<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
---------- -----------
Commission file number 333-81551
---------
Lehigh Acres First National Bancshares, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 65-0921046
- ---------------------------------------- ------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
1300 Homestead Road N.
Lehigh Acres, FL 33936
- ---------------------------------------- ------------------------------------
(Address of principal executive offices) (Zip Code)
941-368-1190
------------------
(Telephone Number)
Not Applicable
----------------------------
(Former name, former address
and former fiscal year,
if changed since last report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
YES XX NO
--
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 18,000 shares of common
stock, $.01 par value per share, issued and outstanding as of September 30,
1999.
Transitional Small Business Disclosure Format (check one): YES NO XX
-- --
<PAGE> 2
LEHIGH ACRES FIRST NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The financial statements of Lehigh Acres First National Bancshares,
Inc. (the "Company") are set forth in the following pages.
-2-
<PAGE> 3
LEHIGH ACRES FIRST NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
SEPTEMBER 30, 1999
(Unaudited)
Assets
<TABLE>
<CAPTION>
<S> <C>
Cash $ 5,949
Restricted cash 11,500
Other assets 1,360
---------
$ 18,809
=========
Liabilities and Stockholders' Deficit
Subscribers' deposits $ 11,500
Advances from organizers 30,000
Note payable - line of credit 122,000
---------
Total liabilities 163,500
---------
Stockholders' deficit:
Common stock, par value $.01, 10,000,000 shares authorized;
18,000 shares issued and outstanding 180,000
Additional paid-in capital
Deficit accumulated during the development stage (324,691)
---------
Total stockholders' deficit (144,691)
---------
Total Liabilities and Stockholders' Equity $ 18,809
- ------------------------------------------ =========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 4
LEHIGH ACRES FIRST NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
THE PERIOD FROM APRIL 14, 1998 (INCEPTION) TO SEPTEMBER 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Cumulative
Ended Through
September 30, 1999 September 30, 1999
------------------ ------------------
<S> <C> <C>
Revenues:
Interest income $ 598 $ 2,889
--------- ---------
Total Revenues 598 2,889
--------- ---------
Expenses:
Salaries and employee benefits 4,487 4,487
Consulting fees 51,000 131,000
Organizational expenses 48,425 117,293
Insurance Expense 5,378 9,418
Occupancy 28,040 28,040
Advertising and Promotional 2,296 3,241
Travel and Entertainment 3,932 6,922
Miscellaneous other expenses 13,883 14,944
--------- ---------
Total expense 157,441 315,345
--------- ---------
Net loss $(156,843) $(312,456)
========= ---------
Net loss per share $ (8.71) $ (17.36)
========= =========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE> 5
LEHIGH ACRES FIRST NATIONAL BANCSHARES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999 AND
THE PERIOD FROM APRIL 14, 1998 (INCEPTION) TO SEPTEMBER 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Cumulative
Ended Through
September 30, 1999 September 30, 1999
------------------ ------------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(156,843) $(324,691)
Adjustments to reconcile net loss to net cash used in
operating activities:
Decrease (increase) in other assets 637 (1,360)
(Decrease) increase in accounts payable and accrued expenses (167,002) --
--------- ---------
Net cash used in operating activities (323,208) (326,051)
--------- ---------
Cash flows from investing activities:
(Increase) in deferred registration costs (23,319) --
--------- ---------
Net cash used in investing activities (23,319)
--------- ---------
Cash flows from financing activities:
Proceeds from issuance of common stock 179,000 180,000
Increase in Borrowings 122,000 152,000
--------- ---------
Net cash provided by financing activities 301,000 332,000
--------- ---------
Net increase (decrease) in cash (45,527) 5,949
Cash at beginning of period 51,476 --
--------- ---------
Cash at end of period $ 5,949 5,949
========= ---------
Supplemental disclosure of cash flow information:
Interest paid $ -- $ --
========= =========
</TABLE>
As of September 30, 1999, restricted cash increased $11,500 as a result of
subscriptions for common stock and corresponding deposits to the escrow account.
See accompanying notes to financial statements.
-5-
<PAGE> 6
LEHIGH ACRES FIRST NATIONAL BANCHSRES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Lehigh Acres First National Bancshares, Inc., (the "Company") was
incorporated for the purpose of becoming a bank holding company with
respect to a proposed de novo bank, Lehigh Acres First National Bank (the
"Bank") to be located in Lehigh Acres, Florida. The Company is in the
process of raising a minimum of $6,000,000 in an initial public stock
offering and will not commence banking operations until the minimum
offering (600,000 shares) is complete, regulatory approvals are obtained,
and the Bank is capitalized by the Company with at least $5,000,000.
As of September 30, 1999 the organizers as a group capitalized the Company
by acquiring 18,000 shares of Common Stock at $10.00 per share for a total
$180,000.
