dividend increases or reduce or eliminate dividends under circumstances in which
the bank holding company fails to meet minimum capital requirements or in which
its earnings are impaired.
Cash dividends on the Bank's common stock may be declared and paid only out
of its retained earnings, and dividends may not be declared at any time at which
the Bank's paid-in capital and appropriated retained earnings do not, in
combination, equal at least 20% of its capital stock account. In addition, the
Georgia Department's current rules and regulations require prior Georgia
Department approval before cash dividends may be declared and paid if:
25
<PAGE> 28
- the Bank's ratio of tier 1 equity capital to adjusted total
assets is less than 6%;
- the aggregate amount of dividends declared or anticipated to be
declared in that calendar year exceeds 50% of the Bank's net
profits, after taxes but before dividends, for the previous
calendar year; or
- the percentage of the Bank's assets classified as adverse as to
repayment or recovery by the Georgia Department at the most
recent examination of the Bank exceeds 80% of the Bank's tier 1
equity capital and the allowance for a loan and lease losses as
reflected at such examination.
Under FDICIA, the Bank may not pay a cash dividend if, after paying the
dividend, the Bank would be undercapitalized. See "--Capital Regulations."
CAPITAL REGULATIONS
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, account for off-balance sheet exposure,
and minimize disincentives for holding liquid assets. 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 ratios well in excess of the minimums. The
current guidelines require all bank holding companies with consolidated assets
in excess of $150 million 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 stockholders equity, qualifying
perpetual preferred stock, and minority interest 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 stock not included in Tier 1 capital, mandatory
convertible securities, hybrid capital instruments, subordinated debt and
intermediate term preferred stock, and general reserves for loan and lease
losses up to 1.25% of risk-weighted assets. Small bank holding companies with
less than $150 million in consolidated assets are not separately evaluated from
their bank subsidiaries for purposes of determining capital adequacy, and only
the subsidiary bank's capital is considered.
Under these guidelines, banks' and bank holding companies' assets are given
risk-weights of 0%, 20%, 50%, or 100%. In addition, certain off-balance sheet
items are given credit conversion factors to convert them to asset equivalent
amounts to which an appropriate risk-weight will apply. These computations
result in the total risk-weighted assets. Most loans are assigned to the 100%
risk category, except for first mortgage loans fully secured by residential
property and, under certain circumstances, residential construction loans, both
of which carry a 50% rating. Most investment securities are assigned to the 20%
category, except for municipal or state revenue bonds, which have a 50% rating,
and direct obligations of or obligations guaranteed by the United States
Treasury or United States Government agencies, which have a 0% rating.
The federal bank regulatory authorities have also implemented a leverage
ratio, which is Tier 1 capital as a percentage of average total assets less
intangibles, to be used as a supplement to the risk-based guidelines. The
principal objective of the leverage ratio is to place a constraint on the
maximum degree to which a bank holding company may leverage its equity capital
base. The minimum required leverage ratio for top-rated institutions is 3%, but
most institutions are required to maintain an additional cushion of at least 100
to 200 basis points greater.
26
<PAGE> 29
FDICIA established a capital-based regulatory scheme designed to promote
early intervention for troubled banks and requires the FDIC to choose the least
expensive resolution of bank failures. The new capital-based regulatory
framework contains five categories of compliance with regulatory capital
requirements, including "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." To qualify as a "well capitalized" institution, a bank must
have a leverage ratio of no less than 5%, a Tier 1 risk-based ratio of no less
than 6%, and a total risk-based capital ratio of no less than 10%, and the bank
must not be under any order or directive from the appropriate regulatory agency
to meet and maintain a specific capital level.
Under the FDICIA regulations, the applicable agency can treat an
institution as if it were in the next lower category if the agency determines
(after notice and an opportunity for hearing) that the institution is in an
unsafe or unsound condition or is engaging in an unsafe or unsound practice. 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 a 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 Satilla in several ways. Rapid growth, poor loan portfolio
performance, or poor earnings performance, or a combination of these factors,
could change Satilla's capital position in a relatively short period of time,
making an additional capital infusion necessary.
FDICIA requires the federal banking regulators to revise the risk-based
capital standards to provide for explicit consideration of interest-rate risk,
concentration of credit risk, and the risks of non-traditional activities. It is
uncertain what effect these regulations, when implemented, would have on Satilla
and the Bank.
FDICIA
FDICIA directs that each federal banking regulatory agency prescribe
standards for depository institutions and depository institution holding
companies relating to internal controls, information systems, internal audit
systems, loan documentation, credit underwriting, interest rate exposure, asset
growth, compensation, a maximum ratio of classified assets to capital, minimum
earnings sufficient to absorb losses, a minimum ratio of market value to book
value for publicly traded shares, and such other standards as the agency deems
appropriate. These standards are not expected to have any material effect on
Satilla and the Bank.
FDICIA also contains a variety of other provisions that may affect the
operations of Satilla and the Bank, including new reporting requirements,
regulatory standards for estate lending, "truth in savings" provisions, the
requirement that a depository institution give 90 days' prior notice to
customers and regulatory authorities before closing any branch, and a
prohibition on the acceptance or renewal of brokered deposits by depository
institutions that are not well capitalized or are adequately capitalized and
27
<PAGE> 30
have not received a waiver from the FDIC. Under regulations relating to brokered
deposits, it is presently anticipated that the Bank will initially be well
capitalized and not restricted.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to growth
limitations and are required to submit a capital restoration plan for approval.
For a capital restoration plan to be acceptable, the depository institution's
parent holding company must guarantee that the institution comply with such
capital restoration plan. The aggregate liability of the parent holding company
is limited to the lesser of 5% of the depository institution's total assets at
the time it became undercapitalized and the amount necessary to bring the
institution into compliance with applicable capital standards. If a depository
institution fails to submit an acceptable plan, it is treated as if it is
significantly undercapitalized. If the controlling holding company fails to
fulfill its obligations under FDICIA and files (or has filed against it) a
petition under the federal Bankruptcy Code, the claim would be entitled to a
priority in such bankruptcy proceeding over third party creditors of the bank
holding company.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets, and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized institutions are subject to the appointment of a
receiver or conservator.
FDIC INSURANCE ASSESSMENTS
The Bank will be subject to FDIC deposit insurance assessments. The Bank's
deposits will be primarily insured by the FDIC BIF. The FDIC utilizes a
risk-based deposit insurance premium scheme to determine the assessment rates
for BIF-insured depository institutions. Each financial institution is assigned
to one of three capital groups -- well capitalized, adequately capitalized or
undercapitalized -- and further assigned to one of three subgroups within a
capital group, on the basis of supervisory evaluations by the institution's
primary federal and, if applicable, state regulators and other information
relevant to the institution's financial condition and the risk posed to the
applicable insurance fund. The actual assessment rate applicable to a particular
institution will, therefore, depend in part upon the risk assessment
classification so assigned to the institution by the FDIC. The FDIC is presently
considering whether to charge deposit insurance premiums based upon management
weaknesses and whether the bank's underwriting practices, concentrations of risk
and growth are undisciplined or outside industry norms.
BIF assessment rates currently range from 0 basis points on deposits for a
financial institution in the highest category to 27 basis points on deposits for
an institution in the lowest category, but may be as high as 31 basis points. In
addition, the Deposit Insurance Funds Act of 1996 (the "Funds Act") authorized
the FDIC to collect FICO deposit assessments on BIF-assessable deposits, which
for June 30, 1998, such assessment was 1.22 basis points for BIF insured banks.
COMMUNITY REINVESTMENT ACT
Satilla and the Bank will be subject to the provisions of the Community
Reinvestment Act of 1977, as amended (the "CRA"), and the federal banking
agencies' regulations thereunder. Under the CRA, all banks and thrifts have a
continuing and affirmative obligation, consistent with its safe and sound
operation to help meet the credit needs for their entire communities, 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 CRA requires a
28
<PAGE> 31
depository institution's primary federal regulator, in connection with its
examination of the institution, to assess the institution's record in assessing
and meeting the credit needs of the community served by that institution,
including low- and moderate-income neighborhoods. The regulatory agency's
assessment of the institution's record is made available to the public. Further,
such assessment is required of any institution which has applied to:
- charter a national bank;
- obtain deposit insurance coverage for a newly-chartered
institution;
- establish a new branch office that accepts 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 records
of each subsidiary depository institution of the applicant bank holding company,
and such records may be the basis for denying the application.
Under CRA regulations, an evaluation system rates institutions based on
their actual performance in meeting community credit needs. The evaluation
system used to judge an institution's CRA performance consists of three tests: a
lending test; an investment test; and a service test. Each of these tests will
be applied by the institution's primary federal regulator taking into account
such factors as:
- demographic data about the community;
- the institution's capacity and constraints;
- the institution's product offerings and business strategy; and
- data on the prior performance of the institution and
similarly-situated lenders.
The new lending test, the most important of the three tests for all
institutions other than wholesale and limited purpose (e.g., credit card) banks,
will evaluate an institution's lending activities as measured by its home
mortgage loans, small business and farm loans, community development loans, and,
at the option of the institution, its consumer loans.
Institutions having total assets of less than $250 million, such as the
Bank, will be evaluated under more streamlined criteria. In addition, a
financial institution will have the option of having its CRA performance
evaluated based on a strategic plan of up to five years in length that it had
developed in cooperation with local community groups. In order to be rated under
a strategic plan, the institution will be required to obtain the prior approval
of its federal regulator.
