<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 2000
REGISTRATION NO. 333-30144
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--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
FUTURUS FINANCIAL SERVICES, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
------------------------------
<TABLE>
<S> <C> <C>
GEORGIA 6021 58-2485661
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
--------------------------
281 SOUTH MAIN STREET, SUITE 105A, ALPHARETTA, GEORGIA 30004 (770) 667-7899
(ADDRESS, AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
------------------------------
WINDWARD PARKWAY, ALPHARETTA, GEORGIA 30004
(ADDRESS OF PRINCIPAL PLACE OF BUSINESS OR INTENDED PRINCIPAL PLACE OF BUSINESS)
WILLIAM M. BUTLER
FUTURUS FINANCIAL SERVICES, INC.
281 SOUTH MAIN STREET, SUITE 105A
ALPHARETTA, GEORGIA 30004
(770) 667-7899
(NAME, ADDRESS, AND TELEPHONE NUMBER, OF AGENT FOR SERVICE)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
KATHRYN L. KNUDSON, ESQ. BOYD C. CAMPBELL, JR., ESQ.
POWELL, GOLDSTEIN, FRAZER & MURPHY LLP SMITH HELMS MULLISS & MOORE, LLP
191 PEACHTREE STREET, N.E., 16TH FLOOR 201 NORTH TRYON STREET, 30TH FLOOR
ATLANTA, GEORGIA 30303 CHARLOTTE, NORTH CAROLINA 28202
(404) 572-6600 (704) 343-2000
</TABLE>
--------------------------
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: as soon as practicable
after this Registration Statement has become effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Warrants to purchase common stock 208,000(1) $0 $0 $0
Common stock, no par value, issuable
upon the exercise of the warrants 208,000 $10.00(2) $2,080,000(3) $550(4)
</TABLE>
(1) Warrants to purchase an aggregate of 208,000 shares of common stock at an
exercise price of $10.00 per share will be issued to the organizers in
connection with this offering.
(2) Represents the exercise price per share for each warrant.
(3) Calculated in accordance with Rule 457(i) under the Securities Act of 1933,
as amended.
(4) Includes $528, which was previously paid to the Commission by the
Registrant.
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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PRELIMINARY PROSPECTUS DATED JULY 6, 2000; SUBJECT TO COMPLETION
The information contained 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 it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
1,100,000 SHARES
FUTURUS FINANCIAL SERVICES, INC.
A Proposed Bank Holding Company for
[LOGO]
FUTURUS BANK, N.A. (In Organization)
COMMON STOCK
$10.00 PER SHARE
---------------------
We are offering shares of Futurus Financial Services, Inc. common stock to
raise the money required to start Futurus Bank, N.A., a new national bank in
organization. Futurus Financial Services will be the holding company and sole
shareholder of Futurus Bank after it is organized. Futurus Bank will be
headquartered in Alpharetta, Georgia, and we expect to open Futurus Bank in the
fourth quarter of 2000. This is our first offering of common stock to the
public, and currently no public market exists for our shares. We will request
that quotations for our common stock be reported on the Nasdaq OTC Bulletin
Board under the symbol "FUTF."
The shares will be sold primarily by our officers and directors and our
sales agent, Wachovia Securities, Inc. The sales agent has agreed to use its
best efforts to sell the shares offered. We have agreed to pay the sales agent a
5% commission on shares its sells in the offering, plus reimbursement of $65,000
of the sales agent's costs and expenses. The offering is scheduled to end on
September 30, 2000, but we may extend the offering until February 1, 2001, at
the latest. The minimum purchase requirement is 100 shares.
We will place all the money we receive in the offering with The Bankers
Bank, an independent escrow agent, who will hold the money until we sell at
least 900,000 shares and Futurus Bank has either satisfied or is in a position
to satisfy all of the conditions upon which its preliminary approval from the
Office of the Comptroller of the Currency is contingent. If we do not meet with
these requirements before the end of the offering period, February 1, 2001, we
will return all funds to the subscribers with interest earned, if any.
This table summarizes the minimum and maximum proceeds that we expect to
receive from the offering and the maximum commissions that we would have to pay
if our sales agent sold approximately 100,000 shares offered by this prospectus.
--------------------------
<TABLE>
<CAPTION>
OFFERING MINIMUM OFFERING MAXIMUM
-------------------------- ---------------------------
PER SHARE TOTAL PER SHARE TOTAL
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Public offering price......................... $10.00 $9,000,000 $10.00 $11,000,000
Expected sales agent discount................. $ .06 $ 50,000 $ .05 $ 50,000
Proceeds to the company, before expenses...... $ 9.94 $8,938,000 $ 9.95 $10,938,000
</TABLE>
------------------------
Our organizers who purchase 20,000 or more shares of common stock in the
offering will receive warrants to purchase one share of common stock for each
share they purchase. Alternatively, organizers who purchase less than 20,000
shares in the offering will receive warrants to purchase one share of common
stock for every two shares they purchase. Once vested, our organizers may
exercise their warrants and purchase additional shares of common stock at an
exercise price of $10 per share. We describe the warrants in more detail under
the heading "Executive Compensation--Organizers' Warrants" on page 42.
We intend to provide individuals who purchase shares in the offering the
opportunity to open a founders checking account with Futurus Bank once it begins
its banking operations. By opening a founders checking account, the account
holder will be able to receive various banking services at either no charge or a
reduced charge. For example, we anticipate that founders checking accounts would
not be subject to any monthly maintenance fees for as long as the account holder
remains a shareholder of Futurus Financial Services.
OUR COMMON STOCK IS NOT A DEPOSIT OR A BANK ACCOUNT AND IS NOT INSURED BY
THE FDIC OR ANY OTHER GOVERNMENTAL AGENCY. AN INVESTMENT IN OUR COMMON STOCK
INVOLVES RISKS. YOU SHOULD NOT INVEST IN THIS OFFERING UNLESS YOU CAN AFFORD TO
LOSE ALL OF YOUR INVESTMENT. WE HAVE DESCRIBED WHAT WE BELIEVE ARE THE MATERIAL
RISKS OF THIS INVESTMENT UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE 8.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
, 2000
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
AND
FUTURUS BANK, N.A. (IN ORGANIZATION)
MARKET AREA
[MAP OF PRIMARY SERVICE AREA]
<PAGE>
SUMMARY
THIS SUMMARY DOES NOT CONTAIN ALL THE INFORMATION YOU SHOULD CONSIDER BEFORE
INVESTING IN THE COMMON STOCK. WE ENCOURAGE YOU TO READ CAREFULLY THE ENTIRE
PROSPECTUS BEFORE INVESTING. SEE PAGE 7 FOR INSTRUCTIONS ON HOW TO SUBSCRIBE FOR
SHARES.
FUTURUS FINANCIAL SERVICES AND FUTURUS BANK
Futurus Financial Services, Inc. is a Georgia corporation that was
incorporated on August 12, 1999 to organize and serve as the holding company for
Futurus Bank, N.A., a national bank in organization. Futurus Bank will operate
as a community bank emphasizing personalized banking relationships with
individuals and businesses predominantly located in the northern part of
Georgia's Fulton County, which includes the communities of Alpharetta, Windward,
Roswell, Northridge and Sandy Springs.
On February 14, 2000 we received preliminary approval from the Office of the
Comptroller of the Currency to organize Futurus Bank as a national bank in
Alpharetta, Georgia. In order to receive final approval of our application to
organize Futurus Bank, we will be required to raise a minimum of $8,500,000 in
capital, receive FDIC approval of our application for deposit insurance and
implement appropriate banking policies and procedures. On April 18, 2000 we
received preliminary approval from the FDIC for deposit insurance, and on
April 28, 2000 we received approval from the Federal Reserve to become a bank
holding company and to acquire all of the capital stock of Futurus Bank. After
receiving final regulatory approvals, we anticipate beginning operations at a
temporary facility in the fourth quarter of 2000, and we expect to move to our
permanent facility in the second quarter of 2001.
WHY WE ARE ORGANIZING A NEW BANK IN NORTHERN FULTON COUNTY
We believe an attractive opportunity exists in the northern Fulton County
market for a locally headquartered community bank that focuses on personalized
service to individuals and businesses located within our primary service area.
The northern Fulton County market is growing and has a highly diversified
economic base. For example, according to the Greater Northern Fulton Chamber of
Commerce, northern Fulton County's broad economic base ranges from large
corporations such as AT&T Corporation, Compaq Computer Corporation and United
Parcel Service of America, Inc., to an extensive variety of small businesses
that, when combined, comprise approximately 85% of the membership of the local
chamber of commerce. Northern Fulton County is also a popular retail destination
featuring North Point Mall, which, according to mall management, generated more
than $500 million in 1998 annual sales and had a traffic count of over
6.7 million vehicles in 1999.
We believe that northern Fulton County will support continued growth.
According to information compiled by CACI Marketing Systems, Inc., a marketing
research firm, during the nine-year period from 1990 to 1999 the population in
our primary service area grew from 160,592 to 221,864, representing a 38%
increase. Additionally, the United States Census Bureau estimates that over the
next five years average annual household income in the same area will increase
from $67,730 to $76,357. We anticipate that the area's expanding population and
expected growth in household income will increase the deposit base for our
primary service area.
According to the FDIC, bank and thrift deposits in Futurus Bank's primary
service area grew from approximately $2.3 billion in June 1995 to more than
$3.0 billion in June 1999. This multi-billion dollar deposit base is primarily
controlled by national and super-regional banks, which include Bank of America,
Wachovia, First Union, SunTrust and SouthTrust. Although these large financial
institutions are well established in the area, local community banks have been
successful in competing with these large banks for deposits. For example, based
on FDIC deposit information from June 1995 to June 1999, the combined relative
deposit market share for these large regional and super-regional banks has
decreased from 80.8% to 68.4%. During the same period, the combined relative
deposit market share of five community banks operating within our primary
service area increased from 10.1%
3
<PAGE>
to 20.4%. See "Proposed Business of Futurus Financial Services and Futurus
Bank--Market Opportunities--Competition" on page 25.
Although we expect community banks and thrifts operating within our market
area to compete directly with Futurus Bank, none of these community-oriented
competitors has a location within approximately three miles of our proposed main
office site. As a result, we believe that we have an opportunity to bring
community banking to an underserved, local market. See "Proposed Business of
Futurus Financial Services and Futurus Bank" on page 24.
We recognize that most of our competitors have substantially greater
resources and lending limits than Futurus Bank will have and provide other
services, such as extensive and established branch networks and trust services,
that Futurus Bank does not expect to provide initially. As a result of these
competitive factors, Futurus Bank may have to pay higher interest rates to
attract depositors or extend credit with lower interest rates to attract
borrowers.
DIRECTORS AND OFFICERS
Our management team is led by William M. Butler, the president and chief
executive officer of Futurus Financial Services and the proposed president and
chief executive officer of Futurus Bank. Mr. Butler has over 17 years of
experience in the banking industry and has served in various management
positions throughout his career with both Charter Bank & Trust, Marietta,
Georgia, and Bank South, Atlanta, Georgia. Our management team also includes R.
Wesley Fuller, the executive vice president and chief financial officer of
Futurus Financial Services and the proposed chief financial officer of Futurus
Bank, and Suzanne T. Phipps, the senior vice president of Futurus Financial
Services and the proposed chief lending officer and chief credit officer for
Futurus Bank. Mr. Fuller has over 16 years of experience in bank accounting and
operations, including managing the operations functions for Premier Bancshares
and Premier Bank. Ms. Phipps has approximately 12 years of credit and lending
experience and most recently served as a credit risk officer for Banc of America
Specialty Finance, Inc., an affiliated entity of Bank of America.
Our board of directors consists of our ten organizers who will also be the
directors of Futurus Bank. These directors include:
<TABLE>
<S> <C>
- William M. Butler - Gregory A. Janicki
- C. Parke Day - Richard W. Stimson
- Nathan E. Hardwick, IV - Donald S. Shapleigh, Jr.
- Michael S. Hug - Danny L. Tesney
- Deborah M. Janicki - Joel P. Weinbach
</TABLE>
Our directors intend to utilize their diverse backgrounds and their
extensive local business relationships to attract clients from all segments of
Futurus Bank's primary service area.
In addition, we expect to benefit from our potential referral relationship
with Real Estate Financial Services, Inc., a retail mortgage lending company
that is principally owned by two members of our board of directors, Gregory A.
Janicki and Deborah M. Janicki. Real Estate Financial Services has expressed an
interest in establishing a referral relationship with us, which may provide
Futurus Bank with an important source of new banking relationships with
individuals and businesses that are locating to the metropolitan Atlanta area
and help build our client base and loan portfolio.
Our directors have been divided into three classes and serve staggered
terms. As a result, roughly one-third of our directors will be elected each
year. One of the purposes for staggering our board, as well as having other
specific provisions in our articles of incorporation and bylaws, is to provide
our board of directors with the opportunity and flexibility to implement our
management philosophy and strategy, and to protect Futurus Financial Services'
interests. These provisions may have an effect of
4
<PAGE>
limiting our shareholders' ability to change the composition of our management
or discourage some takeover bids. See "Selected Provisions of the Articles of
Incorporation and Bylaws" on page 48.
PRODUCTS AND SERVICES
We plan to offer our products and services through high quality,
personalized delivery systems while providing our clients with the financial
sophistication and array of products typically offered by a larger bank. Futurus
Bank's lending services will include consumer loans, commercial loans to small-
to medium-sized businesses and professional concerns and real estate-related
loans. Futurus Bank will offer a broad array of deposit services including
demand deposits, regular savings accounts, money market deposits, certificates
of deposit and individual retirement accounts. We will also provide additional
services like ATM cards, debit cards, travelers checks, direct deposit,
automatic transfers and courier services for targeted commercial clients. We
intend to offer our services through a variety of delivery systems including
online banking, automated teller machines, telephone banking and, in the future,
additional branch offices.
PHILOSOPHY AND STRATEGY
Our management philosophy is to deliver superior service to our clients and
to create a banking experience that motivates them to tell others about Futurus
Bank. As part of our marketing effort, we will employ a "high tech, high touch"
theme to emphasize our commitment to complement our client-oriented service
approach with user-friendly technologies. We believe that this philosophy,
encompassing the service aspects of community banking with the perceived
convenience of larger banks, will distinguish Futurus Bank from its competitors.
To carry out our philosophy, our business strategy will involve:
- Positioning Futurus Bank's main office as a retail center rather than
merely a place to complete a banking transaction by providing both banking
and non-banking services that allow our clients to experience a new way of
banking.
- Utilizing technology and strategic outsourcers to provide a broad array of
convenient products and services.
- Hiring and retaining highly experienced and qualified banking personnel,
preferably with established client relationships, and viewing our staff
not as our employees, but as our associates.
- Positioning our main office in a highly visible location that is near a
large concentration of our targeted commercial and residential clients.
- Capitalizing on the directors' and officers' diverse community
involvement, professional expertise, and personal and business contacts
within our primary service area.
- Attracting our initial client base by offering highly competitive interest
rates on our deposit accounts.
- Providing individualized attention with consistent, local decision-making
authority.
- Implementing an aggressive marketing program.
- Capitalizing on industry consolidation within our primary service area.
THE OFFERING AND OWNERSHIP BY OUR ORGANIZERS AND DIRECTORS
We expect to sell between 900,000 and 1,100,000 shares in this offering at a
price of $10.00 per share and to raise between $9.0 million and $11.0 million in
gross proceeds. Our organizers and directors intend to purchase 218,000 shares,
which will represent 24.2% of the minimum shares offered
5
<PAGE>
and 19.8% of the maximum shares offered. To reward our organizers for their
financial risk and efforts in organizing Futurus Financial Services and Futurus
Bank, they will receive warrants to purchase shares of common stock at $10.00
per share. Organizers who purchase 20,000 or more shares of common stock in the
offering will receive warrants to purchase one share of common stock for each
share they purchase. Alternatively, organizers who purchase less than 20,000
shares in the offering will receive warrants to purchase one share of common
stock for every two shares they purchase.
We hope to sell the remaining shares to individuals and businesses primarily
within the Atlanta metropolitan area who share our desire to support a new
community bank. As our way of saying thank you to those individuals who purchase
shares of our common stock in the offering, we anticipate providing to these
individuals founders checking accounts with Futurus Bank once it begins its
banking operations. By opening a founders checking account, the account holder
will be able to receive various banking services at no charge or a reduced
charge. For example, we anticipate that founders checking accounts would not be
subject to any monthly maintenance fees for as long as the account holder
remains a shareholder of Futurus Financial Services.
The 900,000 minimum and the 1,100,000 maximum shares of common stock offered
do not include the 208,000 shares issuable upon the exercise of the warrants to
be issued to our organizers or 110,000 shares that we may issue under our stock
incentive plan.
USE OF PROCEEDS
We will use the first $8,500,000 raised in this offering to capitalize
Futurus Bank. This is the amount of capital that our banking regulators will
require us to invest in Futurus Bank prior to its opening. We will use the
remaining net proceeds of this offering to repay the amount drawn on our line of
credit, to provide Futurus Financial Services with working capital and for other
general business purposes. Additionally, Futurus Bank will use the funds that it
receives from Futurus Financial Services to lease the site for its main office,
to construct and furnish the facility and to provide working capital to operate
Futurus Bank. For more detailed information, see "Use of Proceeds" on page 17.
WE WILL HOLD THE SUBSCRIPTION FUNDS IN ESCROW
Because we cannot open Futurus Bank without final regulatory approvals, we
will place all the proceeds received from the offering with an independent
escrow agent, The Bankers Bank, Atlanta, Georgia. As escrow agent, The Bankers
Bank will hold these funds until we raise a minimum of $9.0 million and Futurus
Bank has either satisfied or is in a position to satisfy all of the conditions
upon which its preliminary approval from the Office of the Comptroller of the
Currency is contingent. We currently intend to close the offering on
September 30, 2000, but may extend the offering until February 1, 2001. If we
fail to meet the minimum escrow amount or if Futurus Bank fails to satisfy all
of the conditions upon which its preliminary approval is contingent, our escrow
agent will promptly refund your subscription in full with interest earned, if
any.
WE WILL USE A SALES AGENT TO SELL SHARES IN THE OFFERING
Due to current market conditions, we have restructured the offering from a
firm commitment offering to a best efforts offering. By doing so, we believe
that we will ultimately be able to reduce our overall costs by offsetting our
organizational and pre-opening expenses with the savings that we expect to
obtain by actively participating in and managing the selling process. We have
continued, however, to retain Wachovia Securities, Inc. as our sales agent to
sell shares in the offering.
We have agreed to pay the sales agent a 5.0% commission on shares it sells
in the offering. We estimate that our sales agent will sell approximately
100,000 shares, resulting in commissions of approximately $50,000. We will also
reimburse the sales agent for $65,000 of its costs and expenses relating to the
offering.
6
<PAGE>
HOW TO SUBSCRIBE
If you wish to subscribe for shares you should:
- Complete, date, and execute the subscription form delivered with this
prospectus;
- Make a check, bank draft, or money order payable to "The Bankers Bank,
Escrow Agent for Futurus Financial Services, Inc." in the amount of $10.00
multiplied by the number of shares for which you subscribed; and
- Deliver the completed subscription form and check to:
<TABLE>
<S> <C> <C> <C>
By Hand: Futurus Financial By Futurus Financial
Services, Inc. Mail: Services, Inc.
281 South Main Street P.O. Box 1145
Suite 105A Alpharetta, Georgia 30009
Alpharetta, Georgia 30004 Attention: William M. Butler
Attention: William M. Butler
</TABLE>
If you have any questions about the offering or how to subscribe, please
call William M. (Bill) Butler or R. Wesley Fuller at Futurus Financial
Services, Inc. at (770) 667-7899 or Gregory A. (Greg) Janicki at Real Estate
Financial Services, Inc. at (770) 642-2323. You should retain a copy of the
completed subscription form for your records. The subscription price is due and
payable when the subscription form is delivered. All subscriptions will be
irrevocable until the close of the offering. See "The Offering" on page 15 for
more information.
LOCATION OF OFFICES
The address and phone number of our temporary executive offices are:
281 South Main Street
Suite 105A
Alpharetta, Georgia 30004
(770) 667-7899
Our permanent main office and executive offices will be located at:
Windward Parkway
Alpharetta, Georgia 30004
Our main office will be a building with approximately 7,100 square feet
located on a 1.35 acre site that is one-half mile west of Georgia Highway 400 on
Windward Parkway. We anticipate that construction of our main office will begin
once we have raised a minimum of $9.0 million. Once construction begins, we
expect that our main office will be completed within four to six months. Until
our main office is completed, we plan to begin our operations in a temporary
facility that will be located approximately three miles from our permanent site.
Our temporary facility will be located in the Alpharetta Square shopping center
just south of the Alpharetta Highway (also known as South Main Street) and Old
Milton Parkway intersection. We anticipate that we will open for business in our
temporary facility in the fourth quarter of 2000.
7
<PAGE>
RISK FACTORS
THE FOLLOWING PARAGRAPHS DESCRIBE WHAT WE BELIEVE ARE THE MATERIAL RISKS OF
AN INVESTMENT IN THE COMMON STOCK. WE MAY FACE OTHER RISKS AS WELL, WHICH WE
HAVE NOT ANTICIPATED. AN INVESTMENT IN THE COMMON STOCK INVOLVES A SIGNIFICANT
DEGREE OF RISK, AND YOU SHOULD NOT INVEST IN THE COMMON STOCK UNLESS YOU CAN
AFFORD TO LOSE YOUR ENTIRE INVESTMENT. BEFORE DECIDING TO INVEST IN THE COMMON
STOCK, PLEASE CAREFULLY READ THE ENTIRE PROSPECTUS, INCLUDING THE CAUTIONARY
STATEMENT FOLLOWING THE RISK FACTORS REGARDING THE USE OF FORWARD-LOOKING
STATEMENTS.
WE HAVE NO OPERATING HISTORY UPON WHICH TO BASE AN ESTIMATE OF OUR FUTURE
FINANCIAL PERFORMANCE.
We do not have any operating history on which to base any estimate of our
future earning prospects. Futurus Financial Services was only recently formed,
and Futurus Bank will not receive final approval from the Office of the
Comptroller of the Currency to begin operations until after this offering is
completed. Consequently, you will not have access to historical information that
would be helpful in deciding whether to invest in Futurus Financial Services.
WE EXPECT TO INCUR LOSSES INITIALLY, AND YOU MAY NOT RECOVER ALL OR ANY PART OF
YOUR INVESTMENT IF WE DO NOT BECOME PROFITABLE.
Most new banks incur substantial start-up expenses, are not profitable in
the first year of operation and, in some cases, are not profitable for several
years. If we are ultimately unsuccessful, you may not recover all or any part of
your investment in the common stock. Additionally, Futurus Bank's loans will
initially be unseasoned--new loans to new borrowers. As a result, it will take
several years to establish the borrowers' payment histories, making it more
difficult to evaluate reliably the quality of the loan portfolio. Our
profitability will depend on Futurus Bank's profitability, and we can give no
assurance that Futurus Bank will ever operate profitably. Since this is our
first offering, our auditors have included in their audit report a statement
that absent the completion of the offering, there is doubt that we will have the
ability to continue as a going-concern. See "Management's Discussion and
Analysis of Financial Condition and Plan of Operations" on page 21.
FAILURE TO IMPLEMENT OUR BUSINESS STRATEGIES MAY ADVERSELY AFFECT OUR FINANCIAL
PERFORMANCE.
If we cannot implement our business strategies, we will be hampered in our
ability to develop business and serve our clients, which could in turn have an
adverse effect on our financial performance. The organizers have developed a
business plan that details the strategies that we intend to implement in our
efforts to achieve profitable operations. Our business strategies include
establishing a "high tech, high touch" niche, positioning our main office as a
retail center, hiring highly qualified associates and opening our strategically
located, full service office by the second quarter of 2001. Even if our business
strategies are successfully implemented, they may not have the favorable impact
on operations that we anticipate. See "Proposed Business of Futurus Financial
Services and Futurus Bank--Philosophy and Strategy" on page 26.