The interim financial statements included herein are unaudited but reflect
all adjustments which, in the opinion of management, are necessary for a
fair presentation of the financial position and results of operations for
the interim period presented. All such adjustments are of a normal
recovery nature. Operating results for the nine month period ended
September 30, 1999 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1999.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING. The accounting and reporting policies of the Company
conform to generally accepted accounting principles and to general
practices in the banking industry. The Company uses the accrual basis of
accounting by recognizing revenues when they are earned and expenses in
the period incurred, without regard to the time of receipt or payment of
cash. The Company has adopted a fiscal year that ends on December 31,
effective for the period ended December 31, 1999.
ORGANIZATION COSTS
Costs incurred for the organization of the Company and the Bank
(consisting principally of legal, accounting, consulting and incorporation
fees) are expensed as incurred.
DEFERRED OFFERING EXPENSES
Costs incurred in connection with the stock offering, consisting of
direct, incremental costs of the offering, are deferred and will be offset
against the proceeds of the stock sale as a charge to additional paid in
capital.
PRE-OPENING EXPENSES
Costs incurred for overhead and other operating expenses are included in
the current period's operating results.
PROFORMA NET LOSS PER COMMON SHARE
Proforma net loss per common share was calculated by dividing net loss by
the number (18,000) of common shares outstanding as of September 30, 1999.
(3) COMMITMENTS AND RELATED PARTY TRANSACTIONS
On June 10, 1999, the Company obtained a one-year, $250,000 line of credit
("LOC") at a floating rate of interest of prime less one percent. The LOC
was obtained in order to fund pre-operating activities. As of September
30, 1999, $122,000 has been drawn against the LOC.
In connection with the Company's formation and organization of its
subsidiary Bank, the Company has entered into an agreement with a bank
consulting firm. The agreement with the bank consulting firm estimates the
cost of its services to approximate $35,000 plus out of pocket expenses.
From inception (April 14, 1998) through September 30, 1999, the bank
consulting firm had been paid $36,361.
-6-
<PAGE> 7
On January 16, 1999, the Company entered into a consulting agreement
("Consulting Agreement II") with its CEO. Consulting Agreement II, which
replaced Consulting Agreement I, is for a term of up to fifteen months.
During the nine months ended September 30, 1999, the CEO was compensated
$51,000 pursuant to Consulting Agreement II.
Under an agreement dated June 26, 1998, an organizer was engaged to review
certain contracts, leases and documents relevant to the organization of
the Company. This organizer, upon a successful completion of the sale of
at least the minimum Offering (600,000 shares), will receive the sum of
$10,000 in consideration for services rendered. As of September 30, 1999,
no accrual was recorded and no payments had been paid with respect to this
agreement.
-7-
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD-LOOKING STATEMENTS
The following is a discussion of the Company's financial condition as of
and for the period ended September 30, 1999. These comments should be read in
conjunction with the Company's condensed consolidated financial statements and
accompanying footnotes appearing in this report.
This report contains "forward-looking statements" relating to, without
limitation, future economic performance, plans and objectives of management for
future operations, and projections of revenues and other financial items that
are based on the beliefs of the Company's management, as well as assumptions
made by and information currently available to the Company's management. The
words "may," "would," "could," "will," "expect," "anticipate," "believe,"
"intend," "plan," and "estimate," as well as similar expressions, are intended
to identify forward-looking statements. The Company's actual results may differ
materially from the results discussed in the forward-looking statements, and the
Company's operating performance each quarter is subject to various risks and
uncertainties that are discussed in detail in the Company's filings with the
Securities and Exchange Commission, including the "Risk Factors" section in the
Company's Registration Statement (Registration Number 333-81551) as filed with
and declared effective by the Securities and Exchange Commission.
FINANCIAL CONDITION
The Company is in the process of raising a minimum of $6,000,000 in an
initial public stock offering. When all regulatory applications are approved and
the minimum stock sale is successfully completed, the Company will acquire 100
percent of the voting stock of the Bank by injecting a minimum of $5.0 million
into the Bank's capital accounts.
A group of fourteen individuals advanced $210,000 to the Company in order
the fund the Company's pre-operating expenses. These funds were advanced
interest free. No imputed interest was charged to operations in the Company's
financial statement as of and for the period ended September 30, 1999. Of the
above advance of $210,000, on June 22, 1999, $180,000 was converted into 18,000
shares of the Company's common stock. Upon completion of the minimum offering
(600,000 shares), the Company intends to redeem the shares for $180.000.
At September 30, 1999, the Company had total assets of $18,809. These
assets consisted primarily of restricted cash of $11,500.
The Company's liabilities at September 30, 1999 were $163,500 and consisted
primarily of a note payable-line of credit and advances from organizers. The
Company had a stockholder's deficit of $144,691 at September 30, 1999.