The interagency CRA regulations provide that an institution evaluated under
a given test will receive one of five ratings for that test: outstanding, high
satisfactory, low satisfactory, needs to improve, or substantial non-compliance.
An institution will receive a certain number of points for its rating on each
test, and the points are combined to produce an overall composite rating of
either outstanding, satisfactory, needs to improve, or substantial
noncompliance. Under the agencies' rating guidelines, an institution that
receives an "outstanding" rating on the lending test will receive an overall
rating of at least "satisfactory", and no institution can receive an overall
rating of "satisfactory" unless it receives a rating of at least "low
satisfactory" on its lending test. In addition, evidence of discriminatory or
other illegal credit practices would adversely affect an institution's overall
rating. Under the new regulations, an institution's CRA rating would continue to
be taken into account by its primary federal regulator in considering various
types of applications.
29
<PAGE> 32
FISCAL AND MONETARY POLICY
Banking is a business which depends on interest rate differentials. In
general, the difference between the interest paid by a bank on its deposits and
its other borrowings, and the interest received by a bank on its loans and
securities holdings, constitutes the major portion of a bank's earnings. Thus,
the earnings and growth of Satilla and the Bank will be subject to the influence
of economic conditions generally, both domestic and foreign, and also to the
monetary and fiscal policies of the United States and its agencies, particularly
the Federal Reserve. The Federal Reserve regulates the supply of money through
various means, including open market dealings in United States government
securities, the discount rate at which banks may borrow from the Federal
Reserve, and the reserve requirements on deposits.
The monetary policies of the Federal Reserve historically have had a
significant effect on the operating results of commercial banks and will
continue to do so in the future. The conditions in the national and
international economies and money markets, as well as the actions and changes in
policy by monetary and fiscal authorities, and their effect on Satilla and the
Bank cannot be predicted.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF SATILLA AND THE BANK
The following table sets forth, as of March 31, 1999, the name and age of
each executive officer and director of Satilla, as well as their positions with
Satilla since its inception and their proposed positions with the Bank upon its
inception:
<TABLE>
<CAPTION>
NAME AGE POSITIONS WITH SATILLA PROPOSED POSITIONS WITH BANK
- ---- --- ---------------------- ----------------------------
<S> <C> <C> <C>
David L. Knox, Sr. 49 Organizer, Chairman of the Board of Chairman of the Board of Directors
Directors and Chief Marketing Officer and Chief Marketing Officer
Rodney E. Bennett 58 Organizer, President, Chief Executive President, Chief Executive
Officer and Director Officer and Director
M. Anthony Ham 46 Organizer, Vice President Vice President and Director
and Director
Curtis J. Tumlin, II 28 Organizer, Secretary, Director
Treasurer and Director
Robert T. Baird 42 Organizer and Director Director
Walter A. Bennett 54 Organizer and Director Director
Richard L. Brandon 53 Organizer and Director Director
Cecily A. Hill 56 Organizer and Director Director
Wayne E. Knox 48 Organizer and Director Director
Sheila A. Meadows 43 Organizer and Director Director
Bill F. Raulerson 37 Organizer and Director Director
Steve E. Rawl 52 Organizer and Director Director
</TABLE>
30
<PAGE> 33
ADDITIONAL INFORMATION REGARDING SATILLA'S DIRECTORS AND EXECUTIVE OFFICERS
David L. Knox, Sr. Mr. Knox, a resident of Camden County for 22 years, has
been the President and Chief Executive Officer of The Knox Realty Company, a
real estate holdings company located in Kingsland, Georgia, since 1991. Mr. Knox
has also been the Managing Partner of D&W Partnership, a partnership in
Kingsland, Georgia that purchases, sells, develops and leases real property,
since 1983. From 1977 to 1991, Mr. Knox was the President, Chief Executive
Officer and a Director of Citizens State Bank, a community bank located in
Kingsland, Georgia. Mr. Knox has over 28 years of experience in the banking
industry.
Rodney E. Bennett. Mr. Bennett, a resident of Charlton County for 24 years,
has been a consultant with Bennett Management Corporation, a bank management
consulting corporation in Brunswick, Georgia, since 1991. Mr. Bennett has been
the Vice President of BMC Mortgage Services, a mortgage service corporation in
Brunswick, Georgia, since 1992, and a Director of Georgia Sweet Carrots, Inc., a
wholesale distributor of carrots and other fresh produce in Alma, Georgia, since
1997. In addition, Mr. Bennett has been a partner with Bennett-Miller, a real
estate partnership in Brunswick, Georgia, since 1995.
Mr. Bennett has over 30 years of experience in the banking industry. Mr.
Bennett was formerly a Division President of the First Georgia Savings Bank from
1987 to 1991, when he resigned to form Bennett Management Corporation. Mr.
Bennett was the Chief Executive Officer of the First National Bank of Folkston
from 1975 to 1986, at which point the First National Bank of Folkston was merged
with and into Bank South. Following the merger, Mr. Bennett was an Executive
Vice President and a Branch Manager for Bank South until 1987. Mr. Bennett was
also a Cashier with the First National Bank of Alma from 1972 to 1975, and an
Assistant Vice President of the First National Bank of Brunswick from 1958 to
1972.
M. Anthony Ham. Mr. Ham, a lifetime resident of Brantley County, has been a
Clerk of the Superior Court of Brantley County since 1989. Prior to such
employment, Mr. Ham was an Assistant Vice President and Loan Officer with
Citizens Bank, a community bank in Nahunta, Georgia, from 1971 to 1988. Mr. Ham
has also served as a Director of The Okefenokee Rural Electric Membership
Cooperative, an electric power distributor in Nahunta, Georgia, since 1994, and
The Oglethorpe Power Corporation, an electric power generating and distribution
company in Nahunta, Georgia, since 1996.
Curtis J. Tumlin, II. Mr. Tumlin, a lifetime resident of Brantley County,
has been a Financial Counselor for Satilla Health Services, a hospital in
Waycross, Georgia, since 1996. Mr. Tumlin was formerly a Teller at the Atlantic
Coast Federal Credit Union, a credit union in Waycross, Georgia, from 1994 to
1996 and a Property Appraiser for the Bulloch County Tax Assessors for several
months during 1994. Mr. Tumlin graduated from Georgia Southern University in
1993, where he received a BBA degree. Mr. Tumlin has over 2 years of experience
in the banking industry.
Robert T. Baird. Dr. Baird, a resident of Camden County for 17 years, has
been a dentist in Woodbine, Georgia, since 1982. Dr. Baird graduated from the
Georgia Institute of Technology in 1978, where he was awarded a Bachelor of
Sciences in Chemistry, and from the Emory University School of Dentistry in
1982, where he received a Doctor in Dental Science degree.
Walter A. Bennett. Mr. Bennett, a resident of Nassau, Florida for 20 years,
has been the owner and President of Bennett Chrysler Dodge Jeep, an automobile
dealership in Kingsland, Georgia, since April 1998, and the owner and General
Manager of Bennett Chevrolet, Buick, Oldsmobile, an automobile
31
<PAGE> 34
dealership in Kingsland, Georgia, since 1987. Prior to joining these
dealerships, Mr. Bennett was a Dealer Coordinator and Factory Representative
with General Motors from 1969 to 1987.
Richard L. Brandon. Dr. Brandon, a resident of Camden County for 25 years,
has been a physician in St. Marys, Georgia, since 1974. Dr. Brandon graduated
from the University of Georgia in 1971, where he was awarded a Bachelor of
Science in Chemistry, and from the Medical College of Georgia, where he received
a Doctor of Medicine degree.
Dr. Brandon has been the President of the Camden Women's Center, a
physician's center in St. Marys, Georgia, since January 1998. .Dr. Brandon also
has been the sole owner of the Amelia Wellness Center, a real estate rental
company in Nassau, Florida, since 1988, and the AWC Food Servicer, Inc., a real
estate rental company in Nassau, Florida, since 1995.
Cecily A. Hill. Ms. Hill, a lifetime resident of Camden County, has been
the owner and Manager of Prudential Magnolia Realty, a real estate brokerage
company in Kingsland, Georgia, since 1987. Ms. Hill is a licensed real estate
agent.
Wayne E. Knox. Mr. Knox, a resident of Glynn County for 24 years, has been
a pipefitter at the Georgia Pacific plant in Brunswick, Georgia since 1973. Mr.
Knox has been a partner in D&W Partnership, a partnership in Kingsland, Georgia
that purchases, sells, develops and leases real property, since 1983, and a
partner in Waybo, a real estate rental partnership in Brunswick, Georgia, since
1993.
Sheila A. Meadows. Ms. Meadows, a resident of Camden County for ten years,
has been an owner, Associate Broker and Rental Manager of Prudential Magnolia
Realty, a real estate brokerage company in Kingsland, Georgia, since 1990. Prior
to joining Prudential, Ms. Meadows was a Teller with Portsmouth Naval Shipyard
Credit Union, a credit union in Portsmouth, Virginia, from 1984 to 1985. Ms.
Meadows is a licensed real estate agent.
Bill F. Raulerson. Mr. Raulerson, a resident of Pierce County, has been the
President and General Manager of Lewis & Raulerson, Inc., a wholesale petroleum
and natural gas supplier and operator of gasoline convenience stores located in
Waycross, Georgia, since 1984. Mr. Raulerson has also been the Vice President
and a Director of Friendly Express, Inc., a convenience store chain
headquartered in Waycross, Georgia, since 1989.
