U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
------------------------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from____________to____________
Commission file number 333-86993
-----------------------
Smith River Bankshares, Inc.
(Exact name of small business issuer as specified in its charter)
Virginia 54-1956616
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Suite 12, Patrick Henry Mall
730 East Church Street, Martinsville, Virginia 24112
------------------------------------------------------------ ----------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (540) 632-8092
-------------------
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
Yes X No
--- ---
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: 689,368 shares as of July 31, 2000.
--------------------------------------
Transitional Small Business Disclosure Format: (Check one): Yes No X
----- ---
<PAGE>
SMITH RIVER BANKSHARES, INC.
Form 10-QSB
Index
PART I FINANCIAL INFORMATION
Page No.
-------
Item 1 Financial Statements 4 - 11
Item 2 Management's Plan of Operation 11 - 13
PART II OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds 13 - 14
Item 4 Submission of Matters to a Vote of Security Holders 14
Item 5 Other Information 15
Item 6 Exhibits and Reports on Form 8-K 15
Signatures 16
Index to Exhibits 17
2
<PAGE>
SMITH RIVER BANKSHARES, INC.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The financial statements filed as part of Item 1 of Part I are as follows:
1. Balance Sheet as of June 30, 2000 (unaudited)
2. Statements of Loss for the quarter, year-to-date, and
inception-to-date periods ended June 30, 2000 and for the quarter and
year-to-date periods ended June 30, 1999 (unaudited)
3. Statement of Shareholders' Deficit for the inception-to-date period
ended June 30, 2000 (unaudited)
4. Statements of Cash Flows for the year-to-date and inception-to-date
periods ended June 30, 2000 and for the year-to-date period ended June
30, 1999 (unaudited)
3
<PAGE>
SMITH RIVER BANKSHARES, INC.
(a Development Stage Enterprise)
Balance Sheet
(Unaudited)
June 30, 2000
ASSETS
Cash and due from banks $144,119
Deferred stock issuance costs 180,383
--------
Total current assets 324,502
Furniture, fixtures and equipment 74,402
Other assets 4,455
--------
Total Assets $403,359
========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $ 92,720
Advances from related parties 903,791
--------
Total Liabilities 996,511
Shareholders' equity:
Preferred stock, no par value, authorized ---
10,000,000 shares; none issued
Common stock, no par value, authorized
10,000,000 shares; issued and outstanding 12 shares 12
Deficit accumulated during the development stage (593,164)
--------
Total Shareholders' Deficit (593,152)
--------
Total Liabilities and Shareholders' Deficit $403,359
========
See accompanying notes to financial statements.
4
<PAGE>
<TABLE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statements of Loss
(Unaudited)
December 15, 1998
Three Months Six Months (Date of Inception)
Ended Ended Through
June 30, 2000 June 30, 2000 June 30, 2000
------------- -------------- --------------
<S> <C> <C> <C>
REVENUES
Interest income $ 44,259 $ 58,316 $ 63,756
Noninterest income --- 7,650 7,650
--------- ---------- ----------
Total income 44,259 65,966 71,406
--------- ---------- ----------
EXPENSES
Salaries and employee benefits 103,331 195,166 349,865
Occupancy expense, supplies and other 41,840 81,307 142,567
Professional fees 15,506 44,118 145,983
Regulatory application fees --- 880 26,155
--------- ---------- ----------
Total expenses 160,677 321,471 664,570
--------- ---------- ----------
Net Loss $(116,418) $ (255,505) $ (593,164)
========= ========== ==========
Per Share:
Basic:
Net Loss Per Share $ (9,702) $ (21,292) $ (49,430)
========= ========== ==========
Average Shares
Outstanding 12 12 12
Fully Diluted:
Net Loss Per Share $ (9,702) $ (21,292) $ (49,430)
========= ========== ==========
Average Shares
Outstanding 12 12 12
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
<TABLE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statements of Loss
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Ended
June 30, 1999 June 30, 1999
------------- -------------
<S> <C> <C>
REVENUES
Interest income $ 507 $ 1,586
Noninterest income --- ---