The Company had a net loss of $156,843 for the nine months ended September
30, 1999, and $312,456 cumulatively from inception through September 30, 1999,
or a pro forma net loss of $8.71 per share for the quarter ended September 30,
1999 and $17.36 per share cumulatively since inception based on the actual
shares of 18,000 which were outstanding as of September 30, 1999. This loss
resulted from expenses incurred in connection with activities related to the
organization of the Company and the Bank. These activities included preparing
and filing an application with the OCC and the FDIC to charter the Bank and to
obtain deposit insurance, preparing an application with the Federal Reserve
Board for approval of the Company to acquire the Bank, responding to questions
and providing additional information to the OCC, the FDIC, and the Federal
Reserve Board in connection with the application process, preparing a prospectus
and filing a registration statement with the Securities and Exchange Commission
(the "SEC"), selling the Company's common stock, meetings and discussions among
various organizers regarding preopening issues, hiring qualified personnel to
work for the Bank, conducting public relation activities on behalf of the Bank,
developing prospective business contacts for the Bank and the Company, and
taking other actions necessary for a successful bank opening. Because the
Company is in the organizational stage, it had no operations from which to
generate revenues with the exception of interest earned on subscribers'
deposits.
-8-
<PAGE> 9
CAPABILITY OF DATA PROCESSING SOFTWARE TO ACCOMMODATE THE YEAR 2000
Like many financial institutions, we will rely upon computers for the
daily conduct of our business and for information systems processing. There is
concern among industry experts that on January 1, 2000, computers will be unable
to "read" the new year and there may be widespread computer malfunctions. We
will generally be relying on software and hardware developed by independent
third parties for our information systems.
We have entered into an agreement with M & I Data Services to provide
our core data processing software and services and our ATM services. We plan to
request and review testing and results from each of our vendors demonstrating
Year 2000 readiness and compliance. We have prepared a comprehensive Year 2000
Plan. Our chief executive officer will implement the plan with oversight from
our board of directors. The plan involves investigation of each vendor,
validation of each vendor's testing procedures and results, testing on our own
systems if reasonable, and receiving Year 2000 warranties from each of our
selected vendors. Based on our preliminary review of each vendor, we do not
believe that any of them have any significant Year 2000 problems. We will seek
to ensure that our agreements with our primary vendors include warranties
regarding Year 2000 compliance, although the remedies available under such
agreements include standard disclaimers of liability and specifically exclude
special, incidental, indirect, and consequential damages.
Our customers may also have Year 2000 issues. We may incur losses if
such issues affect our loan customers' ability to repay their loans or if they
suffer material harm to their businesses as a result. We intend to require
certification from each commercial borrower that their systems are Year 2000
compliant and that they do not expect to be adversely affected by the year
change. Although these certifications will be helpful, it would be very
difficult for us to accurately assess the Year 2000 readiness of any borrower.
We may therefore suffer loan losses from customers who have significant Year
2000 problems.
We anticipate opening the bank after January 1, 2000, at which time we
believe that most of the uncertainty surrounding the Year 2000 issue should be
resolved. In this event, our risks associated with computer malfunctions should
be greatly reduced, but we will still seek to ensure that our computer systems
and our major vendors' and clients' computer systems are in compliance and
functioning properly.
-9-
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Company
is a party or of which any of their property is the subject.
ITEM 2. CHANGES IN SECURITIES
(a) Not applicable
(b) Not applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to security holders for a vote during
the three months ended June 30, 1999.
ITEM 5. OTHER INFORMATION
On November 4, 1999, the U.S. Senate and House of Representatives each
passed the Gramm-Leach-Bliley Act, previously known as the Financial Services
Modernization Act of 1999. The Act is was signed into law by President Clinton
on November 12, 1999. Among other things, the Act repeals the restrictions on
banks affiliating with securities firms contained in sections 20 and 32 of the
Glass-Steagall Act. The Act also permits bank holding companies to engage in a
statutorily provided list of financial activities, including insurance and
securities underwriting and agency activities, merchant banking, and insurance
company portfolio investment activities. The Act also authorizes activities that
are "complementary" to financial activities.
The Act is intended to grant to community banks certain powers as a
matter of right that larger institutions have accumulated on an ad hoc basis.
Nevertheless, the Act may have the result of increasing the amount of
competition that the Company faces from larger institutions and other types of
companies. In fact, it is not possible to predict the full effect that the Act
will have on the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27.1 Financial Data Schedule (for SEC use only)
(b) Not applicable
-10-
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LEHIGH ACRES FIRST NATIONAL BANCSHARES CORPORATION
Date: November 18, 1999 By: /s/ Lloyd J. Weber
------------------------ ------------------------------------
Lloyd J. Weber
Chief Executive Officer
Date: November 18, 1999 By: /s/ Brenda M. O'Neil
------------------------ ------------------------------------
Brenda M. O'Neil
Chief Financial Officer
-11-
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF LEHIGH ACRES FIRST NATIONAL BANK FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 18,809
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 18,809
<DEPOSITS> 0
<SHORT-TERM> 152,000
<LIABILITIES-OTHER> 11,500
<LONG-TERM> 0
0
0
<COMMON> 180,000
<OTHER-SE> (144,691)
<TOTAL-LIABILITIES-AND-EQUITY> 18,809
<INTEREST-LOAN> 0
<INTEREST-INVEST> 598
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 598
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 598
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 157,441
<INCOME-PRETAX> (156,843)
<INCOME-PRE-EXTRAORDINARY> (156,843)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (156,843)
<EPS-BASIC> (8.71)
<EPS-DILUTED> (8.71)
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