Steve E. Rawl. Mr. Rawl, a lifetime resident of Camden County, has been the
sole owner and operator of Steve E. Rawl, Inc., a retail store in Waverly,
Georgia, since 1969. Mr. Rawl has been a partner of Simon Lake Property, Inc., a
real estate development company in Woodbine, Georgia, since 1979, and South East
Non Destructive Testing Laboratory, a real estate development company in
Woodbine, Georgia, since 1982. Mr. Rawl has also been a Director of The Georgia
Transmission Company, an electric transmission company in Atlanta, Georgia, and
a Director of The Okefenokee Rural Electric Membership Cooperative, an electric
power generating and distribution company in Nahunta, Georgia, since 1992. Mr.
Rawl was an Advisor Director of The First National Bank, a commercial bank in
St. Marys, Georgia, from 1994 to 1998, when he resigned to organize Satilla.
David L. Knox, Sr. is the brother of Wayne E. Knox. No other director or
executive officer of Satilla or the Bank is related to any other director or
executive officer.
32
<PAGE> 35
PRINCIPAL SHAREHOLDERS
SHARE SUBSCRIPTIONS
The following table sets forth certain information regarding the number of
Shares of Satilla's Common Stock for which each Organizer, director and
executive officer of Satilla intends to subscribe and the aggregate number of
the Shares intended to be subscribed for by all of Satilla's Organizers,
directors and executive officers as a group. Subject to prior regulatory
approval, Satilla's Organizers, directors and executive officers may elect to
purchase more than the Shares indicated below.
<TABLE>
<CAPTION>
ANTICIPATED SHARE OWNERSHIP AFTER THIS OFFERING
-----------------------------------------------------------------------
NUMBER OF SHARES TO PERCENTAGE OF PERCENTAGE OF
NAME AND ADDRESS BE SUBSCRIBED MINIMUM OFFERING MAXIMUM OFFERING
- ----------------------------------- ---------------------- --------------------- --------------------
<S> <C> <C> <C>
David L. Knox, Sr.
712 Cinnamon Fern Trail
St. Marys, Georgia 31558 15,000 3.26% 2.72%
Rodney E. Bennett
Route 3, Box 3536
Folkston, Georgia 31357 10,000 2.17% 1.81%
M. Anthony Ham
P.O. Box 342
Nahunta, Georgia 31553 5,000 1.09% 0.91%
Curtis J. Tumlin, II
P.O. Box 452
Nahunta, Georgia 31553 5,000 1.09% 0.91%
Robert T. Baird
116 Temple Terrace Road
Woodbine, Georgia 31569 5,000 1.09% 0.91%
Walter A. Bennett
1739 Regatta Drive
Amelia Island, Florida 32034 10,000 2.17% 1.81%
Richard L. Brandon
522 Cardinal Circle East
St. Marys, Georgia 31558 20,000 4.35% 3.64%
Cecily A. Hill
379 Moeckel Place
St. Marys, Georgia 31558 5,000 1.09% 0.91%
Wayne E. Knox
305 Commons Road
St. Simons Island, Georgia 31522 10,000 2.17% 1.81%
</TABLE>
33
<PAGE> 36
<TABLE>
<CAPTION>
ANTICIPATED SHARE OWNERSHIP AFTER THIS OFFERING
------------------------------------------------------------------------
NUMBER OF SHARES TO PERCENTAGE OF PERCENTAGE OF
NAME AND ADDRESS BE SUBSCRIBED MINIMUM OFFERING MAXIMUM OFFERING
- ----------------------------------- ---------------------- --------------------- ---------------------
<S> <C> <C> <C>
Sheila A. Meadows
389 Moeckel Place 5,000 1.09% 0.91%
St. Marys, Georgia 31558
Bill F. Raulerson
3789 Pond View Lane
Blackshear, Georgia 31516 10,000 2.17% 1.81%
Steve E. Rawl
65 Honey Creek Lane
Waverly, Georgia 31565 10,000 2.17% 1.81%
All Organizers, Directors and
Executive Officers as a group
(12 Persons) 110,000 23.91% 20.00%
</TABLE>
- --------------------
(1) Excludes: (a) the 150 shares of Common Stock received by each of David L.
Knox, Sr. and Rodney E. Bennett, and the 100 shares of Common Stock
received by each of the other Organizers, as of December 30, 1998 in
exchange for their initial capital contribution of $1,500 and $1,000 each,
respectively, and (b) the number of Shares that each Organizer will be
entitled to purchase pursuant to Organizer Warrants.
(2) All of such purchases will be made at a price of $10.00 per Share, the same
price at which Shares are being offered to the general public. No person is
presently expected to own more than 5% of the Shares of the Common Stock
immediately after this Offering. However, subject to prior regulatory
approvals, if required, Organizers may purchase additional Shares in this
Offering, if necessary for Satilla to achieve the Minimum Offering and also
may decide to purchase additional Shares in this Offering even if the
Minimum Offering is fully subscribed. Any Shares purchased by the
Organizers in excess of their original commitment will be purchased for
investment and not with the intent to resell such Shares. Although each
Organizer intends to subscribe for the respective number of Shares
indicated above, neither the Organizers nor any other subscriber will be
obligated to purchase Shares except pursuant to a valid Subscription
Agreement executed after receipt of this Prospectus.
34
<PAGE> 37
ORGANIZER WARRANTS
In connection with this Offering, Satilla is offering, to Organizers only,
the right to receive Organizer Warrants to purchase an aggregate of 100,000
Shares of Satilla's Common Stock at an exercise price of $10.00 per Share. The
number of Shares to be subject to each Organizer Warrant shall be determined on
a pro rata basis, based upon the number of Shares that each Organizer purchases
in this Offering. In no event, however, will the Organizers be entitled to
purchase an aggregate of more than 100,000 Shares pursuant to Organizer
Warrants. Assuming that the Organizers subscribe for the number of Shares
indicated in the preceding table, Satilla will offer Organizer Warrants to each
organizer to purchase the approximate number of Shares set forth in the table
below:
NUMBER OF SHARES
TO BE SUBJECT TO
NAME OF ORGANIZER ORGANIZER WARRANTS
-------------------------------- ------------------
David L. Knox, Sr............... 13,636
Rodney E. Bennett............... 9,091
M. Anthony Ham.................. 4,545
Curtis J. Tumlin, II............ 4,545
Robert T. Baird................. 4,545
Walter A. Bennett............... 9,091
Richard L. Brandon.............. 18,184
Cecily A. Hill.................. 4,545
Wayne E. Knox................... 9,091
Sheila A. Meadows............... 4,545
Bill F. Raulerson............... 9,091
Steve E. Rawl................... 9,091
-------
All Organizers as a group
(12 Persons)................. 100,000
=======
THE BOARD OF DIRECTORS
GENERAL
Satilla's Bylaws provide that the Board of Directors shall consist of not
less than five nor more than twenty-one directors, with the exact number to be
determined by the Board of Directors, each having a term of office of one year
and continuing thereafter until his or her successor has been elected and
qualified. Satilla's Board of Directors currently consists of twelve (12)
members who, following this Offering, will serve a one year term expiring at
Satilla's 2000 Annual Meeting of Shareholders. Directors will thereafter serve
terms of one year expiring upon Satilla's next Annual Meeting of Shareholders
and until the election and qualification of their successors. The Board of
Directors of the Bank will consist of the same individuals who are currently
serving as directors of Satilla. Bank directors will also serve for an initial
one year term expiring at the Bank's 2000 Annual Meeting of Shareholders, after
which Bank directors will be elected each year to serve one year terms.
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<PAGE> 38
COMPENSATION OF DIRECTORS
Neither Satilla nor the Bank presently intends to compensate its directors
for their attendance of meetings of their respective Boards of Directors or for
any other services to their respective Boards of Directors. Following the
completion of this Offering and the formation of the Bank, Satilla's Board of
Directors may pay director fees to the directors of Satilla or the Bank once
Satilla and the Bank become cumulatively profitable. Directors may be reimbursed
for their reasonable out-of-pocket expenses incurred in connection with their
service on Satilla's and the Bank's respective Boards of Directors.
EXECUTIVE COMPENSATION
GENERAL
As of the date of this Prospectus, Satilla's only employees are the Satilla
Officers, none of whom will receive any remuneration for their services to
Satilla, but instead will be compensated in their capacities as employees of the
Bank. Following this Offering, Satilla's Board of Directors will create a
Compensation Committee, the members of which will determine the appropriate
level of compensation for the Bank's executive officers, including the Satilla
Officers, as well as the Bank's other employees. In addition, Satilla's
Compensation Committee will determine the number of options and/or other awards
that each of its officers will receive under Satilla's Amended and Restated 1999
Long-Term Incentive Plan (the "Incentive Plan").
Subject to the approval of the Bank's Compensation Committee, when formed,
Satilla presently expects that the Bank will initially pay to its executive
officers the following annual salaries:
<TABLE>
<CAPTION>
POSITION AND NAME OF EXPECTED APPOINTEE ANNUAL SALARY
-------------------------------------------------------------------------- -------------------
<S> <C>
Chairman of the Board of Directors and Chief Marketing Officer $75,000
David L. Knox, Sr.*
President and Chief Executive Officer $75,000
Rodney E. Bennett
Executive Vice President $55,000
**
Vice President $50,000
M. Anthony Ham
Two Assistant Vice Presidents $40,000
**
Chief of Operations/Cashier $40,000
**
</TABLE>
- ---------------------
* Mr. Knox will focus on marketing the Bank's services and, consistent
with the Bank's regulatory approvals, will not be involved in its
lending activities.