DEPARTURES OF OUR KEY PERSONNEL OR DIRECTORS MAY IMPAIR OUR OPERATIONS.
If any of our executive officers were to leave Futurus Bank, our operations
could suffer due to the costs associated with recruiting new personnel and
orienting them to our business. Particularly, we believe William M. Butler is
important to our success, and if he terminates his employment with us, our
financial condition and results of operations may be adversely affected.
Mr. Butler has been instrumental in our organization and will be the key
management official in charge of our daily business operations. While we have
entered into a three-year employment agreement with Mr. Butler we cannot be
assured of his continued service.
8
<PAGE>
Additionally, our directors' community involvement, diverse backgrounds and
extensive local business relationships are important to our success. For
example, we expect to benefit from our potential relationship with Real Estate
Financial Services. If Mr. or Mrs. Janicki, the owners of Real Estate Financial
Services, or any of our other directors discontinue his or her relationship with
us for whatever reason, or if the composition of our board of directors changes
materially, our growth could be adversely affected. See "Management" on
page 34.
A DELAY IN BEGINNING FUTURUS BANK'S OPERATIONS WILL RESULT IN ADDITIONAL LOSSES.
A delay in the start of Futurus Bank's operations will increase pre-opening
expenses and postpone Futurus Bank's realization of potential revenues. This
could cause our accumulated deficit to increase as a result of continuing
operating expenses, such as salaries and other administrative expenses, coupled
with our lack of revenue. Although we expect to receive all final regulatory
approvals and to begin business in the fourth quarter of 2000, we can give no
assurance as to when, if at all, these events will occur.
IF REGULATORY CONDITIONS ARE NOT SATISFIED, WE MAY DISSOLVE AND LIQUIDATE AND
YOU MAY ONLY RECEIVE A PORTION, IF ANY, OF YOUR INVESTMENT.
If we do not receive final approval for Futurus Bank to start its banking
operations, we anticipate that we will dissolve Futurus Financial Services. If
we dissolve Futurus Financial Services after we have received the escrowed
funds, shareholders will receive only a portion, if any, of their original
investment because we will have used the proceeds of the offering to pay all
expenses of the offering, organizational and pre-opening expenses and capital
costs incurred through the time that Futurus Financial Services is finally
dissolved. Although we have applied for the requisite regulatory approvals to
begin banking operations, final approvals may not be granted in a timely manner,
if at all. The terms of escrow release are not conditioned upon the receipt of
final regulatory approvals. See "The Offering" on page 15.
WE WILL FACE STRONG COMPETITION FOR CLIENTS, ESPECIALLY FROM LARGE AND MORE
ESTABLISHED FINANCIAL INSTITUTIONS, WHICH MAY HINDER US FROM OBTAINING CLIENTS
AND MAY CAUSE US TO PAY HIGHER INTEREST RATES ON OUR DEPOSITS OR CHARGE LOWER
INTEREST RATES ON OUR LOANS THAN OUR COMPETITORS' RATES FOR AN EXTENDED PERIOD.
We anticipate offering very competitive loan and deposit rates as we
establish ourselves in the market, but if excessive competition forces us to
offer more aggressive pricing indefinitely, our net interest margin will suffer
and our financial performance will be negatively impacted. Futurus Bank will
compete with numerous other lenders and deposit-takers, including other
commercial banks, savings and loan associations, credit unions, finance
companies, mutual funds, insurance companies and brokerage and investment
banking firms. With multiple financial institutions already doing business in
the northern Fulton County area, and given the chance that additional
competitors may enter the market in the future, we will be faced with continuous
competition. Moreover, some of these competitors are not subject to the same
degree of regulation as we will be and may have greater resources than will be
available to us. Competition from non-traditional financial institutions may
also affect our success due to the Gramm-Leach-Bliley Act of 1999. See "Proposed
Business of Futurus Financial Services and Futurus Bank--Market
Opportunities--Competition" on page 25.
WE MAY NOT BE ABLE TO COMPETE WITH OUR LARGER COMPETITORS FOR LARGER CLIENTS
BECAUSE OUR LENDING LIMITS WILL BE LOWER THAN THEIRS.
Our lending limit will be significantly less than the limits for most of our
competitors, and may hinder our ability to establish relationships with larger
businesses in our market area. A national bank's legal lending limit to a single
borrower is roughly equal to 15% of its capital and surplus plus an
9
<PAGE>
additional 10%, if the amount that exceeds 15% is fully secured by readily
marketable collateral. Based on Futurus Bank's proposed capitalization, Futurus
Bank's initial legal lending limit will be approximately $1,150,000 for loans
not fully secured plus an additional $750,000, or an estimated total of
$1.9 million, for loans that meet the federal guidelines. These legal limits
will increase or decrease as Futurus Bank's capital increases or decreases as a
result of its earnings or losses, among other reasons. Our management team has
also adopted an internal lending limit of $1.0 million, which will initially be
lower than the applicable legal limit. Based on either our internal lending
limit or our legal lending limit, Futurus Bank will need to sell participations
in its loans to other financial institutions in order to meet the lending needs
of our clients requiring extensions of credit above these limits. However, our
strategy to accommodate larger loans by selling participations in those loans to
other financial institutions may not be successful. See "Proposed Business of
Futurus Financial Services and Futurus Bank--Lending Services--Lending Limits"
on page 29.
GOVERNMENT REGULATION MAY HAVE AN ADVERSE EFFECT ON OUR PROFITABILITY AND
GROWTH.
We are subject to extensive government supervision and regulation. Our
ability to achieve profitability and to grow could be adversely affected by
state and federal banking laws and regulations that limit the manner in which we
make loans, purchase securities and pay dividends. These regulations are
intended primarily to protect depositors, not shareholders. In addition, the
burden imposed by federal and state regulations may place us at a competitive
disadvantage compared to competitors who are less regulated. Future legislation
or government policy may also adversely affect the banking industry or our
operations. In particular, various provisions of the Gramm-Leach-Bliley Act,
which took effect on March 11, 2000, eliminate many of the federal and state law
barriers to affiliations among banks and securities firms, insurance companies
and other financial services providers. We believe the elimination of these
barriers may significantly increase competition in our industry. See
"Supervision and Regulation" on page 54.
CHANGES IN INTEREST RATES MAY DECREASE OUR NET INTEREST INCOME.
Our profitability depends substantially on Futurus Bank's net interest
income, which is the difference between the interest income earned on its loans
and other assets and the interest expense paid on its deposits and other
liabilities. A large change in interest rates may significantly decrease our net
interest income and eliminate our profitability. Most of the factors that cause
changes in market interest rates, including economic conditions, are beyond our
control. While we intend to take measures to minimize the effect that changes in
interest rates will have on our net interest income and profitability, these
measures may not be effective. See "Management's Discussion and Analysis of
Financial Condition and Plan of Operations--Liquidity and Interest Rate
Sensitivity" on page 22.
AN ECONOMIC DOWNTURN, ESPECIALLY ONE AFFECTING OUR PRIMARY SERVICE AREA, MAY
REDUCE OUR DEPOSIT BASE AND THE DEMAND FOR OUR LOANS AND OTHER PRODUCTS AND MAY
DECREASE OUR EARNINGS.
As a holding company for a community bank, our success will depend on the
general economic condition of the region in which we operate, which we cannot
forecast with certainty. Unlike many of our larger competitors, the majority of
Futurus Bank's borrowers and depositors will be individuals and small- to
medium-sized businesses located or doing business in Georgia's Fulton, Forsyth,
Cobb and Gwinnett counties. As a result, our operations and profitability may be
more adversely affected by a local economic downturn than those of our larger,
more geographically diverse competitors. Factors that adversely affect the
economy in these counties could reduce our deposit base and the demand for our
products and services, which may decrease our earnings. For example, an adverse
change in the local economy could make it more difficult for borrowers to repay
their loans, which could lead to loan losses for Futurus Bank. See "Proposed
Business of Futurus Financial Services and Futurus Bank" on page 24.
10
<PAGE>
OUR ABILITY TO PAY DIVIDENDS TO OUR SHAREHOLDERS IS LIMITED AND DEPENDS ON
FUTURUS BANK'S ABILITY TO PAY DIVIDENDS AND THE JUDGMENT OF OUR BOARD OF
DIRECTORS.
Futurus Financial Services will initially have no source of income other
than dividends that it receives from Futurus Bank. Our ability to pay dividends
will depend on Futurus Bank's ability to pay dividends to Futurus Financial
Services. Additionally, bank holding companies and national banks are both
subject to significant regulatory restrictions on the payment of cash dividends.
In light of these restrictions and our plans to build capital, it will be our
policy to reinvest earnings for an undetermined period of time. As a result, we
do not plan to pay dividends until we recover any losses that we may have
incurred and become profitable. Our future dividend policy will depend on our
earnings, capital requirements, financial condition and other factors that the
boards of directors of Futurus Financial Services and Futurus Bank consider
relevant. See "Dividends" on page 20.
WE DETERMINED THE PUBLIC OFFERING PRICE ARBITRARILY, AND OUR FUTURE STOCK PRICE
MAY FLUCTUATE BELOW THE INITIAL PUBLIC OFFERING PRICE ONCE THE SHARES BECOME
FREELY TRADEABLE.
Futurus Financial Services arbitrarily set the public offering price after
considering prevailing market conditions and the price of comparable publicly
traded companies. Because we have no operating history, the public offering
price could not be based on historical measures of our financial performance.
Therefore, the public offering price may not reflect the market price for the
common stock after the offering. Several factors will cause the market price to
fluctuate after the offering, and the price for the common stock may drop below
its initial public offering price. These factors include our results of
operations, financial analysts' future estimates of our earning potential,
economic conditions in our market area and trends in the banking industry.
WE WILL NOT HAVE A LARGE NUMBER OF SHAREHOLDERS NOR A LARGE NUMBER OF SHARES
OUTSTANDING AFTER THE OFFERING, WHICH MAY LIMIT YOUR ABILITY TO SELL YOUR SHARES
OF COMMON STOCK.
Prior to the offering, there has been no public market for Futurus Financial
Services' common stock and the development of an active trading market normally
requires a significant number of shares and shareholders. We plan to issue a
minimum of 900,000 shares of our common stock in this offering. If an active
trading market does not develop or continue after the offering, you may not be
able to sell your shares at or above the price at which these shares are being
offered to the public. Although we have applied to list the common stock on the
Nasdaq OTC Bulletin Board, an active trading market may not develop or continue
after the offering. Additionally, the sale of a large block of shares
outstanding after the close of the offering could adversely affect the market
price of the common stock. We anticipate that our directors and executive
officers will purchase 223,250 shares or 24.8% of the minimum number of shares
offered, which will be subject to resale limitations of Rule 144 of the
Securities Act after the close of the offering. You should consider carefully
the limited liquidity of your investment before purchasing any shares of the
common stock. See "Shares Eligible for Future Sale" on page 53.
EXERCISE OF WARRANTS AND STOCK OPTIONS WILL CAUSE DILUTION OF YOUR OWNERSHIP IN
FUTURUS FINANCIAL SERVICES.
Our organizers and executive officers and other individuals employed by us
may exercise their warrants or options to purchase common stock, which would
result in the dilution of your proportionate interest in Futurus Financial
Services. If we sell 900,000 shares, the minimum number of shares being offered,
we expect that shareholders who are not directors or executive officers of
Futurus Financial Services will own a minimum of 676,750 shares, or
approximately 75.2%, of our outstanding common stock. Upon completion of this
offering, however, we will issue to our organizers warrants to purchase a total
of up to 208,000 shares of common stock, and will issue to our executive
officers, under our stock incentive plan, options to purchase up to a total of
47,500 shares of common stock. If
11
<PAGE>
these warrants and options granted to our organizers and executive officers were
exercised in full and if we sell the minimum number of shares offered by this
prospectus, the ownership percentage of our shareholders who are not directors
or executive officers would drop from 75.2% to 58.6% of our then outstanding
common stock. The warrants issued to our organizers will vest in one-third
annual increments over three years and will be exercisable at a price of $10.00
per share. The options issued to our executive officers will vest in one-fifth
annual increments over five years and will be exercisable at a price of $10.00
per share. The remaining 62,500 shares reserved for issuance under our stock
incentive plan may be granted to associates employed by us in a manner
consistent with the plan and on terms determined by our compensation committee
to be in our best interest. See "Executive Compensation" on page 40.
WE MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL ON TERMS FAVORABLE TO US, IF AT
ALL.
In the future, should we need additional capital to support our business,
expand our operations or maintain our minimum capital requirements, we may not
be able to raise additional funds through the issuance of additional shares of
common stock or other securities. Even if we are able to obtain capital through
the issuance of additional shares of common stock or other securities, the sale
of these additional shares could significantly dilute your ownership interest
and may be made at prices lower than the price we are selling shares in this
offering. In addition, the holders of warrants or options could exercise them at
a time when we could otherwise obtain capital by offering additional securities
on terms more favorable to us than those provided by the warrants or options.
OUR BOARD OF DIRECTORS IS AUTHORIZED TO ISSUE ADDITIONAL SHARES OF COMMON STOCK
AND SHARES OF PREFERRED STOCK WHICH, IF ISSUED, MAY DILUTE YOUR OWNERSHIP
INTEREST, REDUCE THE MARKET PRICE OF OUR COMMON STOCK AND ADVERSELY AFFECT YOUR
VOTING RIGHTS.
Our board of directors is authorized by our articles of incorporation to
issue additional shares of common stock and shares of preferred stock without
the consent of our shareholders. If we issue additional shares of common stock
after the close of the offering, your percentage interest in Futurus Financial
Services would be diluted. Additionally, preferred stock, when issued, may rank
senior to common stock with respect to voting rights, payment of dividends, and
amounts received by shareholders upon liquidation, dissolution or winding up.
The existence of rights that are senior to common stock may reduce the price of
our shares of common stock. Other than the issuance of common stock subject to
warrants and options granted to our organizers and executive officers, we do not
have any current plans to issue any shares of common stock or preferred stock
after the close of the offering.
OUR DIRECTORS AND OFFICERS COULD HAVE THE ABILITY TO INFLUENCE SHAREHOLDER
ACTIONS IN A MANNER THAT MAY BE ADVERSE TO YOUR PERSONAL INVESTMENT OBJECTIVES.
Together, our directors and executive officers may be able to influence the
outcome of directors elections or block a significant transaction, such as a
merger or acquisition, that might otherwise be approved by the shareholders. For
example, to be elected, a director nominee generally must receive more votes
than any other nominee for the same seat on the board of directors; a merger or
acquisition not adopted by two-thirds of our board of directors generally must
be approved by a two-thirds vote of shareholders; and, most other matters
generally require that more shares be voted for rather than against the
proposal. We anticipate that our directors and executive officers will directly
or indirectly own 223,250 shares or 24.8% of the minimum 900,000 shares offered
or 20.3% of the maximum 1,100,000 shares offered. Additionally, we will be
issuing warrants and options to our directors and executive officers. Although
these warrants and options will vest over time, if our directors and executive
officers exercised all of their warrants and options, they could directly or
indirectly own 478,750 shares, representing as much as 41.4% of our then
existing outstanding common
12
<PAGE>
stock. Consequently, our directors and executive officers, as a group, may hold
enough shares to effectively block a potential merger or acquisition, or any
other important matter requiring the affirmative vote of two-thirds of our
outstanding common stock, and may significantly influence the outcome of a vote
on any other matter. See "Selected Provisions of the Articles of Incorporation
and Bylaws" on page 48.
WE MAY NOT ALLOCATE ALL OF THE NET PROCEEDS IN THE MOST PROFITABLE MANNER.
After capitalizing Futurus Bank with $8.5 million, our board of directors
and management will have broad discretion in allocating a total of approximately
$180,000, if the minimum 900,000 shares are sold in the offering, or an
estimated $2.2 million, if the maximum 1,100,000 shares are sold in the
offering. Although we principally intend to use these proceeds to maintain
appropriate liquidity, we may also use these proceeds to provide additional
capital to Futurus Bank, to purchase United States government securities or
certificates of deposit of Futurus Bank or for other general corporate purposes.
Additionally, our anticipated allocation of these proceeds could change if we
are faced with unexpected liquidity issues. Because the allocation of these
proceeds will directly affect our earnings, it will be difficult to predict our
results of operations. Although we intend to utilize the funds to serve our best
interests, we cannot assure you that our allocation will ultimately reflect the
most profitable application of these proceeds. See "Use of Proceeds" on
page 17.
YOU MAY BE DEPRIVED OF AN OPPORTUNITY TO SELL YOUR SHARES AT A PREMIUM OVER
MARKET PRICES BECAUSE GEORGIA STATE LAW AND OUR ARTICLES OF INCORPORATION LIMIT
THE ABILITY OF OTHERS TO ACQUIRE US.
In many cases, shareholders receive a premium for their shares when a
company is purchased by another. Under Georgia law, however, no bank holding
company may acquire control of Futurus Financial Services until Futurus Bank has
been incorporated for five years. In addition, state and federal law and our
articles of incorporation make it difficult for anyone to purchase Futurus
Financial Services without approval of our board of directors. These provisions
include the existence of preferred stock, staggered terms for the directors,
restrictions on the ability to change the number of directors or to remove a
director, supermajority voting requirements, flexibility in considering
acquisition proposals and, for five years, limitations on an investor's ability
to own 10% or more of our voting stock. See "Selected Provisions of the Articles
of Incorporation and Bylaws" on page 48.
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<PAGE>
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements concerning Futurus
Financial Services and Futurus Bank and their operations, performance, financial
conditions and likelihood of success. Forward-looking statements are based on
many assumptions and estimates, and include statements about the competitiveness
of the banking industry, potential regulatory obligations, our business
strategies and other statements that are not historical facts. When used in this
prospectus, the words "may," "would," "could," "will," "expect," "anticipate,"
"believe," "intend," "plan" and "estimate," and similar expressions generally
identify forward-looking statements. Because forward-looking statements involve
risks and uncertainties that are beyond our control, actual results may differ
materially from those expressed in the forward-looking statements. The most
significant of these risks, uncertainties and other factors are discussed under
the heading "Risk Factors" beginning on page 8 of this prospectus. We urge you
to carefully consider these factors prior to making an investment in our common
stock.
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<PAGE>
THE OFFERING
GENERAL
We are offering for sale a minimum of 900,000 shares and a maximum of
1,100,000 shares of our common stock at a price of $10.00 per share to raise
gross proceeds of between $9.0 million and $11.0 million. The minimum purchase
for any investor is 100 shares of common stock, unless Futurus Financial
Services, in its sole discretion, accepts a subscription for a lesser number of
shares. The maximum purchase for any investor is 60,000 shares of common stock,
unless Futurus Financial Services, in its sole discretion, accepts a
subscription for a greater number of shares.
We will accept subscriptions to purchase shares until midnight, eastern
standard time, on September 30, 2000, unless we sell all of the shares earlier
or otherwise terminate or extend the offering. See "Conditions to the Offering
and Release of Funds" on page 15. Subscriptions will be binding on subscribers
and may not be revoked without our consent once we have accepted their
subscription checks, bank drafts, or money orders. We reserve the right to
terminate the offering at any time, or to extend the expiration date through
February 1, 2001. We will promptly notify subscribers of any extensions. If the
offering is extended, subscriptions we have already accepted will still be
binding.
We also reserve the right, in our sole discretion, to accept or reject any
subscription in whole or in part on or before the expiration date. If the
offering is over subscribed, we plan to give preference to subscribers who are
residents within our primary service area. We also reserve the right to accept
subscriptions on a first-come, first-served basis or on a prorated basis if we
receive subscriptions for more than 1,100,000 shares. We will notify all
subscribers within five business days after the receipt date of their
subscription checks, bank drafts, or money orders as to whether their
subscriptions have been accepted. If we do not accept all or a portion of a
subscription, we will also return the unaccepted portion of the subscription
funds, without interest.
In determining which subscriptions to accept we may take into account any
factors we consider relevant, including:
- the order in which subscriptions are received;
- a subscriber's potential to do business with or to direct customers to us;
and
- our desire to have a broad distribution of stock ownership.
We will issue certificates for shares which have been subscribed, accepted
and paid for promptly upon the satisfaction of the offering conditions and
release of the escrowed funds.
ORGANIZERS' SUBSCRIPTIONS
Our organizers intend to purchase at least 218,000 shares of common stock in
this offering. As a result, the organizers will own approximately 24.2% of the
outstanding common stock if we sell the minimum number of 900,000 shares in the
offering and 19.8% of the outstanding common stock if we sell the maximum number
of 1,100,000 shares in the offering. Although they have not promised to do so,
the organizers and affiliates of the sales agent may purchase additional shares
in the offering, up to 100% of the minimum offering if necessary, to complete
the offering.
CONDITIONS TO THE OFFERING AND RELEASE OF FUNDS
Initially, we will place all subscription proceeds we receive in an escrow
account maintained by The Bankers Bank as an independent escrow agent. The
escrow agent will not release these funds, and we will not issue any shares sold
in the offering, until we meet all of the following conditions:
- we have accepted subscriptions and payment in full for a minimum of
900,000 shares (which will result in gross offering proceeds of
$9.0 million); and
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<PAGE>
- Futurus Bank has either satisfied or is in a position to satisfy all of
the conditions upon which its preliminary approval from the Office of the
Comptroller of the Currency is contingent.
If we terminate the offering prior to satisfaction of these conditions or if
the conditions are not satisfied prior to the expiration of the offering, which
would be February 1, 2001 at the latest, then:
- we will cancel all subscription agreements and you will not receive shares
or become a shareholder of Futurus Financial Services; and
- we will return the full amount of all subscription funds promptly with
interest earned, if any, to you.
The escrow agent has not investigated or passed upon the merits of an
investment in our stock. The escrow agent will invest subscription funds at our
direction in interest-bearing savings accounts, short-term United States
Treasury securities, FDIC-insured bank deposits, or such other investments as we
agree on with the escrow agent. We do not intend to invest the subscription
proceeds held in escrow in instruments that would mature after the expiration
date of the offering.
PLAN OF DISTRIBUTION
We plan to sell a minimum of 900,000 shares of our common stock through our
officers and directors, without compensation, and have also entered into an
agreement with Wachovia Securities, Inc., as sales agent, to use its best
efforts to sell the offered shares to the public at the offering price of $10
per share. The sales agent will receive a 5.0% commission on shares it sells in
the offering. We will also reimburse the sales agent for $65,000 of its costs
and expenses relating to the offering. The sales agent may select to sell shares
through other broker-dealers who are members of the National Association of
Securities Dealers, Inc. Our agreement with the sales agent provides for us to
indemnify the sales agent against various liabilities in connection with this
offering, including liabilities under the securities laws.
We have reserved the right, in our sole discretion, to engage one or more
other broker-dealers as additional sales agents. We do not currently have
arrangements with any other broker-dealers other than Wachovia Securities, Inc.
MARKET FOR COMMON STOCK
As of the date of this prospectus, there is no public market for the shares.
Following the offering, we intend that the common stock be quoted on the OTC
Bulletin Board under the trading symbol "FUTF," and the sales agent intends to
act as a "market maker" in the common stock. However, we do not anticipate that
an active secondary market will develop for the shares anytime soon. Making a
market in securities involves maintaining bid and ask quotations and being able,
as principal, to effect transactions in reasonable quantities at those quoted
prices, subject to various securities laws and other regulatory requirements.
The development of a public secondary market depends on the existence of an
adequate number of willing buyers and sellers. We will have a relatively small
number of shareholders and shares outstanding and therefore may not have an
adequate number of buyers and sellers at any time. Based on our discussions with
the sales agent, we expect that a secondary market may eventually develop for
the shares, but we cannot be sure.