--------- ----------
Total income 507 1,586
--------- ----------
EXPENSES
Salaries and employee benefits 28,729 53,206
Occupancy expense, supplies and other 4,289 8,592
Professional fees 33,749 62,120
Regulatory application fees 15,000 17,525
--------- ----------
Total expenses 81,767 141,443
--------- ----------
Net Loss $ (81,260) $ (139,857)
========= ==========
Per Share:
Basic:
Net Loss Per Share $ (6,772) $ (11,655)
========= ==========
Average Shares
Outstanding 12 12
Fully Diluted:
Net Loss Per Share $ (6,772) $ (11,655)
========= ==========
Average Shares
Outstanding 12 12
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
<TABLE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statement of Shareholders' Deficit
(Unaudited)
For the Period December 15, 1998
(Date of Inception)
Through June 30, 2000
<CAPTION>
Deficit
Number Accumulated
Of During the Total
Common Common Development Shareholders'
Shares Stock Stage Deficit
------ ----- ----- -------
<S> <C> <C> <C> <C>
Issuance of common stock 12 $ 12 $ --- $ 12
Net loss since inception --- --- (593,164) (593,164)
---- ----- -------- ---------
Balances at
June 30, 2000 12 $ 12 $(593,164) $(593,152)
===== ===== ========= =========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
<TABLE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Statements of Cash Flows
(Unaudited)
<CAPTION>
December 15, 1998
(Date of
Six Months Inception) Six Months
Ended Through Ended
June 30, 2000 June 30, 2000 June 30, 1999
------------- ------------- -------------
Cash Flows From Operating Activities
<S> <C> <C> <C>
Net loss $(255,505) $(593,164) $ (139,857)
Depreciation 1,275 1,275 ---
(Increase) decrease in other assets 2,341 (4,455) (602)
Increase (decrease) in accounts payable
and accrued expenses (34,417) 92,720 34,357
--------- --------- ----------
Net cash used by operating activities (286,306) (503,624) (106,102)
--------- --------- ----------
Cash Flows from Investing Activities
Purchase of fixed assets (44,195) (75,677) (1,907)
--------- --------- ----------
Net cash used by investing activities (44,195) (75,677) (1,907)
--------- --------- ----------
Cash Flows From Financing Activities
Proceeds from advances from related parties 388,791 903,791 40,000
Proceeds from issuance of common stock --- 12 12
Costs of stock issuance (65,961) (180,383) (11,200)
--------- --------- ----------
Net cash provided by financing activities 322,830 723,420 28,812
--------- --------- ----------
Net increase (decrease) in cash (7,671) 144,119 (79,197)
Cash and due from banks at beginning of period 151,790 --- 110,040
--------- -------- ----------
Cash and due from banks at end of period $ 144,119 $ 144,119 $ 30,843
========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Notes to Financial statements
(Unaudited)
June 30, 2000
Note 1 - Summary of Accounting Policies
(a) General
The accompanying financial statements of Smith River Bankshares, Inc. are
unaudited. However, in the opinion of management, all adjustments necessary for
a fair presentation of the financial statements have been included. All
adjustments were of a normal recurring nature, except as otherwise disclosed
herein.
Smith River Bankshares, Inc. (the "Corporation" or "Bankshares") is a
development stage enterprise, incorporated as a Virginia corporation effective
January 14, 1999. The Corporation was primarily organized to serve as a bank
holding company for the proposed Smith River Community Bank, N.A. (the "Bank").
Prior to the organization of the Corporation, the Corporation's shareholders,
who are also the Organizers, formed FCNB LLC, a limited liability company, to
organize the Corporation and the Bank and provide for financing of
organizational, offering, and other pre-opening costs. The financial statements
reflect the operations of the Corporation and the LLC since the date of
formation, which was December 15, 1998. The Corporation has received final
approvals form the FDIC and the OCC. It has also received approval from the
State Corporation Commission and the Federal Reserve Bank of Richmond to acquire
the proposed Smith River Community Bank, N.A. The Bank opened July 24, 2000 and
began its operations as a full service commercial bank.
The Corporation raised $6,893,680 through a sale of its common stock and units.