** Experienced candidates have been identified for these positions, but
have not yet terminated their current employment.
36
<PAGE> 39
As of the date of this Prospectus, Satilla had not entered into an
employment contract with any of Satilla Officers, nor had the Bank entered into
an employment contract with any of its proposed officers and other employees.
AMENDED AND RESTATED 1999 LONG-TERM INCENTIVE PLAN
The Incentive Plan was adopted by the Board of Directors and shareholders
of Satilla on March 9, 1999, and was amended and restated by the Board on June
24, 1999. A summary of the Incentive Plan is set forth below. The summary is
qualified in its entirety by reference to the full text of the Incentive Plan
which has been filed with the Securities and Exchange Commission (the
"Commission") as an exhibit to the registration statement of which this
Prospectus is part. See "Additional Information."
General. The purpose of the Incentive Plan is to promote the success and
enhance the value of Satilla by linking the personal interests of employees and
officers to those of Satilla's new shareholders, and by providing such persons
with an incentive for outstanding performance. As of March 31, 1999, there were
approximately four persons eligible to participate in the Incentive Plan.
The Incentive Plan authorizes the granting of awards ("Awards") to key
employees and officers of Satilla or its subsidiaries in the following forms:
- options to purchase shares of Common Stock ("Options"), which may
be incentive stock options or non-qualified stock options; and
- restricted stock ("Restricted Stock").
Subject to adjustment as provided in the Incentive Plan, the aggregate
number of shares of Common Stock reserved and available for Awards is 100,000
(of which not more than 10% may be granted as Awards of Restricted Stock). The
maximum number of shares of Common Stock with respect to one or more Options
that may be granted during any one calendar year under the Incentive Plan to any
one participant is 25,000. The maximum fair market value of any Awards (other
than Options) that may be received by a participant (less any consideration paid
by the participant for such Award) during any one calendar year under the
Incentive Plan is $100,000.
No unexercised or restricted Award will be assignable or transferable by a
participant other than by will or the laws of descent and distribution.
A participant may, in the manner determined by the Compensation Committee
of the Board of Directors of Satilla (the "Committee"), designate a beneficiary
to exercise the rights of the participant and to receive any distribution with
respect to any Award upon the participant's death.
37
<PAGE> 40
Administration. The Incentive Plan will be administered by the Committee.
The Committee has the power, authority and discretion, among other things, to:
- designate participants;
- determine the type or types of Awards to be granted to each
participant and the terms and conditions thereof;
- establish, adopt or revise any rules and regulations as it may
deem necessary or advisable to administer the Incentive Plan; and
- make all other decisions and determinations that may be required
under the Incentive Plan, or that the Committee deems necessary
or advisable.
38
<PAGE> 41
Termination and Amendment. The Board or the Committee may terminate, amend
or modify the Incentive Plan without stockholder approval; provided, however,
that the Board or the Committee may condition any amendment on the approval of
stockholders of Satilla if such approval is necessary or deemed advisable with
respect to tax, securities or other applicable laws, policies or regulations. No
termination, amendment, or modification of the Incentive Plan may adversely
affect any Award previously granted under the Incentive Plan, without the
consent of the participant.
Benefits to Named Executive Officers and Others. As of the date of this
Prospectus, no stock options or other Awards had been granted or approved for
grant under the Incentive Plan. Any future Awards will be made at the discretion
of the Committee. Therefore, it is not presently possible to determine the
number or terms of Awards to be made in the future.
39
<PAGE> 42
CERTAIN TRANSACTIONS
Satilla presently intends to use approximately $105,000 of the net proceeds
of this Offering to repay outstanding amounts under the Line of Credit, which
was personally guaranteed by the Organizers. See "Use of Proceeds."
The Organizers hired Bennett Management Corporation ("BMC"), a bank
consulting firm, to prepare the regulatory applications and to otherwise assist
in the formation of Satilla and the Bank. Mr. Rodney E. Bennett, the President
and Chief Executive Officer of Satilla and the proposed President and Chief
Executive Officer of the Bank, is the acting President of BMC, and Mr. Bennett
and his wife each own 50% of the capital stock of BMC. The Organizers agreed to
pay BMC $55,000 plus expenses for its services, and, to date, the Organizers
have used the Line of Credit to pay BMC approximately $45,000. The Organizers
presently intend to use the Line of Credit to pay the remaining $10,000 to BMC
upon receipt of Satilla's and the Bank's regulatory approvals. See "Use of
Proceeds."
On October 21, 1998, the Organizers, on behalf of Satilla and the Bank,
paid $10,000 for an Option Agreement (the "Camden Option Agreement") to purchase
the site for the Bank's proposed Camden office (the "Camden Site"). The Camden
Option Agreement grants to Satilla the exclusive option to purchase the Camden
Site at any time on or prior to June 30, 1999 for $230,000 less the option fee
previously paid. The Camden Site is jointly owned by five persons, including Ms.
Cecily A. Hill and Ms. Sheila A. Meadows, who are Organizers and directors of
Satilla and proposed directors of the Bank. The Bank presently intends to use
the net proceeds of this Offering to purchase the Camden Site, which has been
recently appraised by an independent third party for $236,500.
On November 10, 1998, the Organizers, on behalf of Satilla and the Bank
paid $10,000 for an Option Agreement (the "Brantley Option Agreement") to
purchase the site for the Bank's proposed Brantley office (the "Brantley Site").
The Brantley Option Agreement grants to Satilla the exclusive option to purchase
the Brantley Site at any time on or prior to June 30, 1999 for $160,000 less the
option fee previously paid. The Brantley Site is owned by Mr. M. Anthony Ham, an
Organizer, director and the Vice President of Satilla and the proposed Vice
President and director of the Bank. The Bank presently intends to use the net
proceeds of this Offering to purchase the Brantley Site, which has been recently
appraised by an independent third party for $164,500.
In the opinion of Satilla's Board of Directors, each of the transactions
described above was made on substantially the same terms, including, without
limitation, price, as those prevailing at the time for comparable transactions
with unrelated parties. Furthermore, Satilla's Board of Directors believes that
the two sites which Satilla has options to purchase are among the best sites for
the Bank's operations.
Satilla and the Bank anticipate that the directors and officers of Satilla
and the Bank, and certain business organizations and individuals affiliated with
such persons, will be customers of and will have banking transactions in the
ordinary course of business with the Bank. Such transactions may include loans,
commitments, lines of credit and letters of credit. Satilla's Board of Directors
has resolved that all such transactions must be made on substantially the same
terms, interest rates, repayment terms and collateral, as those prevailing at
the time for comparable transactions with other unrelated persons, and will not
involve more than the normal risk of collectibility or other unfavorable
features.
40
<PAGE> 43
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this Offering, Satilla will have a minimum of 461,300
and a maximum of 551,300 Shares of Common Stock outstanding. The Shares sold in
this Offering will be freely tradable without restriction or further
registration unless purchased by "affiliates" of Satilla. As defined in
Commission Rule 144 ("Rule 144") under the Securities Act of 1933, as amended
(the "Securities Act"), an "affiliate" of an issuer is a person who directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such issuer, and generally includes members of the
Board of Directors of Satilla and the Bank, executive officers of Satilla and
the Bank, and 5% or greater stockholders of Satilla and the Bank.
In general, under Rule 144, as currently in effect, any affiliate of
Satilla who purchases Shares pursuant to this Offering is entitled to sell
within any three-month period a number of Shares that does not exceed the
greater of 1% of the outstanding Shares of Satilla's Common Stock or the average
weekly trading volume in Satilla's Common Stock during the four calendar weeks
preceding such sale. Sales under Rule 144 are also subject to certain provisions
regarding the manner of sale, notice requirements, and the availability of
current public information about Satilla. Following the Expiration Date of this
Offering, Satilla intends to file with the Commission periodic reports that
provide the "current public information" required by Rule 144. A stockholder (or
stockholders whose Shares are aggregated) who has not been an affiliate of
Satilla for at least 90 days prior to a proposed sale transaction, and who has
beneficially owned "restricted securities" for at least two years is entitled to
sell such Shares under Rule 144 without regard to the value or other limitations
described above.
Following the completion of this Offering, there will be outstanding
Organizer Warrants to purchase an aggregate of 100,000 Shares of Satilla's
Common Stock at a price of $10.00 per Share. Each of the outstanding Organizer
Warrants will become fully vested and exercisable after a period of three years
from the date of this Prospectus. Upon the Organizers' exercise of their
Organizer Warrant, the Organizers will receive Shares that will be subject to
the Rule 144 resale limitations, as previously discussed.
No market presently exists for Satilla's Common Stock, and Satilla does not
believe that an active trading market will develop in the foreseeable future.
There are no present plans for the Common Stock to be listed or qualified for
trading on any national securities exchange or on Nasdaq, and there is currently
no independent market maker in Satilla's Common Stock. As a result, no
prediction can be made as to the market price of the Common Stock prevailing
from time to time following this Offering. Sales of substantial amounts of such
Shares, or the perception that such sales could occur, could adversely affect
the market price of the Common Stock and could impair Satilla's future ability
to raise capital through an offering of equity securities.