In general, if a secondary market does develop, the shares will be freely
transferable and assignable, and nonaffiliate shareholders may sell any number
of their shares. Shareholders who are affiliates, including officers, directors
and 10% shareholders, will have restrictions on their ability to resell shares
imposed by the securities laws. See "Shares Eligible for Future Sale" on
page 53. In addition, we cannot assure you that the "market maker" will continue
to maintain the secondary market for any specific length of time. This will
depend on many factors, including those beyond our control like the volume of
activity in the secondary market.
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<PAGE>
USE OF PROCEEDS
We expect to raise between $9.0 million and $11.0 million in this offering.
The following two tables summarize Futurus Financial Services' and Futurus
Bank's anticipated use of the proceeds which we receive in the offering. These
figures are estimates based on information currently available. Accordingly,
actual results may vary. To date, we have funded our organizational and
pre-opening expenses through a line of credit with The Banker's Bank in the
amount of $1,000,000 at 0.50% less than the prime rate, as published in the
Money Rates section of THE WALL STREET JOURNAL. In June 2000, we increased this
line of credit from $700,000 due to our incurring additional pre-opening and
organizational expenses. We intend to pay off this line of credit with proceeds
that we receive from this offering. The following two sections describe our
proposed use of proceeds based on our present plans and business conditions.
USE OF PROCEEDS BY FUTURUS FINANCIAL SERVICES
The following table shows the anticipated use of the proceeds by Futurus
Financial Services and is based on sale of the minimum number and maximum number
of shares being offered by this prospectus. We describe Futurus Bank's
anticipated use of proceeds in the following section.
<TABLE>
<CAPTION>
MINIMUM MAXIMUM
OFFERING OFFERING
--------------------------- -----------------------------
(900,000 SHARES) % (1,100,000 SHARES) %
---------------- -------- ------------------ --------
<S> <C> <C> <C> <C>
Gross proceeds from offering.................... $9,000,000 100.0 11,000,000 100.0
Expected sales agent commission................. $ 50,000 0.6 50,000 0.5
Organizational expenses......................... $ 50,000 0.6 50,000 0.5
Offering expenses............................... $ 220,000 2.4 220,000 2.0
Investment in capital stock of Futurus Bank..... $8,500,000 94.4 8,500,000 77.3
---------- ----- ---------- -----
Remaining proceeds.............................. $ 180,000 2.0 $2,180,000 19.8
========== ===== ========== =====
</TABLE>
As shown, we will use $8.5 million to capitalize Futurus Bank. We will
initially invest the remaining net proceeds in United States government
securities or deposit them with Futurus Bank. In the long-term, we will use
these funds for operational expenses and other general corporate purposes,
including the provision of additional capital to Futurus Bank, if necessary.
Although we do not have any specific plans for expansion, we may also use the
proceeds to open additional facilities or acquire other financial institutions
if deemed appropriate.
USE OF PROCEEDS BY FUTURUS BANK
The following table shows the anticipated use of the proceeds allocated to
Futurus Bank. These proceeds will be in the form of an investment in Futurus
Bank's common stock by Futurus Financial Services. During the period between the
opening of Futurus Bank and the completion of our permanent facility, we will be
conducting operations from a temporary facility. Futurus Bank will pay $1,750
per month for the temporary facility until July 31, 2000, at which time monthly
rent will increase to $1,800 per month. When completed, we will move into our
permanent facility at an initial base rent payment of $14,312.50 per month, plus
an initial monthly rental agency commission of $715.63. We expect that
construction of our permanent facility will begin once we have raised
$9.0 million in the offering, with the anticipated occupancy date for our main
office being within four to six months thereafter. Our permanent facility lease
payments, however, will begin in November 2000. The following table shows the
cost of the temporary and permanent facilities for a period of 12 months from
the expected completion of this offering. Leasehold improvements, furniture,
fixtures and equipment will be capitalized and amortized over the life of the
lease or over the estimated useful life
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<PAGE>
of the asset. Futurus Bank will use the remaining proceeds to make loans,
purchase securities and otherwise conduct business operations.
<TABLE>
<CAPTION>
PERCENTAGE OF
FUTURUS BANK'S
AMOUNT INITIAL CAPITALIZATION
---------- ----------------------
<S> <C> <C>
Investment by Futurus Financial Services in Futurus Bank's
common stock.............................................. $8,500,000 100.0%
Construction of our main office building, including
furniture, fixtures and equipment......................... $1,047,000(1) 12.3%
Pre-opening expenses........................................ 679,000 8.0%
Renovation of our temporary facility........................ $ 78,000 0.9%
Rental payments for temporary building facility (6
months)................................................... $ 10,800 0.1%
Rental payments for permanent building facility (11
months)................................................... $ 165,309 1.9%
----------
Remaining proceeds.......................................... $6,519,891 76.7%
==========
</TABLE>
------------------------
(1) We estimate that total construction costs for our main office building,
including furniture, fixtures and equipment, will be $1,497,000. However,
under our lease agreement with Pioneer Real Estate Development, Inc.,
Pioneer will be contributing $450,000 towards these construction costs.
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<PAGE>
CAPITALIZATION
The following table shows Futurus Financial Services' capitalization as of
March 31, 2000 and its pro forma consolidated capitalization, as adjusted to
give effect to the receipt of the net proceeds from the sale of a minimum of
900,000 shares and a maximum of 1,100,000 shares of common stock in the
offering.
Upon Futurus Financial Services' incorporation, Gregory A. Janicki, chairman
of the board of directors of Futurus Financial Services, purchased one share of
common stock at a price of $10.00. Futurus Financial Services will redeem this
share for $10.00 upon the issuance of shares in this offering. The number of
shares shown as outstanding after giving effect to the offering, and the book
value of those shares, do not include shares of common stock issuable upon the
exercise of the warrants held by the organizers or stock options issuable under
our stock incentive plan. For additional information regarding the number and
terms of these warrants and options, see "Executive Compensation--Organizers'
Warrants" and "--Stock Incentive Plan" on page 42.
<TABLE>
<CAPTION>
MARCH 31, 2000 MINIMUM MAXIMUM
SHAREHOLDERS' EQUITY ACTUAL AS ADJUSTED AS ADJUSTED
-------------------- -------------- ----------- -----------
<S> <C> <C> <C>
Preferred stock, no par value, 2,000,000
shares authorized; no shares issued or
outstanding.............................. -- -- --
Common stock, no par value, 10,000,000
shares authorized; 1 share issued and
outstanding; 900,000 and 1,100,000
shares, respectively, issued and
outstanding as adjusted(1)............... $ 10 $ 8,733,000 $10,733,000
Deficit accumulated during the development
stage.................................... (351,383)(2) (729,000)(3) (729,000)(3)
--------- ------------ -----------
Total shareholders' equity........... $(351,373) $ 8,004,000 $10,004,000
========= ============ ===========
Book value per share(4).................... N/A $ 8.89 9.09
========= ============ ===========
</TABLE>
------------------------
(1) The expenses of the offering will be charged against this account. We
estimate that the offering expenses will be $267,000, which includes $50,000
in expected sales agent commissions and $220,000 in other offering expenses,
including legal, accounting and printing expenses and registration fees.
(2) This deficit reflects pre-opening expenses incurred through December 31,
1999, consisting primarily of legal and consulting fees.
(3) The "As Adjusted" accumulated deficit results from estimated organizational
and pre-opening expenses of $729,000 incurred through Futurus Bank's target
opening date of November 1, 2000. Actual organizational and pre-opening
expenses may be higher and may therefore increase the deficit accumulated
during the pre-opening stage and further reduce shareholders' equity.
(4) After giving effect to the receipt of the net proceeds from this offering,
there is an immediate dilution in the book value per share of $1.11 if we
sell 900,000 shares and $.91 if we sell 1,100,000 shares, resulting from
recognition of organizational and pre-opening expenses and charging the
offering expenses against common stock.
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DIVIDENDS
Initially, we intend to retain all of our earnings to support our operations
and to expand our business. Additionally, we are subject to significant
regulatory restrictions on the payment of cash dividends. In light of these
restrictions and our need to retain and build capital, we do not plan to pay
dividends until we become profitable and recover any losses incurred during our
initial operations. Our payment of future dividends and our dividend policy will
depend on our earnings, capital requirements and our financial condition, as
well as other factors that our board of directors considers relevant. See
"Supervision and Regulation--Payment of Dividends" on page 59.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
PLAN OF OPERATIONS
Futurus Financial Services' financial statements and related notes, which
are included in this prospectus, provide additional information relating to the
following discussion of our financial condition. See "Index to Financial
Statements."
Futurus Financial Services was incorporated on August 12, 1999 to serve as a
holding company for Futurus Bank, N.A., a national bank in organization. Since
we organized, our main activities have been:
- seeking, interviewing and selecting our directors and officers;
- preparing our business plan;
- securing a line of credit;
- applying for a national bank charter;
- applying for FDIC deposit insurance;
- applying to become a bank holding company; and
- raising equity capital through this offering.
From our inception on August 12, 1999 up to the close of the offering,
Futurus Financial Services' operations have been and will continue to be funded
through a line of credit from The Bankers Bank. At December 31, 1999, the total
amount available on the line of credit was $500,000, of which $170,000 was drawn
down. In June 2000, the line of credit was increased to $1,000,000. Eight of our
ten organizers have guaranteed a portion of the line of credit. The line of
credit bears interest at 0.50% less than the prime rate, as published in the
Money Rates section of THE WALL STREET JOURNAL, and is due on June 5, 2001.
Futurus Financial Services plans to repay the line of credit after the close of
the offering.
FINANCIAL RESULTS
From August 12, 1999 through December 31, 1999, the net loss amounted to
$183,566. From August 12, 1999 through March 31, 2000, the net loss amounted to
$351,383. The estimated net loss for the period from August 12, 1999 through
November 1, 2000, the anticipated opening date of Futurus Bank, is $729,000,
which is attributable to the following estimated expenses:
<TABLE>
<S> <C>
Officer compensation........................................ $372,000
Legal, consulting and professional fees..................... 202,000
Other pre-opening expenses.................................. 155,000
--------
Total..................................................... $729,000
========
</TABLE>
OFFICES
On March 14, 2000, Futurus Financial Services entered into an agreement to
lease a 1.35 acre lot located on Windward Parkway, one-half mile west of Georgia
Highway 400. The leased property will be the site for our main office, which is
expected to have approximately 7,100 square feet of office space. We anticipate
that construction of our permanent facility will begin once we have raised
$9.0 million in the offering, with $450,000 of the estimated $1.5 million
construction costs being funded by the landlord, Pioneer Real Estate
Development, Inc. After Futurus Bank is capitalized, it will assume our lease
with Pioneer and will pay the remaining balance of the construction costs. The
term of the office lease is 12 years, with two five-year renewal options with
initial monthly rent being $14,312.50. In connection with the leased property,
Futurus Financial Services will pay an initial rental agency
21
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commission to The Myrick Company in the amount of $14,312.50, and is further
obligated to pay The Myrick Company 5% of all remaining rents, due monthly as
rent is paid. The Myrick Company is a real estate brokerage firm that we
retained to locate the site for our permanent facility and is unaffiliated with
Futurus Financial Services, our directors and executive officers. Our obligation
to The Myrick Company will be assumed by Futurus Bank.
Until our permanent facility is completed, we will conduct our operations in
a temporary facility, which is approximately three miles from our proposed
permanent location. Our temporary facility will be located in the Alpharetta
Square shopping center at 201 South Main Street, Alpharetta, Georgia, just south
of the Alpharetta Highway (also known as South Main Street) and Old Milton
Parkway intersection. The initial lease term for our temporary facility began
February 15, 2000 and ends July 31, 2000, at which time the lease will convert
to a month-to-month arrangement. Until July 31, 2000, Futurus Bank will pay
monthly rent in the amount of $1,750 for the temporary facility. After July 31,
2000, rent for our temporary facility will increase to $1,800 per month. We
expect to be open for business in our temporary facility in the fourth quarter
of 2000.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Since Futurus Financial Services has been in the organizational stage, there
are no results of operations to present at this time. Nevertheless, once Futurus
Bank begins operations, net interest income, Futurus Financial Services' primary
source of earnings, will fluctuate with significant interest rate movements. To
lessen the impact of these fluctuations, we intend to structure the balance
sheet so that repricing opportunities exist for both assets and liabilities in
roughly equal amounts at approximately the same time intervals. Imbalances in
these repricing opportunities at any point in time constitute interest rate
sensitivity.
Interest rate sensitivity refers to the responsiveness of interest-bearing
assets and liabilities to change in market interest rates. The rate sensitive
position, or "gap," is the difference in the volume of rate sensitive assets and
liabilities at a given time interval. The general objective of gap management is
to actively manage rate sensitive assets and liabilities in order to reduce the
impact of interest rate fluctuations on the net interest margin. We will
generally attempt to maintain a balance between rate sensitive assets and
liabilities as the exposure period is lengthened to minimize Futurus Bank's
overall interest rate risk.
We will regularly evaluate the balance sheet's asset mix in terms of several
variables:
- yield;
- credit quality;
- appropriate funding sources; and
- liquidity.
To effectively manage the balance sheet's liability mix, we plan to focus on
expanding our deposit base and converting assets to cash as necessary.
As Futurus Bank continues to grow, we will continuously structure its rate
sensitivity position in an effort to hedge against rapidly rising or falling
interest rates. Futurus Bank's asset and liability committee will meet on a
monthly basis to develop a strategy for the upcoming period.
Liquidity represents the ability to provide steady sources of funds for loan
commitments and investment activities, as well as to maintain sufficient funds
to cover deposit withdrawals and payment of debt and operating obligations. We
can obtain these funds by converting assets to cash or by attracting new
deposits. Futurus Bank's ability to maintain and increase deposits will serve as
its primary source of liquidity.
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<PAGE>
Other than this offering, we know of no trends, demands, commitments, events
or uncertainties that should result in or are reasonably likely to result in
Futurus Financial Services' liquidity increasing or decreasing in any material
way in the foreseeable future.
CAPITAL ADEQUACY
There are now two primary measures of capital adequacy for banks and bank
holding companies: (1) risk-based capital guidelines and (2) the leverage ratio.
The risk-based capital guidelines measure the amount of a bank's required
capital in relation to the degree of risk perceived in its assets and its
off-balance sheet items. Under the risk-based capital guidelines, capital is
divided into two "tiers." Tier 1 capital consists of common shareholders'
equity, noncumulative and cumulative perpetual preferred stock and minority
interests. Goodwill is subtracted from the total. Tier 2 capital consists of the
allowance for loan losses, hybrid capital instruments, term subordinated debt
and intermediate term preferred stock. Banks are required to maintain a minimum
risk-based capital ratio of 8.0%, with at least 4.0% consisting of Tier 1
capital.
The second measure of capital adequacy relates to the leverage ratio. The
Office of the Comptroller of the Currency has established a 3.0% minimum
leverage ratio requirement. The leverage ratio is computed by dividing Tier 1
capital into total assets. In the case of Futurus Bank and other banks that are
experiencing growth or have not received the highest regulatory rating from
their primary regulator, the minimum leverage ratio should be 3.0% plus an
additional cushion of at least 1% to 2%, depending upon risk profiles and other
factors.
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<PAGE>
PROPOSED BUSINESS OF FUTURUS FINANCIAL SERVICES AND FUTURUS BANK
BACKGROUND
FUTURUS FINANCIAL SERVICES. We incorporated Futurus Financial Services as a
Georgia corporation on August 12, 1999 to serve as a bank holding company that
will own 100% of the capital stock of Futurus Bank. Futurus Financial Services
plans to use $8.5 million of the net proceeds of this offering to purchase the
capital stock of Futurus Bank. Initially, we will have no business operations
other than owning and managing Futurus Bank.
On April 28, 2000, we received approval from the Federal Reserve to become a
bank holding company. We have chosen this holding company structure because we
believe it will provide flexibility that would not otherwise be available. With
a holding company structure, we may assist Futurus Bank in maintaining its
required capital ratios by borrowing money and contributing the proceeds of that
debt to Futurus Bank as primary capital. Additionally, under provisions of the
Gramm-Leach-Bliley Act, which took effect March 11, 2000, a holding company may
engage in activities that are financial in nature or incidental or complementary
to a financial activity, including some insurance transactions, real estate
development activities and merchant banking activities, in which Futurus Bank
will be prohibited from engaging. Although we do not presently intend to engage
in other activities, we will be able to do so with a proper notice or filing to
the Federal Reserve if we believe that there is a need for these services in our
market area, that we can be successful in these activities and that these
activities could be profitable. See "Supervision and Regulation--Futurus
Financial Services" on page 54.
FUTURUS BANK. On February 14, 2000 we received preliminary approval from
the Office of the Comptroller of the Currency to organize Futurus Bank. In order
to receive final approval, we will be required to raise a minimum of $8,500,000
in capital, receive approval of our application to the FDIC for deposit
insurance and implement appropriate banking policies and procedures. After
receiving all necessary regulatory approvals, we anticipate beginning operations
at a temporary facility in the fourth quarter of 2000, and we expect to move to
our permanent facility in the second quarter of 2001.
MARKET OPPORTUNITIES
PRIMARY SERVICE AREA. The boundaries for Futurus Bank's initial primary
service area are represented by the Fulton County/Forsyth County and Cherokee
County lines to the north, the Fulton County/Gwinnett County line to the east,
Interstate 285 to the south, and the Fulton County/Cobb County line to the west.
Accordingly, the primary service area represents a geographic area that includes
the Alpharetta, Windward, Roswell, Sandy Springs and Northridge communities in
northern Fulton County.
Futurus Bank will be located adjacent to the Windward development in
Alpharetta, Georgia, a focal point of Futurus Bank's primary service area. The
Greater North Fulton Chamber of Commerce has described Windward as one of
Atlanta's premier mixed-use developments and a unique environment in which to
live and work. Totaling more than 3,400 acres, Windward includes a 1,000-acre
business community. As estimated by the local Chamber of Commerce, there are
more than 13,000 people employed by businesses located in Windward, and the
residential area is home to more than 1,500 families. The Windward residential
community offers more than a dozen distinct neighborhoods, including a 195-acre
lake and two private golf courses.
LOCAL ECONOMY. Northern Fulton County is a significant focal point of
Atlanta's metropolitan area with its diversified economic base. This economic
base includes major operations of American Honda Motor Company, Inc., AT&T
Corporation, CibaVision Ltd., Compaq Computer Corporation, E*Trade
Securities, Inc., Equifax, Inc., GTE Corporation, Holiday Inn Worldwide,
Kimberly-Clark, Inc., Lucent Technologies, Inc., McKesson HBOC, Inc., Nortel
Communications, Siemens Energy & Automation, Inc. and United Parcel Service of
America, Inc. The presence of these corporations has
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fueled the growth of small businesses in northern Fulton County. According to
the Greater Northern Fulton Chamber of Commerce, the strength of the local
economy relies heavily on its large and highly diversified small business
community, which makes up approximately 85% of the Chamber's membership.
The characteristics of the individuals and small businesses in the primary
service area represent the type of client that Futurus Bank will target for its
client base. We believe that northern Fulton County represents a dynamic and
unique market with its well diversified and growing customer base. We also
believe that the primary service area presents an environment that will support
Futurus Bank's formation and growth. As a community bank, Futurus Bank will be
designed to serve the needs of the residents and small- to medium-sized
businesses within this growing economy. We believe continued economic growth in
the northern Fulton County market will be important to Futurus Bank's long term
success.
RETAIL. We believe a significant economic factor of the primary service
area is the presence of North Point Mall. The one-mile stretch of land located
east of Georgia Highway 400 between Mansell Road and Haynes Bridge Road
represents one of the largest commercial retail shopping areas in the Atlanta
metropolitan area. The largest shopping center in the area is North Point Mall,
which is anchored by six major department stores and 180 specialty shops. In
addition, ToysRUs, Service Merchandise, Target, major furniture stores, numerous
bank branches, movie theaters, eating establishments and commercial office
buildings are located in close proximity to North Point Mall.
POPULATION. Our primary service area represents a diverse market that
includes a growing population with numerous new and established residential
neighborhoods and small- to medium-sized businesses. Additionally, there are a
growing number of large employers continuing to relocate to the area. The
accessibility of Georgia Highway 400, sometimes referred to as "The Golden
Corridor," has been a key to the population growth and economic development of
northern Fulton County.
The cities of Alpharetta and Roswell represent an important part of Futurus
Bank's primary service area. According to estimates released by the United
States Census Bureau as recently as July 1, 1998, Alpharetta ranked first in
Georgia in terms of population growth between 1990 and 1998, with a percentage
increase of 91%, and Roswell ranked twelfth with a population increase of 19%.
The total population of the primary service area reported by the U.S. Census was
160,592 in 1990. According to CACI Marketing Systems, Inc., a marketing research
firm, this population figure was estimated to be 221,864 in 1999 and is
projected to reach 254,520 by 2004. Additionally, the median family income was
estimated by CACI to be $67,730 in 1999 and is projected to reach $76,357 by
2004.
COMPETITION. According to the FDIC, Bank and thrift deposits in Futurus
Bank's primary service area grew from approximately $2.3 billion in June 1995 to
more than $3.0 billion in June 1999. This multi-billion dollar deposit base is
primarily controlled by national and super-regional banks, which include Bank of
America, Wachovia, First Union, SunTrust and SouthTrust. Although these large
financial institutions are well established in the area, local community banks
have been successful in competing with these large banks for deposits. According
to the FDIC, the following trends occurred in deposit market share from
June 1995 to June 1999:
- Total deposits for the national and super-regional banks described above
grew 10.6%, compared to 30.6% growth in the overall deposit market.
- The slower relative growth of these large banks resulted in their combined
relative deposit market share falling from 80.8% to 68.4%.
- Five community-oriented banks operating in the service area during the
entire four-year period saw their total deposits grow 164.2%. These banks
included Bank of North Georgia, Milton
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<PAGE>
National Bank, which was acquired by BB&T in January 2000, Fidelity
National Bank, First Colony Bank and Tucker Federal Bank.
- These five community banks increased their combined relative deposit
market share from 10.1% to 20.4%.
In addition to offering competitive banking products, we believe that
community banks must provide personalized service and must make timely, local
decisions in order to compete successfully. We also believe that recent
acquisitions of several community banks in the Atlanta market may diminish the
quality of banking services available to small- and medium-sized businesses and
consumers in the market. Further consolidation is likely to create additional
opportunities for community banks to capture deposits from affected clients who
may be dissatisfied with their new financial institutions.
We will compete directly with many of the institutions previously named.
Additionally, two new start-up banks have established operations within our
primary service area since 1998. Although community banks and thrifts operating
within our market area will compete directly with Futurus Bank for banking
products and services, none of these community banking institutions has a
location within approximately three miles of our proposed main office site. As a
result, we believe that we have an opportunity to bring community banking to an
underserved, local market.
We recognize that most of our competitors have substantially greater
resources and lending limits than Futurus Bank will have and provide other
services, such as extensive and established branch networks and trust services,
that Futurus Bank does not expect to provide initially. As a result of these
competitive factors, Futurus Bank may have to pay higher interest rates to
attract depositors or extend credit with lower interest rates to attract
borrowers. However, we will attempt to minimize these competitive factors and
attract new banking relationships by offering our clients what we believe is a
new and innovative banking experience through our "high tech, high touch"
approach to community banking. For example, we intend to differentiate Futurus
Bank from our competitors primarily through our main office/retail center, our
significant involvement in the communities we serve, the quality of our
associates and our strategic application of current technologies that we
anticipate will make banking with Futurus Bank both convenient and enjoyable.