The Corporation filed a registration statement on Form SB-2 to register the
stock, which was declared effective by the Securities and Exchange Commission on
November 4, 1999. Proceeds from the sale of the stock were primarily used to
acquire all of the stock of the Bank on July 24, 2000. Since the opening of the
Bank, the Corporation's operations have been conducted through the Bank.
In conjunction with the offering the Organizers purchased units instead of
shares only. Each unit contained one share of common stock and one common stock
warrant attached. The warrants will vest over a three-year period. Each warrant
entitles the holder to purchase one share of common stock for $10.
Based on current facts and circumstances, the Organizers believe that the
proceeds received from the offering, $6,893,680 will permit the Bank to conduct
its initial operations to invest in loans, securities, and other earning assets.
It could also provide for additional branch openings. Funds received from stock
subscriptions were held in an escrow account which was not available to the
Corporation as of June 30, 2000, and as such they are not reflected as assets in
the accompanying financial statements.
(b) Organization Costs
The American Institute of CPA's has issued Statement of Position 98-5,
"Reporting on the Costs of Start-Up Activities." In general, the SOP requires
that organizational and similar start-up costs be expensed. Examples of such
costs that have been incurred by the Corporation are legal fees, consulting
fees, and regulatory application fees. Prior to the effective date of the SOP,
generally accepted accounting principles permitted such costs to be capitalized
and amortized to expense. The Corporation adopted the requirements of the SOP
from its inception and has accordingly expensed all organization costs.
9
<PAGE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Notes to Financial statements
(Unaudited)
June 30, 2000
(c) Deferred Stock Issuance Costs
Costs totaling approximately $180,383 incurred through June 30, 2000 related to
registering and issuing the securities that were sold are included in the
balance sheet under "deferred stock issuance costs." Such costs are comprised
primarily of professional fees and securities registration fees, and will be
charged against paid-in-capital upon the successful completion of the stock
offering in the third quarter of 2000.
(d) Income Taxes
The Corporation is subject to federal and state income taxes. However, no taxes
have been accrued or paid because of operating losses incurred during the
development stage. Deferred tax assets have been fully offset by a valuation
allowance pursuant to Statement of Financial Accounting Standards No. 109.
(e) Use of Estimates
The presentation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note 2 - Advances From Related Parties
At June 30, 2000, the corporation had advances payable to related parties of
$903,791. These advances were for costs associated with the organization of the
Corporation and the Bank such as regulatory expenses, accounting fees, legal
fees, salaries, rent, consulting fees, etc. that are being borne by the LLC. The
Organizers of the LLC are also the directors of the Corporation. The Organizers
advanced all necessary costs before the successful completion of the offering.
The Corporation will reimburse the LLC for these expenses in the third quarter
of 2000.
Note 3 - Leases and Commitments
The Corporation has entered into a lease for administrative office space with a
term beginning May 1, 1999 and expiring in 39 months. Rent paid for the first
three months was $750 per month, and thereafter increased to $1,000 per month.
The Corporation may cancel the lease with 90 days notice.
The Corporation has also entered into separate leases for property to be used as
bank branches. One lease has a term of 36 months commencing August 1, 1999, and
requires a monthly rental of $2,500. The other lease has a term of 36 months
beginning when the branch begins operations. At that point, the monthly rental
will be $2,500. Prior to that date, interim monthly rent of $500 is being paid
beginning June 1999.
10
<PAGE>
SMITH RIVER BANKSHARES, INC.
(A Development Stage Enterprise)
Notes to Financial statements
(Unaudited)
June 30, 2000
The Corporation has entered into an employment agreement with its President and
Chief Executive Officer. The agreement has a three-year term and is
automatically extended by one year if not terminated at least 90 days prior to
each anniversary date. It provides for a base annual salary of $90,000.
Additionally, after operations begin, 30,000 stock options will be granted to
the officer. One-third of the options will become exercisable in each of the
three years following the inception of operations. The exercise price for all
such options will be the fair market value of the stock on the date of grant.
Under the terms of the agreement, the individual will continue in a consulting
capacity after the end of the period of employment. After the stock options are
issued, the Corporation will be subject to the requirements of Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation." Management does not believe the Standard will have a significant
impact on the financial statements of the Corporation.