41
<PAGE> 44
DESCRIPTION OF SATILLA'S CAPITAL STOCK
The following is a summary of certain terms of Satilla's capital stock and
is subject to and qualified in its entirety by reference to certain statutes
regulating the rights of holders of Satilla's capital stock and to Satilla's
Articles of Incorporation and Bylaws, which are filed with the Commission as
exhibits to the registration statement of which this Prospectus is part.
COMMON STOCK
General. Satilla is authorized by its Articles of Incorporation to issue up
to 2,000,000 Shares of Common Stock, $.01 par value per share. As of the date of
this Prospectus, there were 1,300 shares of Common Stock issued and outstanding,
held by the twelve Organizers. The transfer agent and registrar for the Common
Stock is________________________.
Voting Rights. The holders of Satilla's Common Stock are entitled to one
vote per Share and are not entitled to cumulative voting rights in the election
of directors. As a result, the holders of more than 50% of the Shares of the
Common Stock voting in the election of directors (subject to the voting rights
of any Preferred Stock (as defined below) then outstanding) can elect all of the
directors then standing for election if they choose to do so and, in such event,
the holders of the remaining less than 50% of the shares voting for the election
of directors would not be able to elect any person or persons to Satilla's Board
of Directors.
Dividend Rights. Subject to any preferences of any Preferred Stock then
outstanding, each Share of Satilla Common Stock is entitled to participate
equally in dividends as and when declared by Satilla's Board of Directors out of
funds legally available therefor. Generally, cash dividends may not render
Satilla insolvent, and cash dividends of Satilla may be restricted by certain
federal and state laws regulating banks and bank holding companies.
Preemptive Rights. The holders of Satilla's Common Stock do not have any
preemptive or preferential right to purchase or to subscribe for any additional
Shares of Common Stock or any other securities that may from time to time be
issued by Satilla.
Assessment and Redemption. All outstanding Shares of Common Stock issued in
this Offering will be fully paid and nonassessable. There is no provision for
redemption or conversion of Satilla's Common Stock.
Liquidation Rights. In the event of liquidation, dissolution or winding-up
of Satilla, whether voluntary or involuntary, the holders of Satilla's Common
Stock (and the holders of any class or series of stock entitled to participate
with Satilla's Common Stock in the distribution of assets) will be entitled to
share ratably in any of the net assets or funds which are available for
distribution to shareholders, after the satisfaction of all liabilities, or
after adequate provision is made therefor and after distribution to holders of
any class of stock having preference over Satilla's Common Stock in the case of
liquidation.
PREFERRED STOCK
General. Satilla's Articles of Incorporation authorize the Board of
Directors, without further shareholder action, to issue from time to time, a
maximum of 500,000 shares of Preferred Stock, $.01 par value (the "Preferred
Stock"), in one or more series, upon such terms, at such times and for such
consideration as Satilla's Board of Directors may determine. Each such series
may have such voting powers, full or limited, or no voting powers, and such
designations, preferences and relative, participating, optional or other special
rights and qualifications, limitations or restrictions thereof, as are
42
<PAGE> 45
established by Satilla's Board of Directors. Satilla had not issued, and had no
plans to issue, any shares of its Preferred Stock as of the date of this
Prospectus. Any shares of Preferred Stock issued in the future may have priority
over previously issued shares of Common Stock as to payment of dividends and
upon liquidation.
ORGANIZER WARRANTS
General. In addition to the Common Stock, Satilla is also offering, to the
Organizers only, Organizer Warrants to purchase an aggregate of 100,000 Shares
of Satilla's Common Stock at an exercise price of $10.00 per share. The
Organizer Warrants are being offered to the Organizers to encourage their
substantial long-term investment in Satilla and in exchange for their personal
guarantee of the Line of Credit. The number of Shares to be the subject of each
Organizer Warrant will be determined on a pro rata basis, based upon the number
of Shares purchased by such Organizer in this Offering.
Vesting and Exercise Rights. The Organizers' rights under the Organizer
Warrants will become fully vested upon the later of the termination of this
Offering or the opening of the Bank, and each Organizer Warrant will become
fully exercisable three years after vesting.
Termination; Transferability. Each Organizer Warrant will terminate on
March 31, 2009. The Organizer Warrants are non-transferable, except, in the
case of the death of the holder of the Organizer Warrant, by will or under the
laws of descent and distribution. Holders of Warrants have no voting or other
rights as shareholders of Satilla's Common Stock.
Directed Exercise, Call or Forfeiture by Regulatory Agencies. In the event
that any of the Georgia Department, the FDIC or the Federal Reserve determine
that Satilla and/or the Bank are inadequately capitalized in light of regulatory
guidelines, the regulatory agency making such determination may direct the
exercise, call or complete forfeiture of the Organizers' rights under their
respective Organizer Warrants.
LEGAL MATTERS
The legality of the Shares of Common Stock to be issued in this Offering
has been passed upon by Alston & Bird LLP, Atlanta, Georgia.
EXPERTS
The financial statements of Satilla as of and for the period from July 1,
1998 through December 31, 1998 have been included herein and in the registration
statement of which this Prospectus is part in reliance upon the report of
Thigpen, Jones, Seaton & Co., P.C., Dublin, Georgia, independent certified
public accountants, appearing elsewhere herein and upon the authority of such
firm as experts in accounting and auditing.
INDEMNIFICATION
The Georgia Business Corporation Code (the "GBCC") permits, under certain
circumstances, the indemnification of officers, directors, employees and agents
of a corporation with respect to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, to
which such person was or is a party or is threatened to be made a party by
reason of his
43
<PAGE> 46
action in such capacity for, or at the request of, such corporation. To the
extent that such person is successful in defending any such suit, Georgia law
provides that he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
Satilla's Articles of Incorporation and Bylaws provide for the
indemnification of Satilla's directors, officers, employees and agents in
accordance with the GBCC. Georgia law also provides that, with certain
exceptions, the above rights will not be deemed exclusive of other rights of
indemnification contained in any Article of Incorporation, Bylaw, resolution or
agreement approved by the holders of a majority of the stock. Satilla's Bylaws
provide that Satilla may purchase and maintain insurance on behalf of directors,
officers, employees and agents, as well as others serving at their request,
against any liabilities asserted against such persons whether or not Satilla
would have the power to indemnify such persons against such liability under the
GBCC. Satilla intends to purchase and maintain such insurance.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, may be permitted to directors, officers and controlling persons of
Satilla pursuant to the foregoing provisions, or otherwise, Satilla has been
advised that, in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
ADDITIONAL INFORMATION
Satilla has filed with the Commission through its Electronic Data Gathering
and Retrieval System ("EDGAR") a Registration Statement on Form SB-2 (together
with all amendments and exhibits thereto, the "Registration Statement") under
the Securities Act with respect to the offer and sale of Common Stock pursuant
to this Prospectus. This Prospectus, filed as a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement or the exhibits and schedules thereto in accordance with the rules and
regulations of the Commission and reference is hereby made to such omitted
information. Statements made in this Prospectus concerning the contents of any
contract, agreement or other document filed as an exhibit to the Registration
Statement are summaries of the terms of such contracts, agreements or documents.
Reference is made to each such exhibit for a more complete description of the
matters involved. The Registration Statement and the exhibits and schedules
thereto filed with the Commission may be inspected, without charge, and copies
may be obtained at prescribed rates, at the public reference facility maintained
by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Commission located at 7 World Trade
Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. The public may obtain
additional information regarding the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0330. The Registration Statement and other
information filed by Satilla with the Commission via EDGAR are also available at
the web site maintained by the Commission on the World Wide Web at
http://www.sec.gov.
Satilla has not previously been subject to the reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Upon the
later of the filing of a registration statement on Form 8-A with respect to
Satilla's Common Stock and the effective date of this Registration Statement,
however, Satilla and the holders of its Common Stock will become subject to the
proxy solicitation rules, reporting requirements and restriction on stock
purchases and sales by directors, officers and greater than 10% stockholders,
the annual and periodic reporting and certain other requirements of the Exchange
Act. Accordingly, Satilla intends to furnish its stockholders with annual
reports containing financial statements audited by its independent accountants
and quarterly reports for the first three quarters of each fiscal year
containing unaudited financial statements.
44
<PAGE> 47
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
OF
SATILLA FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE COMPANY)
Index to Financial Statements
<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT..................................... F-2
FINANCIAL STATEMENTS:
Balance Sheet as of December 31, 1998.......................... F-3
Statement of Operations for the period from July 1, 1998 to
December 31, 1998............................................ F-4
Statement of Changes in Shareholders' Equity for the period
from July 1, 1998 to December 31, 1998....................... F-5
Statement of Cash Flows for the period from July 1, 1998 to
December 31, 1998............................................ F-6
Notes to Financial Statements for the period from July 1, 1998
to December 31, 1998......................................... F-7
Balance Sheet as of March 31, 1999 (unaudited)................. F-9
Statement of Operations for the three month period ended
March 31, 1999 (unaudited)................................... F-10
Statement of Changes in Shareholders' Equity for the three
month period ended March 31, 1999 (unaudited)................ F-11
Statement of Cash Flows for the three month period ended
March 31, 1999 (unaudited)................................... F-12
Notes to Financial Statements for the three month period
ended March 31, 1999......................................... F-13
</TABLE>
F-1
<PAGE> 48
INDEPENDENT AUDITORS' REPORT
Organizers
Satilla Financial Services, Inc. (A Development Stage Company)
We have audited the accompanying balance sheet of Satilla Financial
Services, Inc. (A Development Stage Company) as of December 31, 1998, and the
related statements of income, changes in shareholders' equity and cash flows for
the period of July 1, 1998 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 Satilla Financial
Services, Inc. (A Development Stage Company) at December 31, 1998, and the
results of its operations and its cash flows for the period of July 1, 1998 to
December 31, 1998, in conformity with generally accepted accounting principles.