PHILOSOPHY AND STRATEGY
Our management philosophy is to deliver superior service to our clients and
to create a banking experience that motivates them to tell others about our
banking and non-banking services. As part of our marketing effort, we will
employ a "high tech, high touch" theme to emphasize our commitment to complement
our client-oriented service approach with user-friendly technologies. Futurus
Bank will adopt this philosophy to attract clients and acquire new deposits in
our market as well as deposits now controlled by other financial institutions in
our primary service area. Additionally, we believe that significant local
ownership and control will be a major factor in furthering our ability to
respond more efficiently to our clients' needs and will aid in Futurus Bank's
growth and success. To implement our philosophy and to grow and expand our
operations, we intend to put into practice the following strategies:
POSITION OUR MAIN OFFICE AS A RETAIL CENTER. Unlike most of our
competitors, we plan to have our main office be more than just a transactional
location with desks and teller stations. Specifically, we intend to position our
main office as a retail center that allows our clients to experience our banking
culture as well as to complete their banking business with us. Whether our
clients want to access the internet while enjoying our custom-blended coffee at
our Internet Cafe, watch the latest television broadcast of the day's stock
market activity at our Investment Center, let their children play in a specially
designed Kids' Center, or search the latest real estate listings at our Home
Center, we intend to create a memorable experience that will lead to long-term
client relationships and will continually attract new client relationships for
Futurus Bank.
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ADVANCED TECHNOLOGY. Futurus Bank intends to use advanced banking and
communications technology to deliver services that will match the level of
sophistication of Futurus Bank's anticipated client base. By positioning Futurus
Bank as a community bank committed to enhancing its service quality and
convenience through user-friendly technologies, we expect to establish
meaningful client relationships from both new and existing residents and
businesses in the area.
EXPERIENCED SENIOR MANAGEMENT. We are assembling a senior management team
that possesses extensive experience in the banking industry, as well as
substantial business and banking contacts in our market. For example, our
president and chief executive officer, William M. Butler, has over 17 years of
banking experience. See "Management" on page 34.
SKILLED ASSOCIATES. We will strive to hire highly trained and seasoned
staff that can bring with them existing client relationships established through
prior banking experience. By hiring associates with established client
relationships, Futurus Bank will be able to grow more rapidly than if we hired
associates who required time to develop a sufficient client base. Additionally,
we plan to train our associates to answer questions about all of our products
and services so that the first associate a client encounters will be able to
resolve all of the client's banking-related questions.
INDIVIDUAL CLIENT FOCUS. We will focus on providing individualized service
and attention to our clients, which will include individuals and small-to
medium-sized businesses. We will concentrate on establishing and maintaining
long-term client relationships by working to ensure that our clients have
positive banking experiences. As our associates, officers and directors become
familiar with each client on an individual basis, we will be able to respond to
credit requests more quickly and be more flexible in approving loans based on
collateral quality and personal knowledge of the client's banking needs.
HIGHLY VISIBLE SITE. Futurus Bank's main office location is highly visible
and near a large concentration of our targeted commercial business and
residential clients. We believe this will enhance Futurus Bank's image as a
strong competitor. Additionally, our nearest competing community bank is
approximately three miles away from our main office, providing us with what we
believe is a better opportunity to develop a community banking niche.
COMMUNITY-ORIENTED BOARD OF DIRECTORS. Our board of directors consists
primarily of long-time metropolitan Atlanta residents with extensive contacts in
our primary service area. The board of directors also represents a wide array of
business experience and community involvement, and their continued active
involvement will provide an opportunity to promote Futurus Bank and its products
and services. We anticipate that our directors will bring substantial business
and banking contacts to Futurus Bank as a result of their experience,
involvement and community standing.
OFFICER AND DIRECTOR CALL PROGRAM. We intend to implement an active officer
and director call program to promote Futurus Bank's philosophy. The purpose of
this call program will be to personally visit prospective clients, introduce
Futurus Bank's "high tech, high touch" philosophy and invite them to do business
with us.
PROPOSED RELATIONSHIP WITH REAL ESTATE FINANCIAL SERVICES. We expect to
benefit from our proposed referral relationship with Real Estate Financial
Services, a retail mortgage lending company that is principally owned by two of
our directors, Gregory A. Janicki and Deborah M. Janicki. Real Estate Financial
Services regularly refers consumer and commercial business to various financial
institutions located in the metropolitan Atlanta area. Once Futurus Bank begins
its operations, we anticipate that Real Estate Financial Services may be a
consistent and important source of new banking relationships, helping us to
build our client base. Additionally, because Real Estate Financial Services does
not generally fund commercial loans, consumer second mortgages, home equity
loans or home equity lines of credit, we believe that our relationship with Real
Estate Financial Services may also generate loan product leads for our lending
officers.
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LOCAL DECISION-MAKING. We will emphasize local decision-making with
experienced bankers and will focus on both associate retention and the delivery
of personal, professional and responsive service. If Futurus Bank expands into
other communities, it intends to maintain its policy of making decisions
locally. This will allow Futurus Bank to be more responsive to client requests
and to the needs of clients within the particular community.
MARKETING AND ADVERTISING. Futurus Financial Services has retained The
Stern Marketing Group, a national marketing firm located in Berkley, California,
to promote Futurus Bank and to develop its "high tech, high touch" image as a
technologically responsive, community-focused bank that emphasizes prompt,
professional and personalized service to individuals and businesses. Futurus
Bank will also sponsor various community activities in our primary service area
and will use media services such as local newspapers and direct mail campaigns
to promote its products and services.
CAPITALIZE ON TREND TOWARD CONSOLIDATION. We believe that consolidation in
the banking industry will continue and will result in many individuals and
small- to medium-sized businesses being dissatisfied with the upheaval in their
banking relationships. We expect to capitalize on this continued industry
consolidation. By positioning ourselves as a true community bank that is
interested in delivering unparalleled personal service, we believe that we will
draw many of those dissatisfied clients to us.
OFFER FEE-GENERATING PRODUCTS AND SERVICES. Futurus Bank's range of
services, pricing strategies, interest rates paid and charged, and hours of
operation will be structured to attract its target clients and grow its market
share. Futurus Bank will strive to offer small- to medium-sized businesses,
professionals, entrepreneurs and consumers the best loan services available
while charging appropriate fees for these services. Additionally, we anticipate
using sophisticated technology and third-party service providers to perform
selected functions at a lower cost in order to enhance non-interest income.
LENDING SERVICES
LENDING POLICY. We will offer a full range of lending products, including
commercial, real estate and consumer loans to individuals and small-to
medium-sized businesses and professional concerns. We will compete for these
loans with competitors who are well established in the northern Fulton County
area and have greater resources and lending limits. As a result, we may
initially have to offer more flexible pricing and terms to attract borrowers.
We estimate that Futurus Bank's loan portfolio will be comprised of the
following:
<TABLE>
<CAPTION>
LOAN CATEGORY RATIO
------------- --------
<S> <C>
Commercial loans to small- and medium-sized businesses...... 60%
Real estate related loans................................... 30%
Consumer loans.............................................. 10%
</TABLE>
Based on our executive officers' past lending experience, we believe that,
when properly managed and monitored, none of these categories represents a
significantly higher risk than the other. Additionally, Futurus Bank plans to
avoid concentrations of loans to a single industry or secured by a particular
type of collateral.
LOAN APPROVAL AND REVIEW. Futurus Bank's loan approval policies will
provide for various levels of officer lending authority. When the amount of
total loans to a single borrower exceeds that individual officer's lending
authority, an officer with a higher lending limit or Futurus Bank's Loan
Committee will determine whether to approve the loan request. Futurus Bank will
not make any loans to any of its directors or executive officers unless its
board of directors, excluding the interested party, first approves the loan, and
the terms of the loan are no more favorable than would be available to any
comparable borrower.
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LENDING LIMITS. Futurus Bank's lending activities will be subject to a
variety of lending limits imposed by federal law. Differing limits apply based
on the type of loan or the nature of the borrower, including the borrower's
relationship to the bank. In general, however, Futurus Bank will be able to loan
any one borrower a maximum amount equal to either:
- 15% of Futurus Bank's capital and surplus; or
- 25% of its capital and surplus if the amount that exceeds 15% is fully
secured by readily marketable collateral.
Based on its proposed capitalization and projected pre-opening expenses,
Futurus Bank's initial legal lending limit will be approximately $1,150,000 for
loans not fully secured plus an additional $750,000, or a total of approximately
$1.9 million, for loans that meet the federal guidelines. These legal limits
will increase or decrease as Futurus Bank's capital increases or decreases as a
result of its earnings or losses, among other reasons. Our management team has
adopted an internal lending limit of $1.0 million, which will initially be lower
than the applicable legal limit. However, based on either our internal lending
limit or our legal lending limit, Futurus Bank will need to sell participations
in its loans to other financial institutions in order to meet all of the lending
needs of our clients requiring extensions of credit above these limits.
CREDIT RISKS. The principal economic risk associated with each category of
loans that Futurus Bank expects to make is the creditworthiness of the borrower.
Borrower creditworthiness is affected by general economic conditions and the
strength of the relevant business market segment. General economic factors
affecting a borrower's ability to repay include interest, inflation and
employment rates, as well as other factors affecting a borrower's customers,
suppliers and employees.
The well established financial institutions in the northern Fulton County
market are likely to make proportionately more loans to medium- to large-sized
businesses than Futurus Bank will make. Many of Futurus Bank's anticipated
commercial loans will likely be made to small- to medium-sized businesses that
may be less able to withstand competitive, economic and financial pressures than
larger borrowers.
COMMERCIAL LOANS. We expect that loans for commercial purposes in various
lines of businesses will be one of the primary components of Futurus Bank's loan
portfolio. The terms of these loans will vary by purpose and by type of
underlying collateral, if any. Futurus Bank will typically make equipment loans
for a term of five years or less at fixed or variable rates, with the loan fully
amortized over the term. Equipment loans generally will be secured by the
financed equipment, and the ratio of the loan principal to the value of the
financed equipment or other collateral will generally be 80% or less. Loans to
support working capital 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. For loans secured by accounts receivable or
inventory, principal will typically be repaid as the assets securing the loan
are converted into cash, and for loans secured with other types of collateral,
principal will typically be due at maturity. The quality of the commercial
borrower's management and its ability both to properly evaluate changes in the
supply and demand characteristics affecting its markets for products and
services and to effectively respond to such changes are significant factors in a
commercial borrower's creditworthiness.
REAL ESTATE LOANS. Futurus Bank will make commercial real estate loans,
construction and development loans, and residential real estate loans. These
loans include commercial loans where Futurus Bank takes a security interest in
real estate out of an abundance of caution and not as the principal collateral
for the loan, but will exclude home equity loans, which are classified as
consumer loans.
- COMMERCIAL REAL ESTATE. Commercial real estate loan terms generally will
be limited to five years or less, although payments may be structured on a
longer amortization basis. Interest rates may
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be fixed or adjustable, although rates typically will not be fixed for a
period exceeding 60 months. Futurus Bank will generally charge an
origination fee of one percent. We will attempt to reduce credit risk on
our commercial real estate loans by emphasizing loans on owner-occupied
office and retail buildings where the ratio of the loan principal to the
value of the collateral as established by independent appraisal does not
exceed 80% and net projected cash flow available for debt service equals
120% of the debt service requirement. In addition, Futurus Bank generally
will require personal guarantees from the principal owners of the property
supported by a review by Futurus Bank's management of the principal
owners' personal financial statements. Risks associated with commercial
real estate loans include fluctuations in the value of real estate, new
job creation trends, tenant vacancy rates and the quality of the
borrower's management. Futurus Bank will limit its risk by analyzing
borrowers' cash flow and collateral value on an ongoing basis.
- CONSTRUCTION AND DEVELOPMENT LOANS. We will make construction and
development loans both on a pre-sold and speculative basis. If the
borrower has entered into an agreement to sell the property prior to
beginning construction, then the loan is considered to be on a pre-sold
basis. If the borrower has not entered into an agreement to sell the
property prior to beginning construction, then the loan is considered to
be on a speculative basis. Construction and development loans are
generally made with a term of nine to twelve months and interest is paid
quarterly. The ratio of the loan principal to the value of the collateral
as established by independent appraisal typically will not exceed 75%.
Speculative loans will be based on the borrower's financial strength and
cash flow position. Loan proceeds will be disbursed based on the
percentage of completion and only after the project has been inspected by
an experienced construction lender or independent appraiser. Risks
associated with construction loans include fluctuations in the value of
real estate and new job creation trends.
- RESIDENTIAL REAL ESTATE. Futurus Bank's residential real estate loans will
consist of residential second mortgage loans and residential construction
loans only. We will offer fixed and variable rates on our mortgages with
the amortization of second mortgages generally not exceeding 15 years and
the rates generally not being fixed for over 60 months. These loans will
be made in accordance with Futurus Bank's appraisal policy and with the
ratio of the loan principal to the value of collateral as established by
independent appraisal not exceeding 95%. We expect that these
loan-to-value ratios will be sufficient to compensate for fluctuations in
real estate market value and to minimize losses that could result from a
downturn in the residential real estate market.
CONSUMER LOANS. Futurus Bank will make a variety of loans to individuals
for personal, family and household purposes, including secured and unsecured
installment and term loans, home equity loans and home equity lines of credit.
Consumer loan repayments depend upon the borrower's financial stability and are
more likely to be adversely affected by divorce, job loss, illness and personal
hardships. Because many consumer loans are secured by depreciable assets such as
boats, cars and trailers the loan should be amortized over the useful life of
the asset. To minimize the risk that the borrower cannot afford the monthly
payments, all fixed monthly obligations should not exceed 38% of the borrower's
gross monthly income. The borrower should also be continuously employed for at
least 12 months prior to obtaining the loan. The loan officer will review the
borrower's past credit history, past income level, debt history and, when
applicable, cash flow and determine the impact of all these factors on the
ability of the borrower to make future payments as agreed. We expect that the
principal competitors for consumer loans will be the established banks in the
Futurus Bank market.
LENDING OFFICERS. Futurus Bank intends to initially hire a commercial
lender and a consumer lender in order to develop our loan portfolios. Each
lender will have experience within the northern Fulton County market and will be
expected to bring substantial business to Futurus Bank.
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INVESTMENTS
In addition to loans, Futurus Bank will make other investments primarily in
obligations of the United States or obligations guaranteed as to principal and
interest by the United States and other taxable securities. No investment in any
of those instruments will exceed any applicable limitation imposed by law or
regulation. The Asset and Liability Committee will review the investment
portfolio on an ongoing basis in order to ensure that the investments conform to
Futurus Bank's policy as set by the board of directors. The Asset and Liability
Committee will be chaired by C. Parke Day and will also include Joel P.
Weinbach, Danny L. Tesney and Nathan E. Hardwick, IV.
ASSET AND LIABILITY MANAGEMENT
The Asset and Liability Committee will manage Futurus Bank's assets and
liabilities and will strive to provide a stable, optimized net interest margin,
adequate liquidity and a profitable after-tax return on assets and return on
equity. The committee will conduct these management functions within the
framework of written loan and investment policies that Futurus Bank will adopt.
The committee will attempt to maintain a balanced position between rate
sensitive assets and rate sensitive liabilities. Specifically, it will chart
assets and liabilities on a matrix by maturity, effective duration and interest
adjustment period and attempt to manage any gaps in maturity ranges.
DEPOSIT SERVICES
Futurus Bank will seek to establish a broad base of core deposits, including
savings accounts, checking accounts, money market accounts, a variety of
certificates of deposit and IRA accounts. To attract deposits, Futurus Bank will
employ an aggressive marketing plan in its overall service area and will feature
a broad product line and competitive rates and services. The primary sources of
deposits will be residents of, and businesses and their employees located in,
Futurus Bank's primary market area. Futurus Bank plans to obtain these deposits
through personal solicitation by its officers and directors, direct mail
solicitations and advertisements published in the local media. In order to
attract its initial deposit base, Futurus Bank may offer higher interest rates
on various deposit accounts.
OTHER BANKING SERVICES
Other anticipated banking services include limited cash management services,
on-line banking services, travelers checks, direct deposit of payroll and social
security checks, night depository, ATM cards and debit cards. Futurus Bank plans
to become associated with one or more nationwide networks of automated teller
machines that our clients will be able to use throughout Georgia and other
regions. We do not plan to charge our clients for the use of these automated
teller machines since we will initially have only one location. However, other
financial institutions may charge our customers for the use of their automated
teller machines. We also plan to offer MasterCard-Registered Trademark- and
VISA-Registered Trademark- credit card services through a correspondent bank as
an agent for Futurus Bank. Futurus Bank does not plan to exercise trust powers
during its initial years of operation. It may in the future offer a full-service
trust department, but cannot do so without the prior approval of the Office of
the Comptroller of the Currency. We plan to offer discount brokerage services
through a third party that has not been selected.
Futurus Bank will also offer its targeted commercial clients a courier
service that will pick up non-cash deposits and minimal cash deposits of up to
approximately $200 from the client's place of business and deliver them to the
bank. We believe that this will be an important service for our clients because
Futurus Bank will initially have only one location. Futurus Bank will provide
this service through a third party, which has not yet been chosen, that is
approved by the Public Service Commission for bank-related work.
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NON-BANKING SERVICES
As part of our business philosophy, we intend to differentiate ourselves
from our competitors by creating a banking experience that provides to our
clients' a whole new way of banking. Accordingly, we anticipate providing
value-added, non-banking services that will make visiting our main office/retail
center an enjoyable and worthwhile part of our clients' day. For example, in
addition to our traditional banking services, we intend to dedicate space within
our main office/retail center where clients may:
- access the internet for free and sample our custom-blended coffee at our
Internet Cafe;
- relax in a comfortable chair and tune into the latest television broadcast
covering the world of finance at our Financial Center;
- let their children play in our specially designed Kids' Center; and
- browse real estate listings, obtain referrals for real estate-related
services and acquire information on marketing their personal residences or
other real estate related subjects at our Home Center.
We believe that by providing these and other non-banking services that we
will be able to establish long-term and growing relationships with our clients
and a community reputation that will continually attract new client
relationships for Futurus Bank.
FUTURE SERVICES
In addition to the services described above, we anticipate that at some time
in the future we will also offer to our clients permissible insurance products.
We will probably delay offering these products until both Futurus Financial
Services and Futurus Bank are operating profitably.
INFORMATION SYSTEMS AND THE YEAR 2000
The year 2000 issue confronting Futurus Financial Services and Futurus Bank
and their suppliers, clients, clients' suppliers and competitors centers on the
inability of computer systems to recognize the year 2000 and other year
2000-sensitive dates such as February 29, 2000 or January 1, 2001. Many existing
computer programs and systems originally were programmed with six-digit dates
that provided only two digits to identify the calendar year in the date field.
After the new millennium, these programs and computers may recognize "00" as the
year 1900 rather than the year 2000. If computer systems are not able to
identify the year 2000, many computer applications could fail or create
incorrect results.
Since we do not intend to begin our banking operations until the second
quarter of 2000, we will not face the same date recognition issues as other
financial institutions that were in operation at January 1, 2000. Futurus
Financial Services, Futurus Bank, or any of their service providers,
correspondents, vendors or clients may, however, experience a disruption of
business resulting from a year 2000 problem occurring after January 1, 2000.
Such a disruption could cause a delay in beginning our banking operations. We
will use software and hardware developed by independent third parties to provide
us with our intended information systems. As a result, we will depend on the
efforts of those vendors to ensure that their data processing systems
accommodate year 2000 information on January 1, 2000 as well as any later year
2000-sensitive date.
We believe most year 2000 issues that could affect our operations will have
surfaced prior to when we begin our banking operations. Consequently, we do not
expect any year 2000 issues to have a material effect on our operations.
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ASSOCIATES
When we begin operations, Futurus Bank projects that it will have 7
full-time associates. When we occupy our permanent facility, Futurus Bank
projects that it will have 13 full-time associates and one part-time associate.
We do not expect that Futurus Financial Services will have any associates who
are not also associates of Futurus Bank.
OFFICES
On March 14, 2000, Futurus Financial Services entered into a contract with
Pioneer Real Estate Development, Inc. to lease a 1.35 acre lot located on
Windward Parkway, one-half mile west of Georgia Highway 400 in Alpharetta,
Georgia. The leased property will be the proposed site for our permanent
facility. The term of the lease will be for 12 years, with two five-year renewal
options. Rent will range from $14,312.50 to $17,795.79 per month, plus a monthly
rental agency fee ranging from $715.63 to $889.79, over the initial 12-year
lease period. Construction of our permanent facility is expected to begin once
we have raised $9.0 million in the offering with completion anticipated in
approximately four to six months thereafter. The permanent facility will be a
single-story, contemporary style building, and will include four drive-up
windows, two of which will initially be operational, and one automated teller
machine. The total construction cost of the building, including furniture,
fixtures and equipment, is estimated at $1.5 million, with Pioneer Real Estate
Development, Inc., as landlord, contributing approximately $450,000 of that
amount. Futurus Bank, after being capitalized by Futurus Financial Services,
will contribute the balance of approximately $1.05 million.
Futurus Bank's proposed location will offer high visibility in an area with
significant traffic flow. The Windward area is a central location for business,
residential, leisure and shopping activities and is near Georgia Highway 400, a
major highway serving the community.
In the interim, our executive offices are located in a temporary facility
located in the Alpharetta Square shopping center at 281 South Main Street,
Alpharetta, Georgia, just south of the Alpharetta Highway (also known as South
Main Street) and Old Milton Parkway intersection. Our temporary facility is
approximately three miles from our proposed permanent location. The rental fee
for the temporary office space is $1,750 per month until July 31, 2000, at which
time the rental fee will increase to $1,800 on a month-to-month basis. The lease
for our temporary facility began February 15, 2000, and we completed our
renovations and moved into our temporary facility in April 2000. Until we
relocate to our permanent office location and once we receive final regulatory
approval to begin banking operations, we plan to conduct only limited banking
services out of our temporary facility, which will include making loans and
taking deposits.
Prior to moving into our temporary facility, our executive offices were
located at 1580 Warsaw Road, Roswell, Georgia with monthly rent being $1,055.
The corresponding lease agreement for our Warsaw Road location will terminate on
August 31, 2000. We anticipate that total rental expense associated with the
Warsaw Road location will be $8,440 during 2000.
Although we have no specific plans for expansion, we may expand our presence
in Futurus Bank's market by adding branches in other strategic locations if
deemed appropriate. We realize that by adding new branches, Futurus Bank may
gain new channels through which it can build its deposit base and solicit new
clients. Accordingly, we will carefully evaluate future opportunities for
strategic expansion as they become available.
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MANAGEMENT
GENERAL
The following table sets forth the number and percentage of outstanding
shares of common stock we expect to be beneficially owned by the organizers and
executive officers after the completion of this offering. All of our organizers
will serve as directors. The addresses of our organizers are the same as the
address of Futurus Financial Services. Prior to the offering, Gregory A. Janicki
purchased one share of common stock for $10.00. We will redeem this share after
the offering. The numbers of shares indicated in the table are based on
"beneficial ownership" concepts as defined by the Securities and Exchange
Commission. Beneficial ownership includes shares that are either owned or may be
acquired within 60 days by the principal, a spouse, minor children and other
relatives residing in the same household, and trusts, partnerships, corporations
or deferred compensation plans which are affiliated with the principal. This
table separately discloses the number of warrants and options that will be
granted to each organizer or executive officer.
<TABLE>
<CAPTION>
SHARES ANTICIPATED
TO BE OWNED FOLLOWING THE
OFFERING WARRANTS AND OPTIONS
---------------------------------------------- --------------------
PERCENTAGE OF PERCENTAGE OF
NAME OF BENEFICIAL OWNER NUMBER MINIMUM OFFERING MAXIMUM OFFERING NUMBER
------------------------ -------- ---------------- ---------------- --------------------
<S> <C> <C> <C> <C>
William M. Butler(1)............. 10,000 1.1 * 30,000
C. Parke Day..................... 20,000 2.2 1.8 20,000
Nathan E. Hardwick, IV........... 38,000 4.2 3.5 38,000
Michael S. Hug................... 20,000 2.2 1.8 20,000
Deborah M. Janicki(2)............ 30,000 3.3 2.7 30,000
Gregory A. Janicki(2)............ 30,000 3.3 2.7 30,000
Richard W. Stimson............... 20,000 2.2 1.8 20,000
Donald S. Shapleigh, Jr.......... 10,000 1.1 * 5,000
Danny L. Tesney.................. 20,000 2.2 1.8 20,000
Joel P. Weinbach................. 20,000 2.2 1.8 20,000
R. Wesley Fuller(3).............. 5,000 * * 15,000
Suzanne T. Phipps(4)............. 250 * * 7,500
All Directors and Executive
Officers as a Group (12
persons)....................... 223,250 24.8 18.9 255,500
</TABLE>
------------------------
* Represents ownership of less than 1.0%.