Item 2. Management's Plan of Operations
General
-------
Smith River Bankshares, Inc. was incorporated on January 14, 1999 in the
Commonwealth of Virginia as First Community National BanCorp., Inc. On July 8,
1999, Restated Articles of Incorporation became effective changing the name to
Smith River Bankshares, Inc. The Corporation was formed for the primary reason
of becoming a bank holding company for the proposed Smith River Community Bank,
N.A., ( in Organization). The Corporation filed a registration statement on Form
SB-2 with the Securities and Exchange Commission, (the "Commission"), to
register the stock for a public offering. The registration statement was
declared effective by the Commission on November 4, 1999. Smith River
Bankshares, Inc. anticipated raising between $6,250,000 and $10,000,000 through
its initial public offering. Subject to the formation of Smith River Community
Bank, N.A., the Corporation anticipated buying all the stock of the Bank from
the proceeds of the offering. The business of the Corporation will be conducted
through the Bank. Smith River Bankshares, Inc. received approval from the
Federal Reserve Bank of Richmond on December 10, 1999 and from the State
Corporation Commission on December 18, 1999 to acquire Smith River Community
Bank, N.A. Smith River Bankshares, Inc. successfully completed the offering of
its common shares of stock in July 2000 and capitalized Smith River Community
Bank, N.A. The Bank received its final approvals from the Office of the
Comptroller of the Currency and the Federal Deposit Insurance Corporation in
July 2000 and opened for business on July 24, 2000.
Smith River Community Bank was organized under the National Bank Act as a
nationally chartered commercial bank and member of the Federal Reserve, whose
deposits are insured by the FDIC. The Bank applied for both the charter and
deposit insurance on March 31, 1999. Preliminary charter approval was received
from the Comptroller of the Currency on August 4, 1999 and preliminary approval
was received from the FDIC on September 14, 1999. As previously mentioned, the
Bank received final approvals from the Comptroller of the Currency and the
Federal Deposit Insurance Corporation on July 21, 2000 with permission to open
on July 24, 2000. The Bank has begun to accept deposits and make commercial,
real estate, and consumer loans. For the initial years, the Bank anticipates
that it will rely on local advertising and personal contacts of its directors,
employees, and shareholders to attract customers and business to the Bank. The
Bank plans to operate as a locally owned and operated commercial bank
emphasizing personal customer service and other advantages of banking with a
locally owned community bank.
11
<PAGE>
The primary source of funds for the Corporation has come from the Organizers who
are also the Corporation's directors. The Organizers formed FCNB LLC, a limited
liability company, to organize the Corporation and the Bank and to provide for
financing of organization, pre-opening, and offering expenses. The Organizers
continued to make advances for expenses until the completion of the offering.
The Corporation will use the proceeds from the offering also to repay the LLC
for the advances. Management believes that after reimbursing the LLC for such
expenses, the remaining funds will be sufficient to provide for the planned
capital expenditures and operating costs.
For the period ending June 30, 2000 from inception-to-date, the net loss for the
Corporation was $593,164 which equated to a net loss per share of $49,430. Total
expenses were $664,570 which was offset slightly by total income of $71,406,
which consisted primarily of interest income on money market accounts in
correspondent banks and interest earned on the subscription dollars held in
escrow. Of the total expenses, salaries and employee benefits were 52.6%;
professional fees were 22.0%; occupancy expense, supplies, and other expenses
were 21.5%; and regulatory application fees were 3.9%. The professional fees
consisted of accounting fees, legal fees, and fees associated with a corporation
engaged to aid in the regulatory process. Total assets at June 30, 2000 were
$403,359. Cash and due from banks were $144,119 and deferred stock issuance
costs were $180,383. Furniture, fixtures, and equipment purchased from inception
was $75,677 consisting primarily of a down payment on software and furniture for
the administrative offices. Accounts payable at June 30, 2000 was $92,720 and
advances from the Organizers were $903,791.