/s/ THIGPEN, JONES, SEATON & CO., PC
February 26, 1999
Dublin, Georgia
F-2
<PAGE> 49
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
================================================================================
<TABLE>
<CAPTION>
As of
December 31,
1998
------------
<S> <C>
ASSETS
Cash and cash equivalents $ 13,430
Other assets 15,000
--------
Total Assets $ 28,430
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term note payable $ 70,000
Other liabilities 5,000
--------
Total current liabilities 75,000
========
Commitments and Contingencies
Shareholders' Equity
Common stock, $.01 par value, authorized 2,000,000 shares, issued
and outstanding 1,300 shares 13
Additional paid-in capital 12,987
Deficit accumulated during development stage (59,570)
--------
Total shareholders' equity (46,570)
--------
Total Liabilities and Shareholders' Equity $ 28,430
========
</TABLE>
See Accompanying Notes to Financial Statements
F-3
<PAGE> 50
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
================================================================================
<TABLE>
<CAPTION>
Period of
July 1, 1998
to December 31, 1998
--------------------
<S> <C>
Revenues $ --
--------------------
Less Expense:
Application fees 12,000
Professional fees 43,201
Building and site plans 1,903
Dues and subscriptions 546
Postage 36
Travel and entertainment 1,884
--------------------
Total Expenses 59,570
--------------------
Net Loss $ (59,570)
Beginning Accumulated Deficit --
--------------------
Ending Accumulated Deficit $ (59,570)
====================
Primary Earnings (Loss) per share $ (45.82)
====================
Fully Diluted Earnings (Loss) per share $ (45.82)
====================
</TABLE>
See Accompanying Notes to Financial Statements
F-4
<PAGE> 51
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
================================================================================
<TABLE>
<CAPTION>
Deficit
Additional accumulated
Common Paid-in during
Stock Capital development stage Total
-------- --------- ----------------- --------
<S> <C> <C> <C> <C>
Balance, December 31, 1997 $ -- $ -- $ -- $ --
--------
Comprehensive income:
Net loss -- -- (59,570) (59,570)
--------
Total comprehensive income (59,570)
--------
Initial issuance of stock 13 12,987 -- 13,000
-------- ------- -------- --------
Balance, December 31, 1998 $ 13 $12,987 $(59,570) $(46,570)
======== ======= ======== ========
</TABLE>
See Accompanying Notes to Financial Statements
F-5
<PAGE> 52
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
================================================================================
<TABLE>
<CAPTION>
Period of
July 1, 1998
to December 31, 1998
--------------------
<S> <C>
Cash Flows from Operating Activities:
Net loss $ (59,570)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other liabilities 5,000
---------
Net cash used in operating activities (54,570)
---------
Cash Flows from Investing Activities:
Land options (15,000)
---------
Cash Flows from Financing Activities:
Proceeds from issuance of debt 70,000
Issuance of common stock 13,000
---------
Net cash provided by financing activities 83,000
---------
Net Increase in Cash and Cash Equivalents 13,430
Cash and Cash Equivalents, Beginning of Year --
---------
Cash and Cash Equivalents, End of Year $ 13,430
=========
</TABLE>
See Accompanying Notes to Financial Statements
F-6
<PAGE> 53
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD OF JULY 1, 1998 TO DECEMBER 31, 1998
================================================================================
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. REPORTING ENTITY - The Satilla Financial Services Inc. is a
development stage enterprise which began with a group of
thirteen organizers in July 1998, and plans to charter a State
Bank in St. Marys and Nahunta, Georgia called the Satilla
Community Bank. The Company is pending approval from the State
Department of Banking and Finance and the Federal Deposit
Insurance Corporation. The Satilla Financial Services, Inc.
will own 100% of the shares of the proposed state chartered
bank.
The reporting period for the statements of income and cash
flow is from July 1, 1998, when the first activity occurred,
to December 31, 1998. The primary activities of the enterprise
to date are preparation of the state charter and raising
capitol.
2. CASH AND CASH EQUIVALENTS - For the purpose of the statement
of cash flows, the Company considers all highly liquid debt
instruments purchased with maturity of three months or less to
be cash equivalents. This includes money market deposit
accounts and short-term certificates of deposit.
3. MANAGEMENT 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 at
December 31, 1998 revenues and expenses during the reporting
period. Actual results could differ from those estimates.
4. ADVERTISING COSTS - The Company has incurred no advertising
costs.
B. SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
1998
--------------------
<S> <C>
The Bankers Bank $ 70,000
====================
</TABLE>
These borrowings are against a line of credit that has been established
with The Bankers Bank for a total of $350,000 with interest at the
prime rate as established by The Bankers Bank. The current rate is
7.75% with interest payable at maturity. Principal and accrued interest
will be due at maturity on September 30, 1999.
C. RELATED PARTY TRANSACTIONS
The note payable at The Bankers Bank is fully guaranteed by the
thirteen organizers. There is no additional collateral for this loan.
The Company has contracted with Bennett Consulting for bank charter
application preparation and other matters related to organization. The
Company expects to pay Bennett Consulting $55,000 for its services
during the development stage. As of December 31, 1998, the Company has
expensed $35,000 to Bennett Consulting. One of the organizers of the
Company owns this firm.
Two option agreements have been executed regarding the purchase of land
for the bank sites of which three organizers are related to these
options. The Company paid $10,000 for the Nahunta option agreement and
$5,000 for the St. Mary's option. See Note D for further information on
these transactions.
D. COMMITMENTS AND CONTINGENCIES
Satilla Financial Services, Inc. (A Development Stage Company) has
entered an option agreement with five individuals to acquire a site for
the Bank in St. Marys, Georgia for $ 5,000. Two of these individuals,
Cecily Hill and Shelia Meadows, are organizers of the bank. The Company
has also entered into a $ 10,000 option agreement with Marshall A. Ham
to acquire a site for the Nahunta branch site. Mr. Ham is also an
organizer of the bank. Both of these options expire at 12:00 noon on
June 30, 1999. The exercise of these options would commit the Company
to the purchase of the two sites at $160,000 and $230,000,
respectively.
E. DISCLOSURES RELATING TO STATEMENT OF CASH FLOWS
CASH FLOWS RELATING TO INTEREST AND INCOME TAXES - Cash paid during the
period for interest and income taxes was as follows:
F-7
<PAGE> 54
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD OF JULY 1, 1998 TO DECEMBER 31, 1998
================================================================================
<TABLE>
<CAPTION>
Period of
July 1, 1998
to December 31, 1998
--------------------
<S> <C>
Interest (net of amount capitalized) $ -
====================
Income Taxes $ -
====================
</TABLE>
F. YEAR 2000 COMPLIANCE ISSUES
The Company is in the process of evaluating the potential effects of
the Year 2000 problem on its operating and environmental systems when
purchasing new equipment. This potential problem exists due to many
older computers having been programmed to recognize only the last two
digits of a year i.e., "98" is for the year 1998. Accordingly, with the
new millenium approaching, these computers will potentially recognize
the year 2000 - "00" as the year 1900, or just not be able to
comprehend the date, thus, potentially effecting the accuracy of, or
ability to, process any date sensitive functions.
The Company will adopt a plan for bringing their systems into
compliance so that the potential problems should not occur at start-
up.
G. CAPITAL STRUCTURE
The Company's prospectus authorizes warrants to organizers exercisable
for the purchase of up to 100,000 common shares. The Company is also
authorized under its organizing documents to issue 500,000 shares of
preferred stock.