(1) Mr. Butler will receive an option to purchase 25,000 shares of common stock
under our stock incentive plan, as well as a warrant to purchase 5,000
shares.
(2) Gregory A. Janicki and Deborah M. Janicki each intends to purchase 30,000
shares of common stock. As husband and wife, they will also be deemed to be
the beneficial owner of each other's shares. Consequently, each will be
deemed to beneficially own 60,000 shares.
(3) We intend to grant Mr. Fuller an option to purchase 10,000 shares of common
stock under our stock incentive plan. Further, we intend to grant
Mr. Fuller an additional option to purchase 5,000 shares if Futurus Bank
meets specified performance goals.
(4) We intend to grant Ms. Phipps an option to purchase 5,000 shares of common
stock under our stock incentive plan. Further, we intend to grant
Ms. Phipps an additional option to purchase 2,500 shares if Futurus Bank
meets specified performance goals.
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EXECUTIVE OFFICERS AND DIRECTORS OF FUTURUS FINANCIAL SERVICES
The following table sets forth the age of our executive officers and
directors and the positions that they hold with Futurus Financial Services as of
January 1, 2000. Each person listed below as a director has served as a director
of Futurus Financial Services since August 12, 1999. Our president and chief
executive office has served us in this capacity since August 20, 1999. The
president and chief executive officer, chief financial officer and directors of
Futurus Financial Services will also hold these same positions with Futurus
Bank. Futurus Financial Services' articles of incorporation provide for a
staggered board of directors so that, as nearly as possible, one-third of the
directors are elected each year to serve three-year terms. The terms of office
of the classes of directors expire as follows: Class I at the first annual
meeting of shareholders, which we intend to hold in the spring of 2001;
Class II at the second annual meeting of shareholders; and Class III at the
third annual meeting of shareholders. Our executive officers serve at the
discretion of the board of directors. See "Selected Provisions of the Articles
of Incorporation and Bylaws" on page 45.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH FUTURUS FINANCIAL SERVICES
---- -------- ------------------------------------------
<S> <C> <C>
CLASS I DIRECTORS:
William M. Butler......................... 42 Director, President and Chief Executive
Officer
C. Parke Day.............................. 34 Director, Secretary
Nathan E. Hardwick, IV.................... 34 Director
Deborah M. Janicki........................ 46 Director
CLASS II DIRECTORS:
Michael S. Hug............................ 41 Director
Gregory A. Janicki........................ 47 Chairman of the Board of Directors
Richard W. Stimson........................ 50 Director
CLASS III DIRECTORS:
Donald S. Shapleigh, Jr................... 51 Director
Danny L. Tesney........................... 42 Director, Treasurer
Joel P. Weinbach.......................... 35 Director
EXECUTIVE OFFICERS NOT ALSO DIRECTORS:
R. Wesley Fuller.......................... 39 Chief Financial Officer, Executive Vice
President
Suzanne T. Phipps......................... 35 Senior Vice President
</TABLE>
Each of the directors of Futurus Financial Services is a proposed director
of Futurus Bank. Each of Futurus Bank's proposed directors will, upon approval
of the Office of the Comptroller of the Currency, serve until Futurus Bank's
first shareholders meeting, which will convene shortly after Futurus Bank
receives its charter. Futurus Financial Services, as the sole shareholder of
Futurus Bank, will nominate each proposed director to serve as director of
Futurus Bank at that meeting. After the first shareholders meeting, directors of
Futurus Bank will serve for a term of one year and will be elected by Futurus
Financial Services each year at Futurus Bank's annual meeting of shareholders.
Futurus Bank's officers will be appointed or elected by its board of directors
and will hold office at the will of its board.
Deborah M. Janicki and Gregory A. Janicki, who are husband and wife, are the
only directors or executive officers that have a family relationship as close as
first cousins.
The following is a biographical summary of each of our directors and
executive officers:
WILLIAM M. BUTLER. Mr. Butler was raised in northern Atlanta and has spent
the majority of his banking career in this market. He is a graduate of Furman
University with a Bachelor of Arts in Economics/Business Administration.
Currently, Mr. Butler is attending the Stonier Graduate School of
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Banking. Mr. Butler has been a banker for over 17 years and has served in
various management positions throughout his career. Most recently, from
May 1997 to August 1999, Mr. Butler served as senior vice president and senior
lender of Charter Bank & Trust, Marietta, Georgia. In this position, Mr. Butler
was second in command and was responsible for all commercial lending activity
for Charter Bank & Trust, a $165 million community bank. After joining Charter
Bank & Trust in 1997, Mr. Butler was instrumental in growing the bank's total
loans outstanding from $73 million to $98 million and improving the overall
credit quality of the bank's loan portfolio, as measured by the level of
adversely rated assets. Prior to joining Charter Bank & Trust, from April 1996
to December 1996, Mr. Butler was the vice president of administration with
Caldwell-Spartin, a software company. Mr. Butler's banking experience also
includes a position as division manager with Bank South, Atlanta, Georgia from
June 1990 until January 1996 when the bank was acquired by NationsBank
Corporation (now Bank of America Corporation).
C. PARKE DAY. Mr. Day is a real estate developer/investor and principal
owner of Parke Day Properties, LLC, which he founded in 1992. Parke Day
Properties, LLC is located in Norcross, Georgia and the company has been active
in northern Fulton County, Georgia. Prior to his real estate career, Mr. Day
worked as a political campaign field coordinator from 1990 to 1992 and as a
manager for Midway Plantation, Inc. from 1988 to 1989. Mr. Day was born in
Atlanta and raised in Dunwoody, Georgia, and his community involvement includes
the Atlanta Unit of the American Cancer Society, the Dunwoody Baptist Foundation
and the Cecil B. Day Foundation. As a member of the Northern Fulton Chamber of
Commerce, Mr. Day has numerous business and personal contacts in the northern
Fulton County area.
NATHAN E. HARDWICK, IV. Mr. Hardwick is the managing partner of Jackson &
Hardwick, a real estate law firm with offices throughout the metropolitan
Atlanta area. Since joining the firm in 1991, Mr. Hardwick has been responsible
for every business aspect of the firm including bank accounts and escrow
reconciliation. As managing partner, he is currently in charge of the day-to-day
activities including overseeing the firm's eight offices. Through his firm, and
individually, Mr. Hardwick is active in various community, civic and charitable
activities.
MICHAEL S. HUG. Mr. Hug is a registered architect, and is currently the
managing partner of Zaic Hug & Associates, L.L.C., an architectural and interior
design firm located in Alpharetta, Georgia. From 1989 to 1992, Mr. Hug was an
associate architect with Culpepper, McAuliffe & Meaders, Inc. in Atlanta,
Georgia and from 1982 to 1989, he was an associate architect with Smallwood,
Reynolds, Stewart & Stewart, Inc. in Atlanta, Georgia. Throughout his career,
Mr. Hug has been actively involved in various community organizations. As part
of his community involvement, Mr. Hug has been a business partner for Manning
Oaks Elementary School, an assistant baseball coach in Atlanta and Alpharetta,
Georgia, a head soccer coach for YMCA-Buckhead and an assistant pack leader for
a local Cub Scout organization.
DEBORAH M. JANICKI. Ms. Janicki is senior vice president and co-owner of
Real Estate Financial Services, Roswell, Georgia, a mortgage lending company
with offices in metropolitan Atlanta, Georgia, metropolitan Charlotte, North
Carolina, and metropolitan Greenville, South Carolina. Ms. Janicki started Real
Estate Financial Services in 1995 with her husband, Gregory Janicki. Since 1986,
Ms. Janicki has also been president of Northern Suburban Brokers, Inc., a real
estate services firm in Alpharetta, Georgia. From 1992 to 1994, she was a vice
president for New Homes America of Georgia, and from 1986 to 1992, she was a
broker and owner of RE/MAX Northern Suburban. Ms. Janicki's community and
professional activities include the Georgia Association of Realtors, Georgia
Association of Mortgage Brokers, Student Venture of Atlanta, Atlanta Residential
Young Council of Realtors and RE/MAX of Georgia Broker/Owner's Council.
GREGORY A. JANICKI. Mr. Janicki is the president and co-owner of Real
Estate Financial Services, Roswell, Georgia, a mortgage lending company with
offices in metropolitan Atlanta, Georgia,
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metropolitan Charlotte, North Carolina, and metropolitan Greenville, South
Carolina. Mr. Janicki started Real Estate Financial Services in 1995 with his
wife, Deborah Janicki. From 1990 to 1994, Mr. Janicki was vice president and
co-owner of First Realty Mortgage Corporation, a mortgage broker located in
Roswell, Georgia. Before 1990, Mr. Janicki spent ten years with two major
corporations in various sales management and executive positions. Mr. Janicki is
author of the book LIFE MASTERY: THE ULTIMATE POWER OF RELATIONSHIPS, and he is
a motivational public speaker and trainer in the areas of sales and management.
Throughout his career, Mr. Janicki has been actively involved in community
activities, including the Student Venture of Atlanta and Georgia Association of
Mortgage Brokers. Mr. Janicki received a Bachelor of Science Degree in
Industrial Technology from the University of Wisconsin-Stout in 1973.
DONALD S. SHAPLEIGH, JR. Mr. Shapleigh is executive vice president of sales
for Directo, Inc., Norcross, Georgia. Directo is a financial services company
that offers direct deposit payroll services and related financial products to
individuals who do not have bank accounts. Mr. Shapleigh is also a member of the
board of directors of Net.B@nk and Net.B@nk, Inc. Before joining Directo in
1999, Mr. Shapleigh spent 27 years as a banker in the Atlanta market. From 1995
to 1999, he was president and chief operating officer of Net.B@nk in Atlanta;
from 1991 to 1994, he was an executive officer for SouthTrust Bank in Atlanta;
and from 1971 to 1991, he served as an executive officer for Bank South, N.A. in
Atlanta. Throughout his career, Mr. Shapleigh has remained active in community
affairs including the United Way, Dunwoody Country Club, Habitat for Humanity
and little league baseball.
RICHARD W. STIMSON. Mr. Stimson recently accepted a new position as vice
president of legal affairs for Nokia of the Americas with the Nokia Corporation.
He began his new position on May 1, 2000, and is principally involved in legal
and governmental affairs for Nokia's mobile phone products. Prior to accepting
his new position with Nokia, and for the past 21 years, Mr. Stimson has worked
for the GTE Corporation, including serving as GTE's vice president and deputy
general counsel with worldwide responsibility for GTE's litigation and antitrust
matters and with executive oversight of GTE's wireless, air-to-ground and
telecommunications services legal activities. Additionally, from 1981 to 1983,
Mr. Stimson served as chief counsel to Commissioner Anthony Sousa, Federal
Energy Regulatory Commission, Washington, D.C., where he advised on various
national energy matters. Mr. Stimson is admitted to practice law in Michigan,
North Carolina, Indiana and Texas and has been an active participant in the
American Bar Association. Mr. Stimson is a member of Mt. Pisgah United Methodist
Church and has previously been active in the American Cancer Society, the United
Way, the Multiple Sclerosis Society and the Boy Scouts of America.
DANNY L. TESNEY. Mr. Tesney is a residential real estate salesman with
RE/MAX Professional in Suwanee, Georgia and vice president/treasurer and
co-owner of C. Tesney & Associates, Inc., a real estate sales firm also located
in Suwanee, Georgia. Mr. Tesney's charitable work benefits the Children's
Miracle Network and Cystic Fibrosis, and he is presently a member of the Atlanta
Chamber of Commerce.
JOEL P. WEINBACH. Mr. Weinbach is a partner in Silicon Stemcell, a business
incubator located in Columbia, South Carolina that develops technology-oriented
businesses. Presently he is involved with various startup technology companies,
and has invested in numerous companies with Atlanta operations. In addition,
Mr. Weinbach is president of Yieldstar.com, a yield-management expert system
delivered through the internet to the multifamily housing industry. He formerly
owned a technology consulting firm with over 300 employees and office locations
in North Carolina, South Carolina, Georgia, Texas and Alabama. He has worked
with numerous banks and credit unions as clients and he has been involved with
designing bank networks, communications systems and information technology
operating procedures. He is a former board member of Windward Technology, an
Atlanta-based systems integrator that was acquired by a public company.
Mr. Weinbach has been a member of the
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<PAGE>
National Board of Advisors for The College of Math and Science and The College
of Social Work at the University of South Carolina since 1996.
R. WESLEY FULLER. Mr. Fuller is the chief financial officer and executive
vice president of Futurus Financial Services and the proposed chief financial
officer of Futurus Bank. Prior to joining us, Mr. Fuller served as a senior vice
president of Premier Bancshares and executive vice president of Premier Bank
where he was responsible for managing the operations functions of the bank.
During his tenure at Premier, from November 1997 to April 2000, Mr. Fuller was
instrumental in coordinating the combination of nine bank charters into a single
institution in less than 18 months while managing the operations of the bank as
it grew from approximately $300 million to approximately $2 billion in assets.
From January 1994 to October 1997, Mr. Fuller served as the first vice president
of Central and Southern Bank of Georgia where he managed the retail banking side
of three different branches, as well as directed the operations of Central and
Southern Bank. Prior to his experience at Central and Southern Bank, from 1983
to 1993, Mr. Fuller served in various capacities with Bank Corporation of
Georgia and its subsidiaries, First South Bank and Ameribank, including vice
president, controller, data processing manager and banking officer. Mr. Fuller
graduated from Georgia College in 1983 with a degree in accounting, and is a
1996 graduate of the BAI Graduate School of Banking.
SUZANNE T. PHIPPS. Ms. Phipps is the senior vice president of Futurus
Financial Services and the proposed chief credit officer and chief lending
officer of Futurus Bank. Ms. Phipps has approximately 12 years of credit and
lending experience. From August 1998 to February 2000, Ms. Phipps served as a
credit risk officer for Banc of America Specialty Finance, Inc., Alpharetta,
Georgia, an affiliate of Bank of America, where she assessed and monitored the
lending risk within a $1.5 billion commercial loan portfolio. As part of her
responsibilities as a credit risk officer, Ms. Phipps also helped establish
asset quality standards and recommended structural changes where needed to
ensure quality loan growth. Prior to joining Banc of America Specialty Finance,
Ms. Phipps served from August 1996 to August 1998 as a credit policy officer for
NationsCredit Distribution Finance, Inc., Atlanta, Georgia. In this capacity,
Ms. Phipps reviewed and approved requests for floor plan financing for a
$425 million loan portfolio, as well as audited field offices to verify credit
policies and loan documentation compliance. Additionally, from January 1996 to
August 1998, Ms. Phipps served as a relationship manager for NationsBank, and
from December 1993 to January 1996, as a commercial banking officer and a
corporate services manager with Bank South, Atlanta, Georgia. Ms. Phipps
received her bachelor's degree in business administration in 1987 from Georgia
State University.
BOARD COMMITTEES
Futurus Financial Services' board of directors has established the
committees described below. The members of each committee will be the same for
Futurus Bank as they are for Futurus Financial Services.
COMPENSATION COMMITTEE. The Compensation Committee establishes compensation
levels for officers of Futurus Financial Services and Futurus Bank, reviews
management organization and development, reviews significant benefit programs
and establishes and administers executive compensation programs, including our
stock incentive plan. The Compensation Committee is chaired by Richard W.
Stimson with Gregory A. Janicki, William M. Butler and Donald S. Shapleigh, Jr.
as members.
EXECUTIVE COMMITTEE. The Executive Committee is authorized, between
meetings of the board of directors, to perform all duties and exercise all
authority of the board except for those duties and authorities specifically
granted to other committees of the board or which are exclusively reserved to
the full board. The committee will make recommendations to the board regarding
matters that are important to the overall management and expansion of Futurus
Financial Services and Futurus Bank, including annual budgets and strategic
business plans. Additionally, this committee will be responsible
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for recommending nominations for expired board seats and additional board
members. The Executive Committee is chaired by Gregory A. Janicki with William
M. Butler, Richard W. Stimson and Donald S. Shapleigh, Jr. as members.
LOAN COMMITTEE. The Loan Committee will be responsible for establishing or
approving, in conjunction with management, all major policies and procedures
pertaining to loan policy, including:
- establishing the loan approval system;
- approving all loans in excess of a predetermined amount;
- reviewing all past due reports, rated loan reports, non-accrual reports
and other reports and indicators of overall loan portfolio quality;
- establishing measurements for adequacy of the loan loss reserve; and
- reviewing any other matters pertaining to the loan portfolio such as yield
and concentrations.
The Loan Committee is chaired by Donald S. Shapleigh, Jr. with Deborah M.
Janicki, Danny L. Tesney, William M. Butler and Michael S. Hug as members.
AUDIT, COMPLIANCE AND CRA COMMITTEE. The principal responsibilities of this
committee are to ensure that the board receives objective information regarding
policies, procedures and controls of Futurus Bank with respect to auditing,
accounting, internal accounting controls and financial reporting. The committee
will also work to ensure that Futurus Bank is in full compliance with applicable
laws and regulations. Among other things, this will require the following:
- recommending the appointment of an independent auditor on an annual basis;
- reviewing the independent auditors' report and management's response;
- reviewing all reports from regulatory authorities and management's
response;
- establishing independent reviews and audits;
- establishing appropriate levels of director and officer insurance and
blanket bond insurance coverage; and
- reviewing CRA compliance.
The Audit, Compliance and CRA Committee is chaired by Joel P. Weinbach with
Richard W. Stimson and Gregory A. Janicki as members.
ASSET/LIABILITY COMMITTEE. The Asset/Liability Committee will be
responsible for the overall investment strategy of Futurus Financial Services
and Futurus Bank. This will include liquidity management, risk management, net
interest margin management, monitoring deposit level trends and pricing,
monitoring asset level trends and pricing, and portfolio investment decisions.
The Asset/ Liability Committee is chaired by C. Parke Day with Joel P. Weinbach,
Danny L. Tesney and Nathan E. Hardwick, IV as members.
MARKETING COMMITTEE. It will be the duty of the Marketing Committee to seek
advice, support and commitment from the entire board of directors regarding the
development of safe and sound banking business through board members' contacts
within the community. We believe that a new bank's success depends on this
commitment, and members of this committee will regularly contact other board
members for their help in introducing high quality potential clients to Futurus
Bank. The Marketing Committee will also serve as a forum to determine the credit
needs of the community. The Marketing Committee is chaired by Gregory A. Janicki
with Michael S. Hug, Deborah M. Janicki, C. Parke Day, William M. Butler and
Nathan E. Hardwick, IV as members.
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EXECUTIVE COMPENSATION
1999 COMPENSATION
The following table shows information for 1999 regarding compensation for
services rendered in all capacities to Futurus Financial Services by its
president and chief executive officer. No executive officer earned more than
$100,000 in salary and bonus in 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------
OTHER ANNUAL
YEAR SALARY($) BONUS($) COMPENSATION($)
-------- --------- -------- ---------------
<S> <C> <C> <C> <C>
William M. Butler,............................... 1999(1) 48,047 0 0(2)
President and Chief Executive Officer
</TABLE>
------------------------
(1) Reflects the period of time from August 20, 1999 through December 31, 1999,
during which time Mr. Butler was classified as an independent contractor.
(2) We have omitted information on "perks" and other personal benefits because
the aggregate value of these items does not meet the minimum amount required
for disclosure under the Securities and Exchange Commission's regulations.
EMPLOYMENT AGREEMENTS
WILLIAM M. BUTLER. Effective August 20, 1999, Futurus Financial Services
and Futurus Bank entered into a three-year employment agreement with William M.
Butler regarding Mr. Butler's employment as our president and chief executive
officer. Under the terms of the agreement, Mr. Butler will receive a salary of
$120,000 per year, plus benefits, and may be entitled to receive annual bonus
compensation as awarded by the Compensation Committee based on Futurus Bank's
earnings. For Mr. Butler to be eligible for any annual performance bonuses,
Futurus Bank must first:
- receive a "satisfactory" or better rating by the OCC in its most current
OCC Report of Supervisory Activity with a Uniform Financial Institution
Rating of not less than "2";
- receive a classification rating of "adequately capitalized" or better, as
defined by OCC regulations;
- be in operation for more than one year; and
- become and remain profitable as of its most recent fiscal year-end.
Once eligible, Mr. Butler may receive an annual performance bonus in an amount
up to 25% of his base salary for meeting or exceeding the board of director's
annual plan for Futurus Bank. Furthermore, based on the same eligibility
criteria, Mr. Butler may receive a separate bonus in an amount equal to 15% of
Futurus Bank's pre-tax profits, up to 25% of his base salary.
Mr. Butler's agreement also provides that Futurus Financial Services will
grant Mr. Butler an incentive stock option to purchase 25,000 shares of our
common stock at an exercise price of $10.00 per share. Mr. Butler's option will
be issued under our stock incentive plan and will constitute 22.7% of the shares
reserved for issuance under the plan. Mr. Butler's option will generally become
exercisable in equal one-fifth annual increments over a five-year period
beginning on the one-year anniversary after this prospectus becomes effective.
At the end of the initial three-year term of Mr. Butler's agreement, and at
the end of each succeeding 12-month period, the agreement will be extended for
an additional 12-month period unless
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either of the parties to the agreement gives notice of his or its intent not to
extend the agreement. We will be obligated to pay Mr. Butler his base salary for
12 months if one of the following terminating events occurs:
- Mr. Butler becomes permanently disabled;
- Futurus Bank abandons its organizational efforts;
- Futurus Bank terminates Mr. Butler's employment without cause; or
- Mr. Butler terminates his employment for cause.
Additionally, upon a change of control of Futurus Financial Services,
Mr. Butler will be entitled to severance compensation in an amount equal to
12 months of his base salary if we or our successor terminates his employment
other than for cause. Cause for terminating employment is defined in the
agreement.
The agreement also generally provides that, for a period of 18 months
following the termination of Mr. Butler's employment, he will not compete with
Futurus Bank in the banking business nor solicit our clients nor the associates
employed by us. The non-competition and non-solicitation provisions of the
agreement only apply if Mr. Butler terminates his employment without cause or in
connection with a change of control, or if we terminate his employment with
cause.
R. WESLEY FULLER. Effective April 6, 2000, we entered into a three-year
employment agreement with R. Wesley Fuller regarding Mr. Fuller's employment as
our chief financial officer. Under the terms of the agreement, Mr. Fuller will
receive a salary of $95,000 per year, plus benefits, and may be entitled to
receive annual bonus compensation as awarded by our compensation committee based
on Futurus Bank's earnings. Mr. Fuller's annual performance bonus is contingent
on the same eligibility criteria discussed earlier for Mr. Butler. If the bonus
criteria are met, Mr. Fuller may receive up to 25% of his base salary in the
form of an annual bonus.
Mr. Fuller's agreement also provides that Futurus Financial Services will
grant Mr. Fuller an incentive stock option to purchase 10,000 shares of our
common stock at an exercise price of $10.00 per share. Mr. Fuller may receive an
additional stock option to purchase 5,000 shares of our common stock if Futurus
Bank meets or exceeds 110% of the board of directors' annual plan for fiscal
year 2001. Mr. Fuller's options, if granted, would be issued under our stock
incentive plan and may constitute up to 13.6% of the shares reserved for
issuance under the plan. Mr. Fuller's options would generally become exercisable
in equal one-fifth annual increments over a five-year period.