For the six months ended June 30, 2000, the Corporation had a net loss of
$255,505. Total expenses were $321,471 of which salaries and employee benefits
were 60.7%; professional fees were 13.7%, occupancy expense, supplies and other
expenses were 25.3%; and regulatory fees were 0.3%. Income for the six months
was $65,966 which was comprised primarily of interest from time balances with
correspondent banks and interest earned on the subscription dollars held in
escrow. For the six months ended June 30, 1999, the Corporation experienced a
net loss of $139,857. Total expenses were $141,443 of which salaries and
employee benefits were 37.6%; professional fees were 43.9%; occupancy expenses,
supplies and other expenses were 6.1%; and regulatory fees were 12.4%.
For the quarter ended June 30, 2000, the Corporation had a net loss of $116,418.
Total expenses were $160,677 of which salaries and employee benefits were 64.3%;
professional fees were 9.7%; and occupancy expense, supplies and other expenses
were 26.0%. Income for the quarter was $44,259 which was comprised primarily of
interest from time balances with correspondent banks and interest earned on the
subscription dollars held in escrow. For the quarter ended June 30, 1999, the
Corporation experienced a net loss of $81,260. Total expenses were $81,767 of
which salaries and employee benefits were 35.1%; professional fees were 41.3%;
occupancy expense, supplies and other expenses were 5.3%; and regulatory fees
were 18.3%.
The Corporation has entered into three leases for space, one of which is for the
executive offices, and the other two are for the main banking branch and a
second branch. The Corporation is currently paying monthly lease payments on all
three locations. Approximately $400,000 will be spent on the executive offices
and the main banking office which consists primarily of computers and software,
an ATM, proof machine, cabling and security equipment. It is estimated that
approximately $220,000 will be needed to renovate the second branch and purchase
an ATM and equipment.
The Corporation has also entered into an agreement with Unisys and four license
agreements with Information Technology, Inc. The agreements provide Bankshares
with data processing equipment, software, PC's, and file servers. The
Corporation has agreed to pay Unisys approximately $232,500 and Information
Technology, Inc. approximately $92,000. The Corporation has also entered into an
agreement with FiServ, Inc. to perform the daily application processing of the
Bank.
The Corporation currently employs fourteen individuals including the Chief
Executive Officer, the Chief Financial Officer, the Chief Lending Officer, and
three additional officers. Upon the opening of a planned second branch later in
2000, the number of employees will increase by approximately five.
12
<PAGE>
Income Taxes
------------
The Corporation is subject to both federal and state income taxes. The Bank,
however, will be subject to federal income taxes but not state income taxes. A
bank in Virginia is required to pay a franchise tax that is based on the capital
of the entity. Management does not believe that the Bank will be profitable
until at least the third full year of operations. Because of this and the start
up costs associated with the Bank, a substantial net loss may accumulate before
becoming profitable. Under current Federal tax laws, these net operating losses
will be available to offset future taxable profits. A net operating loss may be
carried forward for a period of up to 20 years to offset taxable income in those
years. This could reduce taxes in the initial years of profitability. If the
Bank should not become profitable, then it is unlikely that these tax benefits
will be realized; therefore, no tax benefit or provision has been recorded for
the inception-to-date period ended June 30, 2000.
Year 2000 Readiness
-------------------
The Year 2000 issue was not a problem for the Corporation. All equipment
purchased was Year 2000 compliant. Contracts have been signed with outside
vendors for software and data processing. These vendors experienced minimal
problems with the onset of the Year 2000. Management will continue to have
conversations with its vendors and service providers concerning this issue.
Also, with the opening of the Bank, management will have dialogue with customers
for assurances of their Year 2000 issues. The Corporation does not believe that
the Year 2000 will have any material impact on the current operation or
operations of the Bank once it is capitalized, receives its regulatory
approvals, and opens for business.
PART II Other Information
Item 2. Changes in Securities and Use of Proceeds
The Corporation filed a registration statement on Form SB-2 to register the
stock in conjunction with its initial public offering. The registration
statement was declared effective by the Commission on November 4, 1999. Smith
River Bankshares, Inc. began to accept subscriptions for investments in its
stock after the effective date of the registration statement. The subscription
dollars were being held in an escrow account until the successful completion of
the offering pursuant to the escrow agreement. The Corporation accepted
subscriptions for stock through July 31, 2000. The Corporation continued to
incur expenses for organizational, pre-opening, and offering expenses that were
being funded by advances from the Organizers until the successful completion of
the offering. These expenditures are disclosed in the accompanying financial
statements and the notes thereto and in Management's Plan of Operations in this
Form 10-QSB.