F-8
<PAGE> 55
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
As of
March 31,
1999
---------
<S> <C>
ASSETS
Cash and cash equivalents $ 2,179
Other assets 15,000
---------
TOTAL ASSETS $ 17,179
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term note payable $ 105,000
Accrued interest payable 4,548
---------
Total current liabilities 109,548
---------
Commitments and Contingencies
Shareholders' Equity
Common stock, $.01 par value, authorized 2,000,000
shares, issued and outstanding 1,300 shares 13
Additional paid-in capital 12,987
Deficit accumulated during development stage (105,369)
---------
Total shareholders' equity (92,369)
---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 17,179
=========
</TABLE>
See the Accompanying Notes to Financial Statements
F-9
<PAGE> 56
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period of Period of July 1, 1998
January 1, 1999 (date of inception)
to March 31, 1999 to March 31, 1999
----------------- ----------------------
<S> <C> <C>
REVENUES $ -- $ --
--------- ---------
LESS EXPENSE:
Application fees -- 12,000
Consulting fees 10,000 10,000
Professional fees 28,628 71,829
Building and site plans -- 1,903
Interest expense 4,548 4,548
Dues and subscriptions -- 546
Rent expense 500 500
Telephone 411 411
Travel and entertainment 83 1,967
Miscellaneous expense 1,629 1,665
--------- ---------
TOTAL EXPENSES 45,799 105,369
--------- ---------
NET LOSS $ (45,799) $(105,369)
BEGINNING ACCUMULATED DEFICIT (59,570) --
--------- ---------
ENDING ACCUMULATED DEFICIT $(105,369) $(105,369)
========= =========
Primary Earnings (Loss) per share $ (35.23) $ (81.05)
========= =========
Fully Diluted Earnings (Loss) per share $ (35.23) $ (81.05)
========= =========
</TABLE>
See the Accompanying Notes to Financial Statements
F-10
<PAGE> 57
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Additional accumulated
Common Paid-in during
Stock Capital development stage Total
-------- ---------- ----------------- --------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1997 $ -- $ -- $ -- $ --
Comprehensive income:
Net loss -- -- (59,570) (59,570)
--------
Total comprehensive income (loss) (59,570)
--------
Initial issuance of stock 13 12,987 -- 13,000
-------- ------- --------- --------
BALANCE, DECEMBER 31, 1998 $ 13 $12,987 $ (59,570) $(46,570)
Comprehensive income:
Net loss -- -- (45,799) (45,799)
--------
Total comprehensive income (loss) (45,799)
--------
BALANCE, MARCH 31, 1999 $ 13 $12,987 $(105,369) $(92,369)
======== ======= ========= ========
</TABLE>
See the Accompanying Notes to Financial Statements
F-11
<PAGE> 58
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period of Period of July 1, 1998
January 1, 1998 (date of inception)
to March 31, 1999 to March 31, 1999
----------------- ----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(45,799) $(105,369)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other liabilities (452) 4,548
-------- ---------
Net cash used in operating activities (46,251) (100,821)
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Land options -- (15,000)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 35,000 105,000
Issuance of common stock -- 13,000
-------- ---------
Net cash provided by financing activities 35,000 118,000
-------- ---------
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS (11,251) 2,179
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 13,430 --
-------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,179 $ 2,179
======== =========
</TABLE>
See the Accompanying Notes to Financial Statements
F-12
<PAGE> 59
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD OF JANUARY 1, 1999 TO MARCH 31, 1999 AND JULY 1, 1998 TO MARCH 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. REPORTING ENTITY - The Satilla Financial Services, Inc. is a
development stage enterprise, which began with a group of
thirteen organizers in July 1998, and plans to charter a State
Bank in St. Marys and Nahunta, Georgia called the Satilla
Community Bank. The Company is pending approval from the State
Department of Banking and Finance and the Federal Deposit
Insurance Corporation. The Satilla Financial Services, Inc.
will own 100% of the shares of the proposed state chartered
bank.
The reporting periods for the statements of operations and
cash flows are from January 1, 1999 to March 31, 1999 and July
1, 1998 (date of inception) to March 31, 1999. The primary
activities of the enterprise to date are preparation of the
state charter and raising capital.
2. CASH AND CASH EQUIVALENTS - For the purpose of the statement
of cash flows, the Company considers all highly liquid debt
instruments purchased with maturity of three months or less to
be cash equivalents. This includes money market deposit
accounts and short-term certificates of deposit.
3. MANAGEMENT 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 at March
31, 1999 as well as revenues and expenses during the reporting
period. Actual results could differ from those estimates.
4. ADVERTISING COSTS - The Company has incurred no advertising
costs.
B. SHORT-TERM BORROWINGS
<TABLE>
<CAPTION>
March 31, 1999
--------------
<S> <C>
The Bankers Bank $ 105,000
=========
</TABLE>
These borrowings are against a line of credit that has been established
with The Bankers Bank for a total of $350,000 with interest at the
prime rate as established by The Bankers Bank. The current rate is
7.75% with interest payable at maturity. Principal and accrued interest
will be due at maturity on September 30, 1999.
C. RELATED PARTY TRANSACTIONS
The note payable at The Bankers Bank is fully guaranteed by the
thirteen organizers. There is no additional collateral for this loan.
The Company has contracted with Bennett Consulting for bank charter
application preparation and other matters related to organization. The
Company expects to pay Bennett Consulting $55,000 for its services
during the development stage. As of March 31, 1999, the Company has
expensed $45,000 to Bennett Consulting. One of the organizers of the
Company owns this firm.
Two option agreements have been executed regarding the purchase of land
for the bank sites of which three organizers are related to these
options. The Company paid $10,000 for the Nahunta option agreement and
$5,000 for the St. Mary's option. See Note D for further information on
these transactions.
D. COMMITMENTS AND CONTINGENCIES
Satilla Financial Services, Inc. (A Development Stage Company) has
entered an option agreement with five individuals to acquire a site for
the Bank in St. Marys, Georgia for $5,000. Two of these individuals,
Cecily Hill and Shelia Meadows,
See the Accompanying Notes to Financial Statements
F-13
<PAGE> 60
SATILLA FINANCIAL SERVICES, INC. (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD OF JANUARY 1, 1999 TO MARCH 31, 1999 AND JULY 1, 1998 TO MARCH 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
are organizers of the bank. The Company has also entered into an option
agreement for $ 10,000 with Marshall A. Ham to acquire a site for the
Nahunta branch site. Mr. Ham is also an organizer of the bank. Both of
these options expire at 12:00 noon on June 30, 1999. The exercise of
these options would commit the Company to the purchase of the two sites
at $160,000 and $230,000, respectively.
E. DISCLOSURES RELATING TO STATEMENT OF CASH FLOWS
CASH FLOWS RELATING TO INTEREST AND INCOME TAXES - Cash paid during the
period for interest and income taxes was as follows:
<TABLE>
<CAPTION>
Period of Period of July 1, 1998,
January 1, 1999 (date of inception)
to March 31, 1999 to March 31, 1999
----------------- ----------------------
<S> <C> <C>
Interest (net of amount capitalized) $ - $ -
========== =========
Income Taxes $ - $ -
========== =========
</TABLE>
F. YEAR 2000 COMPLIANCE ISSUES
The Company is in the process of evaluating the potential effects of
the Year 2000 problem on its operating and environmental systems when
purchasing new equipment. This potential problem exists due to many
older computers having been programmed to recognize only the last two
digits of a year i.e., "98" is for the year 1998. Accordingly, with the
new millennium approaching, these computers will potentially recognize
the year 2000 - "00" as the year 1900, or just not be able to
comprehend the date, thus, potentially effecting the accuracy of, or
ability to, process any date sensitive functions.
The Company will adopt a plan for bringing their systems into
compliance so that the potential problems should not occur at start-
up.
G. CAPITAL STRUCTURE
The Company's prospectus authorizes warrants to organizers exercisable
for the purchase of up to 100,000 common shares. The Company is also
authorized under its organizing documents to issue 500,000 shares of
preferred stock.
F-14
<PAGE> 61
================================================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY SATILLA.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY THE COMMON STOCK 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, RES UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF SATILLA RES SINCE THE DATE
HEREOF.
-------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Important Notice to Florida Residents...............
Prospectus Summary..................................
Risk Factors........................................
Important Notice About Information
in this Prospectus................................
Satilla Financial Services..........................
Proposed Market.....................................
Proposed Business...................................
Plan of Operation...................................
This Offering.......................................
Plan of Distribution................................
Market Information and Dividends....................
Use of Proceeds.....................................
Capitalization......................................
Supervision and Regulation..........................
Management..........................................
Principal Shareholders..............................
The Board of Directors..............................
Executive Compensation..............................
Certain Transactions................................
Shares Eligible for Future Sale.....................
Description of Satilla's Capital Stock..............
Legal Matters.......................................
Experts ............................................
Indemnification.....................................
Additional Information..............................
Index to Financial Statements.......................F-1
</TABLE>
-------------------------------
UNTIL , 1999 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDER-WRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
================================================================================
[LOGO]
SATILLA FINANCIAL
SERVICES, INC.
COMMON STOCK
MINIMUM OFFERING - 460,000 SHARES
MAXIMUM OFFERING - 550,000 SHARES
ORGANIZER WARRANTS
TO PURCHASE UP TO 100,000 SHARES OF
COMMON STOCK
-----------------------
PROSPECTUS
-----------------------
June ____, 1999
===============================================================================
<PAGE> 62
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation of Satilla Financial Services, Inc.
("Satilla" or the "Registrant") eliminate, subject to certain limited
exceptions, the personal liability of a director to Satilla or its shareholders
for monetary damage for any breach of duty as a director. There is no
elimination of liability for:
- a breach of duty involving appropriation of a business
opportunity of Satilla;
- an act or omission which involves intentional misconduct or a
knowing violation of law;
- any transaction from which the director derives an improper
personal benefit; or
- as to any payments of a dividend or any other type of
distribution that is illegal under Section 14-2-832 of the
Georgia Business Corporation Code (the "GBCC").
In addition, if at any time the GBCC is amended to authorize further
elimination or limitation of the personal liability of a director, then the
liability of each director of Satilla shall be eliminated or limited to the
fullest extent permitted by such provisions, as so amended, without further
action by the shareholders, unless the provisions of the GBCC require such
action. The provision does not limit the right of Satilla or its shareholders to
seek injunctive or other equitable relief not involving payments in the nature
of monetary damages.