The agreement also generally provides that, for a period of 18 months
following the termination of Mr. Fuller's employment, he will not compete with
Futurus Bank in the banking business nor solicit our clients nor the associates
employed by us. The non-competition and non-solicitation provisions of the
agreement would only apply if Mr. Fuller terminates his employment without cause
or in connection with a change of control, or if we terminate his employment
with cause.
The initial term of Mr. Fuller's agreement is three years, and is renewable
and terminable under the same conditions as stated earlier for Mr. Butler's
employment agreement.
SUZANNE T. PHIPPS. Effective April 4, 2000, we entered into a three-year
employment agreement with Suzanne T. Phipps regarding Ms. Phipps' employment as
our chief lending officer and chief credit officer. Under the terms of the
agreement, Ms. Phipps will receive a salary of $77,000 per year, plus benefits,
and may be entitled to receive annual bonus compensation as awarded by our
compensation committee based on Futurus Bank's earnings. Ms. Phipps' annual
performance bonus is contingent on the same eligibility criteria discussed
earlier for Mr. Butler. If the bonus criteria are met, Ms. Phipps may receive up
to 25% of her base salary in the form of an annual bonus.
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Ms. Phipps' agreement also provides that Futurus Financial Services will
grant Ms. Phipps an incentive stock option to purchase 5,000 shares of our
common stock at an exercise price of $10.00 per share. Ms. Phipps may receive an
additional stock option to purchase 2,500 shares of our common stock if Futurus
Bank meets or exceeds 110% of the board of directors' annual plan for fiscal
year 2001. Ms. Phipps' options, if granted, would be issued under our stock
incentive plan and may constitute up to 6.8% of the shares reserved for issuance
under the plan. Ms. Phipps' options would generally become exercisable in equal
one-fifth annual increments over a five-year period.
The agreement also generally provides that, for a period of 18 months
following the termination of Ms. Phipps employment, she will not compete with
Futurus Bank in the banking business nor solicit our clients nor the associates
employed by us. The non-competition and non-solicitation provisions of the
agreement would only apply if Ms. Phipps terminates her employment without cause
or in connection with a change of control, or if we terminate her employment
with cause.
The initial term of Ms. Phipps' agreement is three years, and is renewable
and terminable under the same conditions as stated earlier for Mr. Butler's
employment agreement.
DIRECTOR COMPENSATION
Our payment of director compensation will depend on various factors,
including our profitability. When deemed appropriate, we anticipate paying cash
director fees of $250 per board of directors meeting attended and $100 per
committee meeting attended. Prior to paying director compensation, we will adopt
director compensation policies that conform to applicable law.
ORGANIZERS' WARRANTS
The organizers intend to purchase a total of 218,000 shares of common stock
in the offering at a price of $10.00 per share. This represents 24.2% of the
minimum number of shares being offered and 19.8% of the maximum number of shares
being offered.
Eight of our ten organizers have guaranteed a portion of the $1,000,000 line
of credit with The Bankers Bank. In recognition of the efforts made and
financial risks undertaken by our organizers in organizing Futurus Financial
Services and Futurus Bank, we will issue to our organizers, at no cost to them,
warrants to purchase additional shares of our common stock at a price of $10.00
per share, subject to adjustment for stock splits, recapitalizations or other
similar events. If an organizer purchases 20,000 or more shares of common stock
in this offering, we will issue that organizer a warrant to purchase one share
of common stock for each share purchased. If an organizer purchases less than
20,000 shares, we will issue that organizer a warrant to purchase one share of
common stock for every two shares purchased. Our organizers may purchase up to
208,000 shares through the exercise of these warrants. The warrants will vest in
one-third annual increments over a period of three years beginning on the
one-year anniversary of the date of this prospectus. The warrants will remain
exercisable for the ten-year period following the date of this prospectus.
Additionally, if Futurus Bank's capital falls below the minimum level determined
by the Office of the Comptroller of the Currency, we may be directed to require
our organizers to exercise or forfeit their warrants.
STOCK INCENTIVE PLAN
GENERAL. Futurus Financial Services' 2000 Stock Incentive Plan provides us
with the flexibility to grant incentive stock options and non-qualified stock
options to our organizers, directors, executive officers and other individuals
employed by us for the purpose of giving them a proprietary interest in and
encouraging them to remain involved with Futurus Financial Services or Futurus
Bank. The board of directors has reserved 110,000 shares of common stock, an
amount equal to 12.2% of the minimum number of shares offered and 10.0% of the
maximum shares offered, for issuance under the plan. The
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number of shares reserved for issuance may be adjusted in the event of a stock
split, recapitalization or similar event as described in the plan.
Our executive officers will be issued stock option awards under the plan in
connection with the employment agreements that we have entered into with them.
See "Executive Compensation--Employment Agreements" on page 40.
ADMINISTRATION. The plan is administered by our Compensation Committee. The
committee members are appointed by the board of directors of Futurus Financial
Services, which considers the standards contained in both Section 162(m) of the
Internal Revenue Code and Rule 16(b)(3) under the Securities Exchange Act when
appointing members to the committee. The committee will have the authority to
grant awards under the plan, to determine the terms of each award, to interpret
the provisions of the plan and to make all other determinations that it may deem
necessary or advisable to administer the plan.
The plan permits the committee to grant stock options to eligible persons.
The committee may grant these options on an individual basis or design a program
providing for grants to a group of eligible persons. The committee determines,
within the limits of the plan, the number of shares of common stock subject to
an option, to whom an option is granted, the exercise price and forfeiture or
termination provisions of each option. Unless otherwise permitted by the
committee, a holder of a stock option generally may not transfer the option
during his or her lifetime.
OPTION TERMS. The plan provides for incentive stock options and
non-qualified stock options. The committee will determine whether an option is
an incentive stock option or a non-qualified stock option when it grants the
option, and the option will be evidenced by an agreement describing the material
terms of the option. The maximum number of shares of common stock with respect
to which options may be granted during any one-year period to any participant
may not exceed 75,000.
The committee determines the exercise price of an option. The exercise price
of an incentive stock option may not be less than the fair market value of the
common stock on the date of the grant, or less than 110% of the fair market
value if the participant owns more than 10% of the outstanding common stock of
Futurus Financial Services or its affiliates. When the incentive stock option is
exercised, Futurus Financial Services will be entitled to place a legend on the
certificates representing the shares of common stock purchased upon exercise of
the option to identify them as shares of common stock purchased upon the
exercise of an incentive stock option. The exercise price of non-qualified stock
options may not be less than 85% of the fair market value of the common stock on
the date that the option is awarded, based upon any reasonable measure of fair
market value. The committee may permit the exercise price to be paid in cash, by
the delivery of previously owned shares of common stock, through a cashless
exercise executed through a broker or by having a number of shares of common
stock otherwise issuable at the time of exercise withheld. The committee may
make cash awards designed to cover tax obligations of participants that result
from the receipt or exercise of a stock option.
The committee will also determine the term of an option, which may not
exceed ten years. Additionally, any incentive stock option granted to a
participant who owns more than 10% of the outstanding common stock of Futurus
Financial Services or its affiliates will not be exercisable more than five
years after the date the option is granted. Subject to any further limitations
in the applicable agreement, if a participant's employment is terminated, an
incentive stock option will expire and become unexercisable no later than three
months after the date of termination of employment. If, however, termination of
employment is due to death or disability, one year may be substituted for the
three-month period. Incentive stock options are also subject to the further
restriction that the aggregate fair market value, determined as of the date of
the grant, of common stock as to which any incentive stock option first becomes
exercisable in any calendar year is limited to $100,000 per recipient. If
incentive stock options covering common stock with a value in excess of $100,000
first become
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exercisable in any one calendar year, the excess will be non-qualified options.
For purposes of determining which options, if any, have been granted in excess
of the $100,000 limit, options will be considered in the order they were
granted.
TERMINATION OF OPTIONS. The terms of particular options may provide that
they terminate, among other reasons, upon the holder's termination of employment
or other status with Futurus Financial Services or any affiliate, upon a
specified date, upon the holder's death or disability, or upon the occurrence of
a change in control of Futurus Financial Services or Futurus Bank. An agreement
may provide that if the holder dies or becomes disabled, the holder's estate or
personal representative may exercise the option. The committee may, within the
terms of the plan and the applicable agreement, cancel, accelerate, pay or
continue an option that would otherwise terminate for the reasons discussed
above.
CERTAIN REORGANIZATIONS. The plan provides for appropriate adjustment, as
determined by the committee, in the number and kind of shares and the exercise
price subject to unexercised options in the event of any change in the
outstanding shares of common stock by reason of any subdivision or combination
of shares, payment of a stock dividend or other increase or decrease in the
number of outstanding shares effected without the receipt of consideration. In
the event of certain corporate reorganizations, the committee may, within the
terms of the plan and the applicable agreement, substitute, cancel (with or
without consideration), accelerate, remove restrictions or otherwise adjust the
terms of an option.
AMENDMENT AND TERMINATION OF THE PLAN. The board of directors has the
authority to amend or terminate the plan. The board of directors is not required
to obtain shareholder approval to amend or terminate the plan, but may condition
any amendment or termination of the plan upon shareholder approval if it
determines that shareholder approval is necessary or appropriate under tax,
securities, or other laws. The board's action may not adversely affect the
rights of a holder of a stock option without the holder's consent.
FEDERAL INCOME TAX CONSEQUENCES. The following discussion outlines
generally the federal income tax consequences of participation in the plan.
Individual circumstances may vary and each participant should rely on his or her
own tax counsel for advice regarding federal income tax treatment under the
plan.
- INCENTIVE STOCK OPTIONS. A participant who exercises an incentive stock
option will not be taxed when he or she exercises the option or a portion
of the option. Instead, the participant will be taxed when he or she sells
the shares of common stock purchased upon exercise of the incentive stock
option. The participant will be taxed on the difference between the price
he or she paid for the common stock and the amount for which he or she
sells the common stock. If the participant does not sell the shares of
common stock prior to two years from the date of grant of the incentive
stock option and one year from the date the common stock is transferred to
him or her, any gain will be a capital gain, and we will not be entitled
to a corresponding deduction. If the participant sells the shares of
common stock at a gain before that time, the difference between the amount
the participant paid for the common stock and the lesser of its fair
market value on the date of exercise or the amount for which the stock is
sold will be taxed as ordinary income and we will be entitled to a
corresponding deduction. If the participant sells the shares of common
stock for less than the amount he or she paid for the stock prior to the
one- or two-year period indicated, no amount will be taxed as ordinary
income, and the loss will be taxed as a capital loss. Exercise of an
incentive stock option may subject a participant to, or increase a
participant's liability for, the alternative minimum tax.
- NON-QUALIFIED OPTIONS. A participant will not recognize income upon the
grant of a non-qualified option or at any time before the exercise of the
option or a portion of the option. When the
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participant exercises a non-qualified option or portion of the option, he
or she will recognize compensation taxable as ordinary income in an amount
equal to the excess of the fair market value of the common stock on the
date the option is exercised over the price paid for the common stock, and
Futurus Financial Services will then be entitled to a corresponding
deduction.
Depending upon the time period for which shares of common stock are held
after exercise of a non-qualified option, the sale or other taxable disposition
of shares acquired through the exercise of a non-qualified option generally will
result in a short- or long-term capital gain or loss equal to the difference
between the amount realized on the disposition and the fair market value of such
shares when the non-qualified option was exercised.
Special rules apply to a participant who exercises a non-qualified option by
paying the exercise price, in whole or in part, by the transfer of shares of
common stock to Futurus Financial Services and to a participant who is subject
to the reporting requirements of Section 16 of the Securities Exchange Act of
1934, as currently in effect.
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RELATED PARTY TRANSACTIONS
We expect to enter into banking and other business transactions in the
ordinary course of business with our directors and officers, including members
of their families and corporations, partnerships or other organizations in which
they have a controlling interest. If these transactions occur, each transaction
will:
- In the case of banking transactions, be on substantially the same terms,
including price or interest rate and collateral, as those prevailing at
the time for comparable transactions with unrelated parties, and any
banking transactions will not be expected to involve more than the normal
risk of collectibility or present other unfavorable features to Futurus
Bank;
- In the case of business transactions, be on terms no less favorable than
could be obtained from an unrelated third party; and
- In the case of all related party transactions, be approved by a majority
of the directors, including a majority of the directors who do not have an
interest in the transaction.
In addition to transactions in the ordinary course of our business, our
operations have been and will continue to be funded through a line of credit
from The Bankers Bank. On December 31, 1999, the total amount of our line of
credit was $500,000, of which $170,000 was outstanding. In June 2000, we
increase our line of credit to $1,000,000. The loan bears interest at 0.50%
below the prime rate, as printed in the Money Rates section of THE WALL STREET
JOURNAL, and is due on June 5, 2001. Eight of our ten organizers have guaranteed
a portion of the line of credit. We plan to repay the line of credit after the
close of the offering.
We expect to have a referral relationship with Real Estate Financial
Services, a retail mortgage lending company that is principally owned by two
members of our board of directors, Gregory A. Janicki and Deborah M. Janicki.
Currently, Real Estate Financial Services refers both commercial and consumer
business to various financial institutions. Our proposed referral relationship
with Real Estate Financial Services will satisfy the conditions above and will
be on terms comparable to those of Real Estate Financial Services' existing
relationships with other financial institutions.
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DESCRIPTION OF CAPITAL STOCK OF FUTURUS FINANCIAL SERVICES
COMMON STOCK
Our articles of incorporation authorize our board of directors, without
shareholder approval, to issue up to 10,000,000 shares of common stock, no par
value, of which at least 900,000 shares will be issued in this offering. As of
the date of this prospectus, 110,000 shares of our common stock, or an amount
equal to 12.2% of the minimum shares offered and 10.0% of the maximum shares
offered, were reserved for issuance under our stock incentive plan and 208,000
shares of our common stock were reserved for issuance upon the exercise of the
warrants to be granted to our organizers.
All shares of our common stock will be entitled to share equally in
dividends from legally available funds, when, as and if declared by our board of
directors. We do not anticipate that we will pay any cash dividends on our
common stock in the near future. If we were to voluntarily or involuntarily
liquidate or dissolve, all shares of our common stock would be entitled to share
equally in all of our remaining assets available for distribution to our
shareholders. Each holder of common stock will be entitled to one vote for each
share on all matters submitted to the shareholders. Whenever we issue new shares
of capital stock, holders of our common stock will not have any right to acquire
authorized but unissued capital stock of Futurus Financial Services. No
cumulative voting, redemption, sinking fund or conversion rights or provisions
apply to our common stock. All shares of our common stock issued in the offering
as described in this prospectus will be fully paid and non-assessable.
PREFERRED STOCK
Our articles of incorporation also authorize our board of directors, without
shareholder approval, to issue up to 2,000,000 shares of preferred stock, no par
value. Our board of directors may determine the terms of the preferred stock.
Preferred stock may have voting rights, subject to applicable law and as
determined by our board of directors. Although we have neither issued nor have
any present plans to issue any preferred stock, the ownership and control of
Futurus Financial Services by the holders of our common stock would be diluted
if we were to issue preferred stock that had voting rights.
TRANSFER AGENT
The transfer agent and registrar for our common stock is SunTrust Bank,
Atlanta, Georgia.
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SELECTED PROVISIONS OF THE ARTICLES OF INCORPORATION AND BYLAWS
PROTECTIVE PROVISIONS
GENERAL. Shareholders' rights and related matters are governed by the
Georgia Business Corporation Code and Futurus Financial Services' articles of
incorporation and bylaws. Futurus Financial Services' articles of incorporation
and bylaws contain protective provisions that would have the effect of impeding
an attempt to change or remove Futurus Financial Services' management or to gain
control of Futurus Financial Services in a transaction not supported by its
board of directors. These provisions are discussed in more detail below. In
general, one purpose of these provisions is to assist Futurus Financial
Services' board of directors in playing a role in connection with attempts to
acquire control of Futurus Financial Services. They allow the board of directors
to further and protect Futurus Financial Services' interests, and those of its
shareholders as appropriate under the circumstances, by enhancing the board's
ability to maximize the value to be received by the shareholders upon a sale.
Although Futurus Financial Services' management believes the protective
provisions are beneficial to Futurus Financial Services' shareholders, they also
may tend to discourage some takeover bids. As a result, Futurus Financial
Services' shareholders may be deprived of opportunities to sell some or all of
their shares at prices that represent a premium over prevailing market prices.
On the other hand, defeating undesirable acquisition offers can be a very
expensive and time-consuming process. To the extent that the protective
provisions discourage undesirable proposals, Futurus Financial Services may be
able to avoid those expenditures of time and money.
The protective provisions also may discourage open market purchases by a
potential acquirer. These purchases could increase the market price of the
common stock temporarily, enabling shareholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the provisions
could decrease the market price of the common stock by making the stock less
attractive to persons who invest in securities in anticipation of price
increases from potential acquisition attempts. The provisions also could make it
more difficult and time consuming for a potential acquirer to obtain control of
Futurus Financial Services by replacing its board of directors and management.
Furthermore, the provisions could make it more difficult for Futurus Financial
Services' shareholders to replace the board of directors or management, even if
a majority of the shareholders believes that replacing them would be in Futurus
Financial Services' best interests. As a result, the protective provisions could
tend to keep the incumbent board of directors and management in place.
Futurus Financial Services' articles of incorporation also contain a
provision that eliminates the potential personal liability of directors for
monetary damages in specific circumstances. In addition, Futurus Financial
Services' bylaws contain certain provisions that provide indemnification for our
directors, agents and the associates employed by us. The protective provisions
and the provisions relating to elimination of liability and indemnification of
directors, agents and our associates are discussed more fully below.
PREFERRED STOCK. The existence of preferred stock could impede a takeover
of Futurus Financial Services without the approval of our board of directors.
This is because the board of directors could issue shares of preferred stock to
persons friendly to current management, which could render more difficult or
discourage any attempt to gain control of Futurus Financial Services through a
proxy contest, tender offer, merger or otherwise. In addition, the issuance of
shares of preferred stock with voting rights may adversely affect the rights of
the holders of common stock and, in various circumstances, could decrease the
market price of the common stock.
STAGGERED TERMS FOR BOARD OF DIRECTORS. Futurus Financial Services' board
of directors is divided into three classes. Directors serve staggered terms,
which means that roughly one-third of the directors will be elected each year at
Futurus Financial Services' annual meeting of shareholders. The initial term
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of the Class I directors expires in 2001, the initial term of the Class II
directors expires in 2002 and the initial term of the Class III directors
expires in 2003. Thereafter, each director will serve for a term of three years.
This means that unless the existing directors were to resign, it would take at
least two annual meetings of Futurus Financial Services' shareholders to replace
a majority of its directors. Any amendment of this provision adopted by less
than two-thirds of the entire board of directors would require the affirmative
vote of the holders of at least two-thirds of the outstanding shares of common
stock; otherwise, the amendment would only require the affirmative vote of at
least a majority of the outstanding shares of common stock.
CHANGE IN NUMBER OF DIRECTORS. Futurus Financial Services' articles of
incorporation provides that any change in the number of directors, as set forth
in its bylaws, would have to be made by the affirmative vote of two-thirds of
the entire board of directors or by the affirmative vote of the holders of at
least two-thirds of the issued and outstanding shares of common stock.
REMOVAL OF DIRECTORS. Futurus Financial Services' articles of incorporation
provide that one or more directors may be removed for cause during their terms
only by the affirmative vote of the holders of a majority of the issued and
outstanding shares of common stock entitled to vote in an election of directors.
Directors may also be removed during their terms without cause only by the
affirmative vote of the holders of two-thirds of the issued and outstanding
shares of common stock entitled to vote in an election of directors. Any
amendment of this provision adopted by less than two-thirds of the entire board
of directors would require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of common stock; otherwise, the amendment
would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
SUPERMAJORITY VOTING ON SELECTED TRANSACTIONS. Futurus Financial Services'
articles of incorporation, with exceptions, require that any merger or similar
transaction involving Futurus Financial Services or any sale or other
disposition of all or substantially all of its assets will require the
affirmative vote of a majority of Futurus Financial Services' directors then in
office and the affirmative vote of the holders of at least two-thirds of the
outstanding shares of common stock. However, if Futurus Financial Services'
board of directors has approved the particular transaction by the affirmative
vote of two-thirds of the entire board, then the applicable provisions of
Georgia law would govern and shareholder approval of the transaction would
require only the affirmative vote of the holders of a majority of the
outstanding shares of common stock entitled to vote on the transaction. Any
amendment of this provision adopted by less than two-thirds of the entire board
of directors would require the affirmative vote of the holders of at least
two-thirds of the outstanding shares of common stock; otherwise, the amendment
would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
LIMITATIONS ON SELECTED ACQUISITIONS OF VOTING SECURITIES. Under the Change
in Bank Control Act, a person who wishes to acquire (as defined) 10% or more of
a bank holding company's voting securities must file a notice with the Federal
Reserve 60 days prior to the acquisition to give the Federal Reserve an
opportunity to disapprove the proposed acquisition. During our first five years
of operations, our articles of incorporation provide that if a person is
required to file a notice with the Federal Reserve under the Change in Bank
Control Act, then the person must also file a notice with our board of directors
at the same time. Our board of directors also has 60 days to disapprove an
acquisition if it finds, in its sole discretion, that the acquisition would not
be in the best interests of Futurus Financial Services and its shareholders. In
determining what is in the best interests of Futurus Financial Services and its
shareholders, our board of directors is required to give due consideration to
all relevant factors, including the short- and long-term effects of the
acquisition on the associates employed by us, our clients, our shareholders and
our other constituents, and the impact of the acquisition, as perceived by our
board of directors, on its ability to effectively manage Futurus Financial
Services and achieve its strategic objectives. If our board of directors
disapproves the acquisition, which requires the affirmative
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vote of at least two-thirds of the directors then in office, and the acquisition
is nevertheless consummated, that portion of voting securities held by the
acquirer exceeding 10% of our outstanding voting securities will not be entitled
to any voting rights. This provision will cease to be effective on April 1,
2005. Any amendment of this provision adopted by less than two-thirds of the
entire board of directors will require the affirmative vote of the holders of at
least two-thirds of the outstanding shares of common stock; otherwise, the
amendment would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
EVALUATION OF AN ACQUISITION PROPOSAL. Futurus Financial Services' articles
of incorporation provide the factors that the board of directors must consider
in evaluating whether an acquisition proposal made by another party is in the
best interests of Futurus Financial Services and its shareholders. The term
"acquisition proposal" refers to any offer of another party to:
- Make a tender offer or exchange offer for the common stock or any other
equity security of Futurus Financial Services;
- Merge Futurus Financial Services with another corporation; or
- Purchase or otherwise acquire all or substantially all of the properties
and assets owned by Futurus Financial Services.
The board, in evaluating an acquisition proposal, is required to consider
all relevant factors, including:
- The expected social and economic effects of the transaction on the
associates employed by us, our clients and other constituents, such as our
suppliers of goods and services;
- The expected social and economic effects on the communities within which
we operate; and
- The payment being offered by the other corporation in relation to (a) our
current value at the time of the proposal as determined in a freely
negotiated transaction and (b) the board of directors' estimate of our
future value as an independent company at the time of the proposal.
We have included this provision in our articles of incorporation because
serving our community is one of the reasons we are organizing Futurus Bank. As a
result, the board believes its obligation in evaluating an acquisition proposal
extends beyond evaluating merely the payment being offered in relation to the
market or book value of the common stock at the time of the proposal.