13
<PAGE>
Upon the completion of the offering of its common stock shares on July 31, 2000,
Smith River Bankshares, Inc. sold 689,368 shares of common stock for total
proceeds of $6,893,680. The use of proceeds as of July 31, 2000 are as follows:
Offering Proceeds $6,893,680
==========
Use of Proceeds by Smith River Bankshares, Inc.:
Offering expenses 180,383
Organizational expenses 241,188
Working capital 150,269
Capitalization of Smith River Community
Bank, N.A. through purchase of 100% of
the common stock of the Bank 6,321,840
----------
Total $6,893,680
==========
Use of Capital by Smith River Community Bank, N.A.:
Organizational and pre-opening expenses $ 461,959
Furniture, fixtures and equipment 76,966
Anticipated purchase of furniture, fixtures and equipment 553,000
Working capital 5,229,915
----------
Total $6,321,840
==========
Offering, organizational and pre-opening expenses exceeded original amounts
estimated primarily because the length of time taken to complete the offering
was longer than anticipated.
Item 4. Submission of Matters to a Vote of Security Holders
The Corporation held its annual meeting on Friday, the 16th of June, 2000. All
twelve shareholders and organizers as of that date were present at the meeting.
The following directors were re-elected and became the Class of 2003:
Jesse D. Cahill Elected As Director Unanimous Vote
Roxanne B. Miller Elected As Director Unanimous Vote
Jimmie R. Mills Elected As Director Unanimous Vote
Joe C. Philpott Elected As Director Unanimous Vote
The following directors' terms of office continued as follows:
J. E. Bassett Class of 2002
Mervyn R. King Class of 2002
Morton W. Lester Class of 2002
Cecil R. McCullar Class of 2002
Patricia H. Brammer Class of 2001
George R. Nelson Class of 2001
Douglas E. Riddle Class of 2001
Milford A. Weaver Class of 2001
14
<PAGE>
Item 5. Other Information
Smith River Bankshares, Inc. completed its offering of its shares of common
stock to the public on July 31, 2000. Total shares and units sold as of July 31,
2000 were 689,368 for total proceeds of $6,893,680. Prior to July 31, 2000, the
Corporation reached its minimum number of shares sold and was able to capitalize
the Bank. Smith River Community Bank, N.A. received its final approvals from the
Office of the Comptroller of the Currency and the Federal Deposit Insurance
Corporation on July 21, 2000 granting an opening date of July 24, 2000. The Bank
opened for business on July 24, 2000 and began accepting deposits and making
loans.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
See Index to Exhibits.
b) Reports on Form 8-K.
(1) Form 8-K filed July 14, 2000 regarding the
extension of Smith River Bankshares, Inc. public
offering of its common stock.
(2) Form 8-K filed July 24, 2000 regarding the receipt
of final approvals for the charter of Smith River
Community Bank, N.A.
15
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SMITH RIVER BANKSHARES, INC.
Date August 11, 2000 By /s/ Cecil R. McCullar
---------------------- -----------------------------
Cecil R. McCullar
President and Chief
Executive Officer
Date August 11, 2000 By /s/ Brenda H. Smith
---------------------- --------------------------
Brenda H. Smith
Senior Vice President and
Chief Financial Officer
16
<PAGE>
Index to Exhibits
Number Description of Exhibit
------ ----------------------
3(i)* Restated Articles of Incorporation of the Corporation, dated July
8, 1999.
3(ii)* By-laws of the Corporation, dated August 5, 1999.
4.1* Warrant Plan and Certificates as adopted July 27, 1999 and
amended August 26, 1999.
4.2 Provision in Registrant's Articles of Incorporation and Bylaws
defining the Rights of Holders of the Registrant's common stock
(included in Exhibits 3(i) and 3(ii), respectively).
4.3* Form of Shares Subscription Agreement.
4.4* Form of Units Subscription Agreement.
27 Financial Data Schedule.
---------------------------
* (Incorporated by reference to Registration statement #333-86993 on Form SB-2
filed September 13, 1999.)