Satilla's Bylaws contain certain provisions which provide indemnification
to directors of Satilla that is broader than the protection expressly mandated
in Sections 14-2-852 and 14-2-857 of the GBCC. To the extent that a director or
officer of Satilla has been successful, on the merits or otherwise, in the
defense of any action or proceeding brought by reason of the fact that such
person was a director or officer of Satilla, Sections 14-2-852 and 14-2-857 of
the GBCC would require Satilla to indemnify such persons against expenses
(including attorney's fees) actually and reasonably incurred in connection
therewith. The GBCC expressly allows Satilla to provide for greater
indemnification rights to its officers and directors, subject to shareholder
approval.
The indemnification provisions in Satilla's Bylaws require Satilla to
indemnify and hold harmless any director who was or is a party or is threatened
to be made a party, to any threatened, pending or completed action, suit or
proceeding whether civil, criminal, administrative or investigative (including
any action or suit by or in the right of Satilla) because he or she is or was a
director of Satilla, against expenses (including, but not limited to, attorney's
fees and disbursements, court costs and expert witness fees), and against
judgments, fines, penalties, and amounts paid in settlement incurred by him or
her in connection with the action, suit or proceeding. Indemnification would be
disallowed under any circumstances where indemnification may not be authorized
by action of the Board of Directors, the shareholders or otherwise. The Board of
Directors of Satilla also has the authority to extend to officers, employees and
agents the same indemnification rights held by directors, subject to all the
accompanying conditions and obligations. Indemnified persons would also be
entitled to have Satilla advance expenses prior to the final disposition of the
proceeding. If it is ultimately determined that they are not entitled to
indemnification, however, such amounts would be repaid. Insofar as
indemnification for liability arising under the Securities Act of 1933, as
amended (the "Securities Act") may be permitted to officers and directors of
Satilla pursuant to the foregoing provisions, Satilla 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.
There is no pending litigation or proceeding involving a director, officer,
employee or other agent of Satilla as to which indemnification is being sought,
nor is Satilla aware of any pending or threatened
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litigation that may result in claims for indemnification by any director,
officer, employee or other agent. Satilla intends to maintain policies of
directors' and officers' liability insurance.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with the
issuance and distribution of the securities being registered hereby. All amounts
except the Commission registration fee are estimated.
<TABLE>
<CAPTION>
<S> <C>
Commission registration fee.......................................................................... $ 1,807
Accounting fees and expenses......................................................................... 10,000
Legal fees and expenses.............................................................................. 57,500
Printing and engraving expenses...................................................................... 15,000
Blue sky fees and expenses........................................................................... 2,500
Transfer agent and registrar fees and expenses....................................................... 5,000
Miscellaneous........................................................................................ 8,193
--------
Total...................................................................................... $100,000
========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Satilla is a newly formed corporation and has not prior to the date of this
Prospectus sold any of its securities.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as a part of this Registration Statement:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------------------------------------------------------------
<S> <C>
3.1 Articles of Incorporation of Satilla.*
3.2 Bylaws of Satilla.*
4.1 Specimen Stock Certificate of Satilla's Common Stock, par value
$.01 per share.*
4.2 Form of Organizer Warrant.*
5.1 Opinion of Alston & Bird LLP.
10.1 Satilla's Amended and Restated 1999 Long-Term Incentive Plan.*
10.2 Loan Agreement, dated as of September 30, 1998, by and between
Satilla, as Borrower, The Bankers Bank, as Lender, and Satilla's
organizers (the "Organizers"), as Guarantors.*
10.3 Escrow Agreement, dated as of March 31, 1999, by and between
Satilla and The Bankers Bank, as Escrow Agent.*
10.4 Option Agreement, dated as of October 21, 1998, by and between
Cecily Hill, Sheila Meadows, Melodie Page, Elese Stover, and
Jennifer Wright, as Optionors, and Satilla Community Bank (the
"Bank") and/or Satilla, as Optionee, relating to the purchase of
the site for the Bank's Camden County office.*
</TABLE>
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<PAGE> 64
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------------------------------------------------------------
<S> <C>
10.5 Option Agreement, dated as of October 21, 1998, by and between M.
Anthony Ham, as Optionor, and the Bank and/or Satilla relating to
the purchase of the site for the Bank's Brantley County office.*
23.1 Consent of Alston & Bird LLP (Included in Exhibit 5.1).
23.2 Consent of Thigpen, Jones, Seaton & Co., P.C.
24.1 Power of Attorney.*
27.1 Financial Data Schedule (for SEC use only).*
99.1 Form of Subscription Agreement.*
------ ----------------------------------------------------------------
* Previously filed
</TABLE>
ITEM 28. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes to:
(1) File, during any period in which it offers or sell
securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing; any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) Include any additional or changed material information
on the plan of distribution.
(2) For determining any liability under the Securities Act, treat
each post-effective amendment that contains a form of prospectus as a
new registration statement for the securities offered in the
registration statement, and that offering of the securities at that
time as the initial bona fide offering of those securities.
(b) Insofar as indemnification for liabilities arising under the
Securities 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
Securities 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 of the
registrant 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 is against public policy as expressed in
the Securities Act and will be governed by the final adjudication of such issue.
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<PAGE> 65
(c) The undersigned Registrant hereby undertakes that:
(1) For the purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4), or 497(h) under the Securities Act, shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purposes of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
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<PAGE> 66
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of St. Marys,
State of Georgia, as of June 28, 1999.
SATILLA FINANCIAL SERVICES, INC.
By: /s/ Rodney E. Bennett
------------------------------------
Name: Rodney E. Bennett
Title: President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities indicated as of June 28, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Rodney E. Bennett President, Chief Executive Officer
- ---------------------------------- (Principal Executive Officer)
Rodney E. Bennett and Director
* Chairman of the Board of Directors
- ---------------------------------- and Chief Marketing Officer
David L. Knox, Sr.
* Vice President and Director
- ---------------------------------- (Principal Financial Officer)
M. Anthony Ham
* Secretary, Treasurer and Director
- ---------------------------------- (Principal Accounting Officer)
Curtis J. Tumlin, II
* Director
- ----------------------------------
Robert T. Baird
* Director
- ----------------------------------
Walter A. Bennett
* Director
- ----------------------------------
Richard L. Brandon
* Director
- ----------------------------------
Cecily A. Hill
* Director
- ----------------------------------
Wayne E. Knox
</TABLE>
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<PAGE> 67
* Director
-----------------------------------
Sheila A. Meadows
* Director
-----------------------------------
Bill F. Raulerson
* Director
-----------------------------------
Steve E. Rawl
* By: /s/ Rodney E. Bennett
---------------------------------
Rodney E. Bennett
Attorney-In-Fact
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<PAGE> 68
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- --------------------------------------------------------------
<S> <C>
5.1 Opinion of Alston & Bird LLP.
23.1 Consent of Alston & Bird LLP (Included in Exhibit 5.1).
23.2 Consent of Thigpen, Jones, Seaton & Co., P.C.
</TABLE>
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<PAGE> 1
EXHIBIT 5.1
[ALSTON & BIRD LLP LETTERHEAD]
June 28, 1999
Satilla Financial Services, Inc.
180 Mariners Drive
Kingsland, Georgia 31548
Re: Registration Statement on Form SB-2 (File No. 333-75727)
--------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Satilla Financial Services, Inc., a Georgia
corporation (the "Company"), in connection with the filing of the
above-referenced Registration Statement (as amended through the date hereof, the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") to register under the Securities Act of 1933, as amended (the
"Act"), shares of the Company's Common Stock, par value $0.01 per share (the
"Shares").
We have examined the Company's Articles of Incorporation and Bylaws,
records of proceedings of the Board of Directors, or committees thereof, and the
Registration Statement. We also have examined originals or copies, certified or
otherwise identified to our satisfaction, of such other corporate records and
documents of the Company, such certificates of officers of the Company and
public officials, and such other records and documents as we have deemed
necessary or appropriate as a basis for the opinions hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity and completeness of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed, photostatic or facsimile
copies, and the authenticity of the originals of such copies, and we have
assumed all certificates of public officials to have been properly given and to
be accurate.
<PAGE> 2
Satilla Financial Services, Inc.
June 28, 1999
Page 2
On the basis of the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the shares of Common Stock covered by the
Registration Statement have been legally authorized and, when paid for, issued
and sold in accordance with the terms described in the Registration Statement,
will be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus constituting a part thereof. In giving such consent,
we do not thereby admit that we are within the category of persons whose consent
is required under Section 7 of the Act or the rules and regulations of the
Commission thereunder.
This opinion letter is being furnished by us solely in connection with
the Registration Statement and is not to be used, reproduced, circulated, quoted
or otherwise relied upon for any other purpose, without our prior express
written consent. No opinion may be implied or inferred beyond those expressly
stated. This opinion letter is rendered as of the date hereof, and we have no
obligation to update this opinion letter.
Sincerely,
ALSTON & BIRD LLP
By: /s/ Ralph F. MacDonald, III
----------------------------------
A Partner
<PAGE> 1
EXHIBIT 23.2
[LOGO]
[LETTERHEAD OF THIGPEN, JONES, SEATON & CO., P.C.]
We have issued our report dated February 26, 1999 on the accompanying
financial statements of Satilla Financial Services, Inc. (A Development Stage
Company) as included in the SB-2 Registration Statement and Prospectus. We
consent to the use of the aforementioned report in this Form SB-2 Registration
Statement and Prospectus and to the use of our name as it appears under the
caption "Experts."
/s/ Thigpen, Jones, Seaton & Co. PC
Dublin, Georgia
June 29, 1999