While the value of what is being offered to shareholders in exchange for
their stock is the main factor when weighing the benefits of an acquisition
proposal, the board believes it is appropriate also to consider all other
relevant factors. For example, the board will evaluate what is being offered in
relation to the current value of Futurus Financial Services at the time of the
proposal as determined in a freely negotiated transaction and in relation to the
board's estimate of the future value of Futurus Financial Services as an
independent concern at the time of the proposal. A takeover bid often places the
target corporation virtually in the position of making a forced sale, sometimes
when the market price of its stock may be depressed. The board believes that
frequently the payment offered in such a situation, even though it may exceed
the value at which shares are then trading, is less than that which could be
obtained in a freely negotiated transaction. In a freely negotiated transaction,
management would have the opportunity to seek a suitable partner at a time of
its choosing and to negotiate for the most favorable price and terms that would
reflect not only Futurus Financial Services' current value, but also its future
value.
One effect of the provision requiring our board of directors to take into
account specific factors when considering an acquisition proposal may be to
discourage a tender offer in advance. Often an offeror consults the board of a
target corporation before or after beginning a tender offer in an attempt to
prevent a contest from developing. In our board's opinion, this provision will
strengthen its
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position in dealing with any potential offeror that might attempt to acquire
Futurus Financial Services through a hostile tender offer. Another effect of
this provision may be to dissuade shareholders who might be displeased with the
board's response to an acquisition proposal from engaging Futurus Financial
Services in costly litigation.
The articles of incorporation would not make an acquisition proposal
regarded by the board as being in Futurus Financial Services' best interests
more difficult to accomplish. It would, however, permit the board to determine
that an acquisition proposal was not in Futurus Financial Services' best
interests, and thus to oppose it, on the basis of the various factors that the
board deems relevant. In some cases, opposition by the board might have the
effect of maintaining incumbent management.
Any amendment of this provision adopted by less than two-thirds of the
entire board of directors would require the affirmative vote of the holders of
at least two-thirds of the outstanding shares of common stock; otherwise, the
amendment would only require the affirmative vote of at least a majority of the
outstanding shares of common stock.
INDEMNIFICATION
Futurus Financial Services' bylaws contain indemnification provisions that
provide that directors, officers, employed associates and agents of Futurus
Financial Services (collectively, the "insiders") will be indemnified against
expenses that they actually and reasonably incur if they are successful on the
merits of a claim or proceeding. In addition, the bylaws provide that Futurus
Financial Services will advance to its insiders reasonable expenses of any claim
or proceeding so long as the insider furnishes Futurus Financial Services with
(1) a written affirmation of his or her good faith belief that he or she has met
the applicable standard of conduct and (2) a written statement that he or she
will repay any advances if it is ultimately determined that he or she is not
entitled to indemnification.
When a case or dispute is settled or otherwise not ultimately determined on
its merits, the indemnification provisions provide that Futurus Financial
Services will indemnify insiders when they meet the applicable standard of
conduct. The applicable standard of conduct is met if the insider acted in a
manner he or she in good faith believed to be in or not opposed to Futurus
Financial Services' best interests and, in the case of a criminal action or
proceeding, if the insider had no reasonable cause to believe his or her conduct
was unlawful. Futurus Financial Services' board of directors, its shareholders
or independent legal counsel determines whether the insider has met the
applicable standard of conduct in each specific case.
Futurus Financial Services' bylaws also provide that the indemnification
rights contained in the bylaws do not exclude other indemnification rights to
which an insider may be entitled under any bylaw, resolution or agreement,
either specifically or in general terms approved by the affirmative vote of the
holders of a majority of the shares entitled to vote. Futurus Financial Services
can also provide for greater indemnification than is provided for in the Bylaws
if it chooses to do so, subject to approval by its shareholders. Futurus
Financial Services may not, however, indemnify an insider for liability arising
out of circumstances that would cause the insider to remain liable for his or
her actions as described under "--Limitation of Liability" on page 49.
The indemnification provisions of the bylaws specifically provide that
Futurus Financial Services may purchase and maintain insurance on behalf of any
insider against any liability asserted against and incurred by him or her in his
or her capacity as a director, officer, employed associate or agent whether or
not Futurus Financial Services would have had the power to indemnify against
such liability.
Futurus Financial Services is not aware of any pending or threatened action,
suit or proceeding involving any of its insiders for which indemnification from
Futurus Financial Services may be sought.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Futurus
Financial Services under the foregoing provisions,
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or otherwise, Futurus Financial Services 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.
LIMITATION OF LIABILITY
Futurus Financial Services' articles of incorporation eliminate, with
exceptions, the potential personal liability of a director for monetary damages
to Futurus Financial Services and to its shareholders for breach of a duty as a
director. There is no elimination of liability for:
- a breach of duty involving appropriation of a business opportunity of
Futurus Financial Services;
- an act or omission not in good faith or involving intentional misconduct
or a knowing violation of law;
- a transaction from which the director derives an improper material
tangible personal benefit; or
- any payment of a dividend or approval of a stock repurchase that is
illegal under the Georgia Business Corporation Code.
This provision does not eliminate or limit the right of Futurus Financial
Services or its shareholders to seek injunctive or other equitable relief not
involving monetary damages.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of the offering, Futurus Financial Services will have
between 900,000 and 1,100,000 shares of common stock outstanding. These shares
of common stock will be freely tradable without restriction, except that
"affiliates" of Futurus Financial Services must comply with the resale
limitations of Rule 144 under the Securities Act. Rule 144 defines an
"affiliate" of a company as a person who directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the company. Affiliates of a company generally include its directors,
officers and principal shareholders.
In general, under Rule 144, affiliates will be 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 common stock; or
- the average weekly trading volume during the four calendar weeks preceding
his or her sale.
Sales under Rule 144 are also subject to certain manner of sale provisions,
notice requirements and the availability of current public information about
Futurus Financial Services. Affiliates will not be subject to the volume
restrictions and other limitations under Rule 144 beginning 90 days after their
status as an affiliate terminates.
We intend to issue warrants to purchase up to a total of 208,000 shares of
common stock, representing an amount equal to 23.1% of the minimum number of
shares offered and 18.9% of the maximum number of shares offered. We have also
reserved 110,000 shares of common stock, representing 12.2% of the minimum
shares offered and 10.0% of the maximum shares offered, for issuance under our
stock incentive plan. Of the 110,000 shares reserved for our stock incentive
plan, up to 47,500 shares or 43.2% of the reserved shares will be awarded under
the terms of the employment agreements entered into with our executive officers.
We intend to register the shares issuable upon exercise of these warrants and
options. Upon registration, these shares will be eligible for resale in the
public market without restriction by persons who are not affiliates of Futurus
Financial Services, and to the extent they are held by affiliates, under
Rule 144 without a holding period.
Prior to the offering, there has been no public market for the common stock,
and we cannot predict the effect, if any, that the sale of shares or the
availability of shares for sale will have on the market price prevailing from
time to time. Nevertheless, sales of substantial amounts of common stock in the
public market could adversely affect prevailing market prices and our ability to
raise equity capital in the future.
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SUPERVISION AND REGULATION
Both Futurus Financial Services and Futurus Bank will be subject to
extensive state and federal banking regulations that impose restrictions on and
provide for general regulatory oversight of our operations. These laws are
generally intended to protect depositors and not shareholders. The following
discussion describes the material elements of the regulatory framework that will
apply.
FUTURUS FINANCIAL SERVICES
Since Futurus Financial Services will own all of the capital stock of
Futurus Bank, it will be a bank holding company under the federal Bank Holding
Company Act of 1956. As a result, Futurus Financial Services will primarily be
subject to the supervision, examination, and reporting requirements of the Bank
Holding Company Act and the regulations of the Federal Reserve.
ACQUISITIONS OF BANKS. The Bank Holding Company Act requires every bank
holding company to obtain the Federal Reserve's prior approval before:
- acquiring direct or indirect ownership or control of any voting shares of
any bank if, after the acquisition, the bank holding company will directly
or indirectly own or control more than 5% of the bank's voting shares;
- acquiring all or substantially all of the assets of any bank; or
- merging or consolidating with any other bank holding company.
Additionally, the Bank Holding Company Act provides that the Federal Reserve
may not approve any of these transactions if it would result in or tend to
create a monopoly or, substantially lessen competition or otherwise function as
a restraint of trade, unless the anticompetitive effects of the proposed
transaction are clearly outweighed by the public interest in meeting the
convenience and needs of the community to be served. The Federal Reserve is also
required to consider the financial and managerial resources and future prospects
of the bank holding companies and banks concerned and the convenience and needs
of the community to be served. The Federal Reserve's consideration of financial
resources generally focuses on capital adequacy, which is discussed below.
Under the Bank Holding Company Act, if adequately capitalized and adequately
managed, Futurus Financial Services or any other bank holding company located in
Georgia may purchase a bank located outside of Georgia. Conversely, an
adequately capitalized and adequately managed bank holding company located
outside of Georgia may purchase a bank located inside Georgia. In each case,
however, restrictions may be placed on the acquisition of a bank that has only
been in existence for a limited amount of time or will result in specified
concentrations of deposits. For example, Georgia law prohibits a bank holding
company from acquiring control of a financial institution until the target
financial institution has been incorporated for five years. As a result, no bank
holding company may acquire control of Futurus Financial Services until after
the fifth anniversary date of Futurus Bank's incorporation.
CHANGE IN BANK CONTROL. Subject to various exceptions, the Bank Holding
Company Act and the Change in Bank Control Act, together with related
regulations, require Federal Reserve approval 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. Control is rebuttably presumed to exist
if a person or company acquires 10% or more, but less than 25%, of any class of
voting securities and either:
- the bank holding company has registered securities under Section 12 of the
Securities Act of 1934, or
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- no other person owns a greater percentage of that class of voting
securities immediately after the transaction.
We intend to register our common stock under the Securities Exchange Act of
1934. The regulations provide a procedure for challenge of the rebuttable
control presumption.
PERMITTED ACTIVITIES. On November 12, 1999 President Clinton signed the
Gramm-Leach-Bliley Act, which amends the Bank Holding Company Act and greatly
expands the activities in which bank holding companies and affiliates of banks
are permitted to engage. The Act eliminates many federal and state law barriers
to affiliations among banks and securities firms, insurance companies, and other
financial service providers. The provisions of the Act relating to permitted
activities of bank holding companies and affiliates of banks became effective on
March 11, 2000. Since we do not intend to begin our operations until May 2000,
the following discussion describes the activities in which Futurus Financial
Services will be permitted to engage under the Bank Holding Company Act, as
amended by the Gramm-Leach-Bliley Act.
Generally, if Futurus Financial Services qualifies and elects to become a
financial holding company, which is described below, it may engage in activities
that are:
- financial in nature;
- incidental to a financial activity; or
- complementary to a financial activity and do not pose a substantial risk
to the safety or soundness of depository institutions or the financial
system generally.
In determining whether a particular activity is financial in nature or
incidental or complementary to a financial activity, the Federal Reserve must
consider (1) the purpose of the Bank Holding Company and Gramm-Leach-Bliley
Acts, (2) changes or reasonable expected changes in the marketplace in which
financial holding companies compete and in the technology for delivering
financial services, and (3) whether the activity is necessary or appropriate to
allow financial holding companies to effectively compete with other financial
service providers and to efficiently deliver information and services. The Act
expressly lists the following activities as financial in nature:
- lending, trust and other banking activities;
- insuring, guaranteeing, or indemnifying against loss or harm, or providing
and issuing annuities, and acting as principal, agent, or broker for these
purposes, in any state;
- providing financial, investment, or advisory services;
- issuing or selling instruments representing interests in pools of assets
permissible for a bank to hold directly;
- underwriting, dealing in or making a market in securities;
- other activities that the Federal Reserve may determine to be so closely
related to banking or managing or controlling banks as to be a proper
incident to managing or controlling banks;
- foreign activities permitted outside of the United States if the Federal
Reserve has determined them to be usual in connection with banking
operations abroad;
- merchant banking through securities or insurance affiliates; and
- insurance company portfolio investments.
To qualify to become a financial holding company, our depository institution
subsidiaries must be well capitalized and well managed and must have a Community
Reinvestment Act rating of at least "satisfactory." Additionally, we must file
an election with the Federal Reserve to become a financial
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holding company and provide the Federal Reserve with 30 days written notice
prior to engaging in a permitted financial activity. Although we do not have any
immediate plans to file an election with the Federal Reserve to become a
financial holding company, one of the primary reasons we selected the holding
company structure was to have increased flexibility. Accordingly, if deemed
appropriate in the future, we may elect to become a financial holding company.
Under the Bank Holding Company Act, a bank holding company, which has not
qualified or elected to become a financial holding company, is generally
prohibited from engaging in or acquiring direct or indirect control of more than
5% of the voting shares of any company engaged in nonbanking activities unless,
prior to the enactment of the Gramm-Leach-Bliley Act, the Federal Reserve found
those activities to be so closely related to banking as to be a proper incident
to the business of banking. Activities that the Federal Reserve has found to be
so closely related to banking as to be a proper incident to the business of
banking include:
- factoring accounts receivable;
- acquiring or servicing loans;
- leasing personal property;
- conducting discount securities brokerage activities;
- performing selected data processing services;
- acting as agent or broker in selling credit life insurance and other types
of insurance in connection with credit transactions; and
- performing selected insurance underwriting activities.
Despite prior approval, the Federal Reserve may order a bank holding company
or its subsidiaries to terminate any of these activities or to terminate its
ownership or control of any subsidiary when it has reasonable cause to believe
that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
any of its bank subsidiaries.
SUPPORT OF SUBSIDIARY INSTITUTIONS. Under Federal Reserve policy, Futurus
Financial Services is expected to act as a source of financial strength for
Futurus Bank and to commit resources to support Futurus Bank. This support may
be required at times when, without this Federal Reserve policy, Futurus
Financial Services might not be inclined to provide it. In addition, any capital
loans made by Futurus Financial Services to Futurus Bank will be repaid only
after its deposits and various other obligations are repaid in full. In the
unlikely event of Futurus Financial Services' bankruptcy, any commitment by it
to a federal bank regulatory agency to maintain the capital of Futurus Bank will
be assumed by the bankruptcy trustee and entitled to a priority of payment.
FUTURUS BANK
Since Futurus Bank will be chartered as a national bank, it will primarily
be subject to the supervision, examination and reporting requirements of the
National Bank Act and the regulations of the Office of the Comptroller of the
Currency. The Office of the Comptroller of the Currency will regularly examine
Futurus Bank's operations and has the authority to approve or disapprove
mergers, the establishment of branches and similar corporate actions. The Office
of the Comptroller of the Currency also has the power to prevent the continuance
or development of unsafe or unsound banking practices or other violations of
law. Additionally, Futurus Bank's deposits will be insured by the FDIC to the
maximum extent provided by law. Futurus Bank will also be subject to numerous
state and federal statutes and regulations that will affect its business,
activities and operations.
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BRANCHING. National banks are required by the National Bank Act to adhere
to branching laws applicable to state banks in the states in which they are
located. Under current Georgia law, Futurus Bank may open branch offices
throughout Georgia with the prior approval of the Office of the Comptroller of
the Currency and the Georgia Department of Banking and Finance. In addition,
with prior regulatory approval, Futurus Bank will be able to acquire branches of
existing banks located in Georgia. Futurus Bank and any other national or
state-chartered bank generally may branch across state lines by merging with
banks in other states if allowed by the applicable states' laws. Georgia law,
with limited exceptions, currently permits branching across state lines through
interstate mergers.
Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, Georgia has not opted-in to this provision.
Therefore, interstate merger is the only method through which a bank located
outside of Georgia may branch into Georgia. This provides a limited barrier of
entry into the Georgia banking market, which protects us from an important
segment of potential competition. However, because Georgia has elected not to
opt-in, our ability to establish a new start-up branch in another state may be
limited. Many states that have elected to opt-in have done so on a reciprocal
basis, meaning that an out-of-state bank may establish a new start-up branch
only if their home state has also elected to opt-in. Consequently, until Georgia
changes its election, the only way we will be able to branch into states that
have elected to opt-in on a reciprocal basis will be through interstate merger.
PROMPT CORRECTIVE ACTION. The Federal Deposit Insurance Corporation
Improvement Act of 1991 establishes a system of prompt corrective action to
resolve the problems of undercapitalized financial institutions. Under this
system, the federal banking regulators have established five capital categories
(well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized) in which all institutions are
placed. Federal banking regulators are required to take various mandatory
supervisory actions and are authorized to take other discretionary actions with
respect to institutions in the three undercapitalized categories. The severity
of the action depends upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, the banking regulator must
appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by regulation the
relevant capital level for each category.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency. A
bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to various limitations. The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5% of an undercapitalized subsidiary's assets or the
amount required to meet regulatory capital requirements. An undercapitalized
institution is also generally prohibited from increasing its average total
assets, making acquisitions, establishing any branches or engaging in any new
line of business, except under an accepted capital restoration plan or with FDIC
approval. The regulations also establish procedures for downgrading an
institution and a lower capital category based on supervisory factors other than
capital.
FDIC INSURANCE ASSESSMENTS. The FDIC has adopted a risk-based assessment
system for insured depository institutions that takes into account the risks
attributable to different categories and concentrations of assets and
liabilities. The system assigns an institution to one of three capital
categories: (1) well capitalized; (2) adequately capitalized; and
(3) undercapitalized. These three categories are substantially similar to the
prompt corrective action categories described above, with the "undercapitalized"
category including institutions that are undercapitalized, significantly
undercapitalized, and critically undercapitalized for prompt corrective action
purposes. The FDIC also assigns an institution to one of three supervisory
subgroups based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the FDIC determines
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to be relevant to the institution's financial condition and the risk posed to
the deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry. This
assessment rate is adjusted quarterly and is set at 2.08 cents per $100 of
deposits for the second quarter of 2000.
The FDIC may terminate its insurance of deposits if it finds that the
institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC.
COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires that,
in connection with examinations of financial institutions within their
respective jurisdictions, the Federal Reserve, the FDIC, or the Office of the
Comptroller of the Currency, shall evaluate the record of each financial
institution in meeting the credit needs of its local community, including low
and moderate income neighborhoods. These facts are also considered in evaluating
mergers, acquisitions, and applications to open a branch or facility. Failure to
adequately meet these criteria could impose additional requirements and
limitations on Futurus Bank. Under the Gramm-Leach-Bliley Act, banks with
aggregate assets of not more than $250 million will be subject to a Community
Reinvestment Act examination only once every 60 months if the bank receives an
outstanding rating, once every 48 months if it receives a satisfactory rating
and as needed if the rating is less than satisfactory. Additionally, banks will
be required to publicly disclose the terms of various Community Reinvestment
Act-related agreements.
OTHER REGULATIONS. Interest and other charges collected or contracted for
by Futurus Bank are subject to state usury laws and federal laws concerning
interest rates. Futurus Bank's loan operations are also subject to 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 these federal laws.
The deposit operations of Futurus Bank are 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 to implement that act, which govern 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.
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CAPITAL ADEQUACY
Futurus Financial Services and Futurus Bank will be required to comply with
the capital adequacy standards established by the Federal Reserve, in the case
of Futurus Financial Services, and the Office of the Comptroller of the
Currency, in the case of Futurus Bank. The Federal Reserve has established a
risk-based and a leverage measure of capital adequacy for bank holding
companies. Futurus Bank is also subject to risk-based and leverage capital
requirements adopted by the Office of the Comptroller of the Currency, which are
substantially similar to those adopted by the Federal Reserve for bank holding
companies.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles among banks and bank
holding companies, to account for off-balance-sheet exposure, and to
minimize disincentives for holding liquid assets. Assets and
off-balance-sheet items, such as letters of credit and unfunded loan
commitments, are assigned to broad risk categories, each with appropriate risks
weights. The resulting capital ratios represent capital as a percentage of total
risk-weighted assets and off-balance-sheet items.
The minimum guideline for the ratio of total capital to risk-weighted assets
is 8%. Total capital consists of two components, Tier 1 Capital and Tier 2
Capital. Tier 1 Capital generally consist of common stock, minority interests in
the equity accounts of consolidated subsidiaries, noncumulative perpetual
preferred stock, and a limited amount of cumulative perpetual preferred stock,
less goodwill and other specified intangible assets. Tier 1 Capital must equal
at least 4% of risk-weighted assets. Tier 2 Capital generally consists of
subordinated debt, other preferred stock, and a limited amount of loan loss
reserves. The total amount of Tier 2 Capital is limited to 100% of Tier 1
Capital.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. The guidelines also provide that bank holding companies experiencing
internal growth, as will be the case for Futurus Financial Services, or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels. Furthermore, the Federal Reserve has
indicated that it will consider a bank holding company's Tier 1 Capital leverage
ratio, after deducting all intangibles and other indicators of capital strength
in evaluating proposals for expansion or new activities.
We are also subject to capital guidelines issued by our respective primary
regulators, which provide for minimum ratios of total capital to total assets.
Failure to meet capital guidelines could subject a bank or bank holding
company to a variety of enforcement remedies, including issuance of a capital
directive, the termination of deposit insurance by the FDIC, a prohibition on
accepting brokered deposits, and other restrictions on its business. As
described above, significant additional restrictions can be imposed on
FDIC-insured depository institutions that fail to meet applicable capital
requirements. See "--Futurus Bank--Prompt Corrective Action" on page 57.
PAYMENT OF DIVIDENDS
Futurus Financial Services is a legal entity separate and distinct from
Futurus Bank. The principal sources of Futurus Financial Services' cash flow,
including cash flow to pay dividends to its shareholders, are dividends that
Futurus Bank pays to its sole shareholder, Futurus Financial Services. Statutory
and regulatory limitations apply to Futurus Bank's payment of dividends to
Futurus Financial Services as well as to Futurus Financial Services' payment of
dividends to its shareholders.
59
<PAGE>
Futurus Bank is required by federal law to obtain the prior approval of the
Office of the Comptroller of the Currency for payments of dividends if the total
of all dividends declared by our board of directors in any year will exceed
(1) the total of Futurus Bank's net profits for that year, plus (2) Futurus
Bank's retained net profits of the preceding two years, less any required
transfers to surplus.
The payment of dividends by Futurus Financial Services and Futurus Bank may
also be affected by other factors, such as the requirement to maintain adequate
capital above regulatory guidelines. If, in the opinion of the Office of the
Comptroller of the Currency, Futurus Bank were engaged in or about to engage in
an unsafe or unsound practice, the Office of the Comptroller of the Currency
could require, after notice and a hearing, that Futurus Bank stop or refrain
engaging in the practice. The federal banking agencies have indicated that
paying dividends that deplete a depository institution's capital base to an
inadequate level would be an unsafe and unsound banking practice. Under the
Federal Deposit Insurance Corporation Improvement Act of 1991, a depository
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. Moreover, the federal
agencies have issued policy statements that provide that bank holding companies
and insured banks should generally only pay dividends out of current operating
earnings. See "--Futurus Bank--Prompt Corrective Action" on page 57.
RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES
Futurus Financial Services and Futurus Bank are subject to the provisions of
Section 23A of the Federal Reserve Act. Section 23A places limits on the amount
of:
- a bank's loans or extensions of credit to affiliates;
- a bank's investment in affiliates;
- assets a bank may purchase from affiliates, except for real and personal
property exempted by the Federal Reserve;
- the amount of loans or extensions of credit to third parties
collateralized by the securities or obligations of affiliates; and
- a bank's guarantee, acceptance or letter of credit issued on behalf of an
affiliate.
The total amount of the above transactions is limited in amount, as to any
one affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus. In addition to the limitation
on the amount of these transactions, each of the above transactions must also
meet specified collateral requirements. Futurus Bank must also comply with other
provisions designed to avoid the taking of low-quality assets.
Futurus Financial Services and Futurus Bank are also subject to the
provisions of Section 23B of the Federal Reserve Act which, among other things,
prohibit an institution from engaging in the above transactions with affiliates
unless the transactions are on terms substantially the same, or at least as
favorable to the institution or its subsidiaries, as those prevailing at the
time for comparable transactions with nonaffiliated companies.
Futurus Bank is also subject to restrictions on extensions of credit to its
executive officers, directors, principal shareholders and their related
interests. These extensions of credit (1) 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 (2) must not involve more
than the normal risk of repayment or present other unfavorable features.
60
<PAGE>
PRIVACY
Financial institutions are required to disclose their policies for
collecting and protecting confidential information. Customers generally may
prevent financial institutions from sharing personal financial information with
nonaffiliated third parties except for third parties that market the
institutions' own products and services. Additionally, financial institutions
generally may not disclose consumer account numbers to any nonaffiliated third
party for use in telemarketing, direct mail marketing or other marketing through
electronic mail to consumers.
PROPOSED LEGISLATION AND REGULATORY ACTION
New regulations and statutes are regularly proposed that contain
wide-ranging proposals for altering the structures, regulations and competitive
relationships of the nation's financial institutions. We cannot predict whether
or in what form any proposed regulation or statute will be adopted or the extent
to which our business may be affected by any new regulation or statute.
EFFECT OF GOVERNMENTAL MONETARY POLICES
Our earnings are affected by domestic economic conditions and the monetary
and fiscal policies of the United States government and its agencies. The
Federal Reserve's monetary policies have had, and are likely to continue to
have, an important impact on the operating results of commercial banks through
its power to implement national monetary policy in order, among other things, to
curb inflation or combat a recession. The monetary policies of the Federal
Reserve affect the levels of bank loans, investments and deposits through its
control over the issuance of United States government securities, its regulation
of the discount rate applicable to member banks and its influence over reserve
requirements to which member banks are subject. We cannot predict the nature or
impact of future changes in monetary and fiscal policies.
61
<PAGE>
LEGAL MATTERS
Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia will pass upon the
validity of the shares of common stock offered by this prospectus for Futurus
Financial Services. Smith Helms Mulliss & Moore, LLP, Charlotte, North Carolina
is acting as counsel for the sales agent in connection with legal matters
relating to the shares of common stock offered by this prospectus.
EXPERTS
Futurus Financial Services' audited financial statements at December 31,
1999, and for the period from August 12, 1999 through December 31, 1999,
included in this prospectus have been included in reliance on the report of
Porter Keadle Moore, LLP, independent certified public accountants, given on the
authority of that firm as experts in accounting and auditing.
REPORTS TO SHAREHOLDERS
Upon the effective date of the Registration Statement on Form SB-2 that
registers the shares of common stock offered by this prospectus with the
Securities and Exchange Commission, Futurus Financial Services will be subject
to the reporting requirements of the Securities Exchange Act, which include
requirements to file annual reports on Form 10-KSB and quarterly reports on
Form 10-QSB with the Securities and Exchange Commission. This reporting
obligation will exist for at least one year and will continue for successive
fiscal years, except that these reporting obligations may be suspended for any
subsequent fiscal year if at the beginning of such year the common stock is held
of record by less than 300 persons.
At any time that Futurus Financial Services is not a reporting company, it
will furnish its shareholders with annual reports containing audited financial
information for each fiscal year on or before the date of the annual meeting of
shareholders as required by Rule 80-6-1-.05 of the Georgia Department of Banking
and Finance. Futurus Financial Services' fiscal year ends on December 31.
Additionally, Futurus Financial Services will also furnish such other reports as
it may determine to be appropriate or as otherwise may be required by law.
ADDITIONAL INFORMATION
Futurus Financial Services has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 under the Securities Act with
respect to the shares of common stock offered by this prospectus. This
prospectus does not contain all of the information contained in the Registration
Statement. For further information with respect to Futurus Financial Services
and the common stock, we refer you to the Registration Statement and the
exhibits to it. The Registration Statement may be examined and copied at the
public reference facilities maintained by the Securities and Exchange Commission
at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549
and at the regional offices of the Securities and Exchange Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Seven World Trade Center, 13th Floor, New York, New York 10048.
You may read and copy our registration statement, and any other materials filed
by us with the Securities and Exchange Commission, at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may also obtain information on the operation of the
Public Reference Room by calling 1-800-SEC-0330. The Securities and Exchange
Commission also maintains a Web site (http://www.sec.gov) that contains
registration statements, reports, proxy and information statements and other
information regarding registrants, such as Futurus Financial Services, that file
electronically with the Securities and Exchange Commission.
Futurus Financial Services and the organizers have filed various
applications with the FDIC, the Federal Reserve, the Georgia Department of
Banking and Finance and the Office of the Comptroller
62
<PAGE>
of the Currency. These applications and the information they contain are not
incorporated into this prospectus. You should rely only on information contained
in this prospectus and in the related Registration Statement in making an
investment decision. To the extent that other available information not
presented in this prospectus, including information available from Futurus
Financial Services and information in public files and records maintained by the
FDIC, the Federal Reserve, the Georgia Department of Banking and Finance and the
Office of the Comptroller of the Currency, is inconsistent with information
presented in this prospectus or provides additional information, that
information is superseded by the information presented in this prospectus and
should not be relied on. Projections appearing in the applications are based on
assumptions that the organizers believe are reasonable, but as to which they can
make no assurances. Futurus Financial Services specifically disaffirms those
projections for purposes of this prospectus and cautions you against relying on
them for purposes of making an investment decision.
63
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Balance Sheet as of March 31, 2000 (Unaudited).............. F-2
Statement of Operations for the Quarter Ended March 31, 2000
(Unaudited)............................................... F-3
Statement of Cash Flows for Quarter Ended March 31, 2000
(Unaudited)............................................... F-4
Notes to Unaudited Financial Statements..................... F-5
Report of Independent Certified Public Accountants.......... F-6
Balance Sheet as of December 31, 1999....................... F-7
Statement of Operations for the Period from August 12, 1999
(inception) to
December 31, 1999......................................... F-8
Statement of Changes in Stockholders' Deficit for the Period
from
August 12, 1999 (inception) to December 31, 1999.......... F-9
Statement of Cash Flows for the Period from August 12, 1999
(inception) to
December 31, 1999......................................... F-10
Notes to Financial Statements............................... F-11
</TABLE>
F-1
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
(UNAUDITED)
MARCH 31, 2000
<TABLE>
<S> <C>
ASSETS
Cash........................................................ $ 10,607
Premises and equipment, net................................. 59,044
Other assets................................................ 31,601
---------
$ 101,252
---------
LIABILITIES AND STOCKHOLDER'S DEFICIT
Accounts payable and accrued expenses....................... $ 53,796
Note payable--line of credit................................ 398,829
---------
Total liabilities..................................... 452,625
---------
Stockholder's deficit:
Preferred stock, no par value, 2,000,000 shares
authorized;
no shares issued or outstanding......................... --
Common stock, no par value, 10,000,000 shares authorized;
1 share issued and outstanding.......................... 10
Deficit accumulated during the development stage.......... (351,383)
---------
Total stockholder's deficit........................... (351,373)
---------
$ 101,252
=========
</TABLE>
See accompanying notes to unaudited financial statements.
F-2
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE QUARTER ENDED MARCH 31, 2000
<TABLE>
<S> <C>
Expenses:
Legal and consulting...................................... $101,055
Officer compensation...................................... 39,006
Other operating........................................... 27,756
--------
Net loss.............................................. $167,817
========
</TABLE>
See accompanying notes to unaudited financial statements.
F-3
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
(UNAUDITED)
FOR THE QUARTER ENDED MARCH 31, 2000
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.................................................. $(167,817)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other assets................................ (16,694)
Increase in accounts payable and accrued expenses....... 18,086
---------
Net cash used in operating activities................. (166,425)
---------
Cash flows from investing activities--purchase of
equipment................................................. (58,356)
Cash flows from financing activities--proceeds from note
payable................................................... 228,829
Net increase in cash........................................ 4,048
Cash at beginning of period................................. 6,559
---------
Cash at end of period....................................... $ 10,607
=========
Supplemental disclosure of cash flow information:
Cash paid for interest.................................... $ 3,546
=========
</TABLE>
See accompanying notes to unaudited financial statements.
F-4
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) ORGANIZATION
Futurus Financial Services, Inc. (the Company) was incorporated for the
purpose of becoming a bank holding company. The Company intends to acquire 100%
of the outstanding common stock of Futurus Bank, N.A. (the Bank) (Proposed),
which will operate in northern Fulton County in the metropolitan Atlanta,
Georgia area. The organizers of the Bank filed a joint application to charter
the Bank with the Office of the Comptroller of Currency and the Federal Deposit
Insurance Corporation on October 15, 1999. Provided that the application is
timely approved and necessary capital is raised, it is expected that operations
will commence in the fourth quarter of 2000.
(2) BASIS OF PRESENTATION
The accompanying financial statements have not been audited. The results of
operations are not necessarily indicative of the results of operations for the
full year or any other interim periods. The accounting principles followed by
the Company and the methods of applying these principles conform with generally
accepted accounting principles and with general practices within the banking
industry.
F-5
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
Futurus Financial Services, Inc.
We have audited the accompanying balance sheet of Futurus Financial
Services, Inc. (a development stage corporation) as of December 31, 1999, and
the related statements of operations, changes in stockholder's deficit and cash
flows for the period from August 12, 1999 (inception) to December 31, 1999.
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 Futurus Financial
Services, Inc. as of December 31, 1999 and the results of its operations and its
cash flows from August 12, 1999 (inception) to December 31, 1999 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
Futurus Financial Services, Inc. will continue as a going concern. As discussed
in note 1 to the financial statements, the Company is in the organization stage
and has not commenced operations. Also, as discussed in note 3, the Company's
future operations are dependent on obtaining capital through an initial stock
offering and obtaining the necessary final regulatory approvals. These factors
and the expense associated with development of a new banking institution raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are described in note 3. The
financial statements do not include any adjustments relating to the
recoverability of reported asset amounts or the amount of liabilities that might
result from the outcome of this uncertainty.
Atlanta, Georgia
June 28, 2000
F-6
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<S> <C>
ASSETS
Cash........................................................ $ 6,559
Other assets................................................ 15,595
---------
$ 22,154
=========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Accounts payable and accrued expenses....................... $ 35,710
Note payable--line of credit................................ 170,000
---------
Total liabilities..................................... 205,710
---------
Stockholder's deficit:
Preferred stock, no par value, 2,000,000 shares
authorized;
no shares issued or outstanding......................... --
Common stock, no par value, 10,000,000 shares authorized;
1 share issued and outstanding.......................... 10
Deficit accumulated during the development stage.......... (183,566)
---------
Total stockholder's deficit........................... (183,556)
---------
$ 22,154
=========
</TABLE>
See accompanying notes to financial statements.
F-7
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<S> <C>
Expenses:
Legal and consulting...................................... $ 90,795
Officer compensation...................................... 48,047
Regulatory fees........................................... 15,000
Other operating........................................... 29,724
--------
Net loss.............................................. $183,566
========
</TABLE>
See accompanying notes to financial statements.
F-8
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CHANGES IN STOCKHOLDER'S DEFICIT
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
DEFICIT
ACCUMULATED
DURING THE
PREFERRED COMMON DEVELOPMENT
STOCK STOCK STAGE TOTAL
--------- -------- ----------- --------
<S> <C> <C> <C> <C>
Issuance of common stock to organizer................ $ -- 10 -- 10
Net loss............................................. -- -- (183,566) (183,566)
--------- -- -------- --------
Balance, December 31, 1999........................... $ -- 10 (183,566) (183,556)
========= == ======== ========
</TABLE>
See accompanying notes to financial statements.
F-9
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM AUGUST 12, 1999 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss.................................................. $(183,566)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in other assets................................ (15,595)
Increase in accounts payable and accrued expenses....... 35,710
---------
Net cash used in operating activities................. (163,451)
---------
Cash flows from financing activities:
Sale of organization share of common stock................ 10
Proceeds from note payable................................ 170,000
---------
Net cash provided by financing activities............. 170,010
---------
Net increase in cash........................................ 6,559
Cash at beginning of period................................. --
---------
Cash at end of period....................................... $ 6,559
=========
Supplemental disclosure of cash flow information:
Cash paid for interest.................................... $ 1,249
=========
</TABLE>
See accompanying notes to financial statements.
F-10
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Futurus Financial Services, Inc. (the Company) was incorporated for the
purpose of becoming a bank holding company. The Company intends to acquire 100%
of the outstanding common stock of Futurus Bank, N.A. (the Bank) (Proposed),
which will operate in northern Fulton County in the metropolitan Atlanta,
Georgia area. The organizers of the Bank filed a joint application to charter
the Bank with the Office of the Comptroller of Currency and the Federal Deposit
Insurance Corporation on October 15, 1999. Provided that the application is
timely approved and necessary capital is raised, it is expected that operations
will commence in the fourth quarter of 2000.
Operations through December 31, 1999 relate primarily to expenditures by the
organizers for incorporating and organizing the Company. All expenditures by the
organizers are considered expenditures of the Company.
The Company plans to raise between $9,000,000 and $11,000,000 through an
offering of its common stock at $10 per share, of which $8,500,000 will be used
to capitalize the Bank. The organizers and directors expect to subscribe for a
minimum of approximately $2,180,000 of the Company's stock.
In connection with the Company's formation and initial offering, warrants to
purchase shares of common stock at $10.00 per share will be issued to the
organizing stockholders. Organizing stockholders who purchase 20,000 or more
shares of common stock in the initial offering will receive warrants to purchase
one share of common stock for each share they purchase. Organizing stockholders
who purchase less than 20,000 shares in the initial offering will receive
warrants to purchase one share of common stock for each two shares they
purchase. The warrants are exercisable on each of the three succeeding
anniversaries of the date of the close of the initial offering at the initial
offering price of $10.00 per share and expire ten years after the date of grant.
The Company also intends to reserve 110,000 shares for the issuance of options
under an employee incentive stock option plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION COSTS
Costs incurred for the organization of the Company and the Bank (consisting
principally of legal, accounting, consulting and incorporation fees) are being
expensed as incurred.
DEFERRED OFFERING EXPENSES
Costs incurred in connection with the stock offering, consisting of direct,
incremental costs of the offering, are being 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 is calculated by dividing net loss by the
minimum number of common shares (900,000), which would be outstanding should the
offering be successful, as prescribed
F-11
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
in Staff Accounting Bulletin Topic 1:B. The proforma net loss per share for the
period ended December 31, 1999 was $.20 per share.
(3) LIQUIDITY AND GOING CONCERN CONSIDERATIONS
The Company incurred a net loss of $183,566 for the period from August 12,
1999 (inception) to December 31, 1999. At December 31, 1999, liabilities
exceeded assets by $183,556.
At December 31, 1999, the Company is funded by a line of credit from a bank.
Management believes that the current level of expenditures is well within the
financial capabilities of the organizers and adequate to meet existing
obligations and fund current operations, but obtaining final regulatory
approvals and commencing banking operations is dependent on successfully
completing the stock offering.
To provide permanent funding for its operation, the Company is currently
offering between 900,000 and 1,100,000 shares of its no par value common stock
at $10 per share in an initial public offering. Costs related to the
organization and registration of the Company's common stock will be paid from
the gross proceeds of the offering. The share issued, which is outstanding at
December 31, 1999, will be redeemed concurrently with the consummation of the
offering.
(4) LINE OF CREDIT
Organization, offering and pre-opening costs incurred prior to the opening
for business will be funded under a $500,000 line of credit. The terms of the
existing line of credit, which is guaranteed by most of the organizers, include
a maturity of August 23, 2000 and interest, payable quarterly, calculated at
one-half percent below the prime interest rate.
(5) PREFERRED STOCK
Shares of preferred stock may be issued from time to time in one or more
series as established by resolution of the Board of Directors of the Company.
Each resolution shall include the number of shares issued, preferences, special
rights and limitations as determined by the Board.
(6) COMMITMENTS
The Company has entered into an employment agreement with its President and
Chief Executive Officer, providing for an initial term of three years commencing
August 20, 1999. The agreement provides for a base salary, an incentive bonus
based on the Company's performance, stock options, and other perquisites
commensurate with his employment.
The Company has entered into an agreement whereby it will receive marketing
services including logo development, branch design consultation and introductory
collateral. The Company has committed to pay a total of $50,000 for these
services, of which $20,000 has been paid as of December 31, 1999.
The Company has entered into an operating lease agreement for its temporary
corporate office. The lease agreement expires on August 31, 2000 and requires
minimum payments totaling $8,440 in 2000.
F-12
<PAGE>
FUTURUS FINANCIAL SERVICES, INC.
(A DEVELOPMENT STAGE CORPORATION)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(6) COMMITMENTS (CONTINUED)
In connection with its proposed issuance of common stock as described in
note 1, the Company plans to enter into an agreement with an investment banker.
The estimated fee to be paid to the investment banker upon successful completion
of the offering is approximately a 5% commission on the sale of 100,000 shares
by the investment banker, as well as reimbursable expenses estimated to total
$65,000. If the offering is abandoned by the Company, however, the Company will
remain obligated to the investment banker for its reimbursable expenses
estimated to total $65,000.
(7) INCOME TAXES
The following summarizes the sources and expected tax consequences of future
taxable deductions which comprise the net deferred taxes at December 31, 1999:
<TABLE>
<S> <C>
Deferred tax assets:
Pre-opening expenses...................................... $ 68,809
Operating loss carryforwards.............................. 873
--------
Total gross deferred tax assets........................... 69,682
Less valuation allowance.................................. (69,682)
--------
Net deferred taxes........................................ $ --
========
</TABLE>
The future tax consequences of the differences between the financial
reporting and tax basis of the Company's assets and liabilities resulted in a
net deferred tax asset. A valuation allowance was established for the net
deferred tax asset, as the realization of these deferred tax assets is dependent
on future taxable income.
F-13
<PAGE>
SUBSCRIPTION FORM FOR FUTURUS FINANCIAL SERVICES, INC.
Note: Before completing this form please read the Prospectus and the
Subscription Form Guide and Instructions attached to this Subscription Form.
NUMBER OF SHARES
<TABLE>
<S> <C> <C> <C> <C>
Price Per Share
(1) Number of Shares X $10.00 = (2) Total Amount Due
</TABLE>
Please note: The minimum number of shares that may be subscribed for is 100. The
maximum number of shares any individual may subscribe for is 60,000.
METHOD OF PAYMENT
(3) Please enclose a check, bank draft, or money order payable to THE BANKERS
BANK, ESCROW AGENT FOR FUTURUS FINANCIAL SERVICES, INC. for the total amount
due.
BROKER DEALER NAME AND ADDRESS
(4) If purchased through a broker/dealer, please list the name, address, and
phone number of the broker dealer in the space provided.
Broker Name: ___________________________________________________
Street Address: ________________________________________________
City:______________ State:______________ Zip Code:______________
Phone Number:____________________________________
STOCK REGISTRATION
(ONE OWNERSHIP PER STOCK ORDER FORM)
(5) Form of stock ownership (see "Item 5" to the included Subcription Form Guide
and Instructions for more information):
<TABLE>
<S> <C> <C>
/ / Individual / / Fiduciary Trust (Under Agreement Dated ) / / Partnership / /
/ / Joint Tenants / / *Uniform Transfer to Minors Corporation
/ / Tenants in Common / / *Uniform Gift to Minors / / **IRA
</TABLE>
------------------------------
*Minor's social security number required.
** Custodian name and signature required.
Name _______________ Social Security or Tax I.D. _______________
Name _____________________ Telephone ( )_____________________
Street Address _________________________________________________
City _________________ State ________________ Zip Code _________
State of Residence_______________
NASD AFFILIATION
(This section only applies to those individuals who meet the delineated
criteria.)
/ / Check here if you are a member of the National Association of Securities
Dealers, Inc. ("NASD"), a person associated with an NASD member, a member of the
immediate family of any such person to whose support such person contributes,
directly or indirectly, or the holder of an account in which an NASD member or
person associated with an NASD member has a beneficial interest. To comply with
conditions under which an exemption from the NASD's Interpretation with Respect
to Free-Riding and Withholding is available, you agree, if you have checked the
NASD affiliation box: (1) not to sell, transfer or hypothecate the shares
subscribed for herein for a period of three months following their issuance, and
(2) to report this subscription in writing to the applicable NASD member within
one day after the payment therefor.
A-1
<PAGE>
ACKNOWLEDGEMENTS
By signing below:
1. I acknowledge receipt of the Prospectus dated ____________, 2000. I
UNDERSTAND THAT I MAY NOT CHANGE OR REVOKE MY ORDER, AND THAT MY ORDER SHALL
SURVIVE MY DEATH OR DISABILITY, ONCE THE COMPANY'S REGISTRATION STATEMENT
HAS BEEN DECLARED EFFECTIVE BY THE SECURITIES AND EXCHANGE COMMISSION AND
THE COMPANY HAS RECEIVED MY CHECK, BANK DRAFT OR MONEY ORDER. I also certify
that this stock order is for my account.
2. I certify that:
(i) the social security number or taxpayer identification number given
herein is correct; and
(ii) I am not subject to backup withholding.*
*If you have been notified by the Internal Revenue Service that you are
subject to backup withholding because of under-reporting interest or
dividends on your tax return, you must cross out Item (ii) above.
3. I acknowledge that the Company has the right to accept or reject this order
form in whole or in part, for any reason whatsoever.
4. I certify that I am a bona fide resident of the State indicated on the
reverse side of this order form.
THIS FORM MUST BE SIGNED AND DATED. YOUR ORDER WILL BE FILLED IN ACCORDANCE WITH
THE PROVISIONS OF THE PROSPECTUS.
When signing as attorney, trustee, administrator or guardian, please give your
full title as such. If a corporation, in addition to the authorized agent's
signature, please print the corporation's name, as well as the authorized
agent's name and title. In case of joint tenants, each joint owner must sign.
<TABLE>
<S> <C> <C>
Signature Title (if applicable) Date
RETURN THIS FORM TO: BY HAND: BY MAIL:
Futurus Financial Services, Inc. Futurus Financial Services, Inc.
201 South Main Street P.O. Box 1145
Alpharetta, GA 30004 Alpharetta, GA 30009
ATTN: William M. Butler ATTN: William M. Butler
(770) 667-7899 (770) 667-7899
</TABLE>
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS AND ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK
INSURANCE FUND, OR ANY OTHER GOVERNMENTAL AGENCY.
INVESTMENT PRODUCTS: NOT FDIC-INSURED - NOT BANK-GUARANTEED - MAY LOSE VALUE
TO BE COMPLETED BY FUTURUS FINANCIAL SERVICES, INC.
Accepted as of ______________________, 2000, as to _____________________ shares.
FUTURUS FINANCIAL SERVICES, INC.
By: ___________________________________
_______________________________________
Signature
_______________________________________
Print Name
A-2
<PAGE>
SUBSCRIPTION FORM GUIDE AND INSTRUCTIONS
ITEMS 1 AND 2--Fill in the number of shares that you wish to purchase and the
total payment due. The amount due is determined by multiplying the number of
shares by the subscription price of $10.00 per share. The minimum purchase is
100 shares. The Company has reserved the right to reject any subscription
received in the offering, in whole or in part.
ITEM 3--Payment for shares may be made by check, bank draft or money order made
payable to THE BANKERS BANK, ESCROW AGENT FOR FUTURUS FINANCIAL SERVICES, INC.
DO NOT MAIL CASH. Your funds will be returned promptly if the offering is
terminated.
ITEM 4--If purchasing through a broker/dealer please list the name, address, and
phone number in this box.
ITEM 5--The stock transfer industry has developed a uniform system of
shareholder registrations that we will use in the issuance of the Company's
common stock. Print the name(s) in which you want the shares registered and the
mailing address of the registration. Include the first name, middle initial, and
last name of the shareholder. Avoid the use of two initials. Please omit words
that do not affect ownership rights, such as "Mrs.," "Mr.," "Dr.," "special
account," etc. SEE YOUR LEGAL OR FINANCIAL ADVISER IF YOU ARE UNSURE ABOUT THE
CORRECT REGISTRATION OF YOUR STOCK.
INDIVIDUAL--The shares are to be registered in an individual's name only. You
may not list any beneficiaries.
JOINT TENANTS--Joint tenants with right of survivorship identifies two or more
owners. When shares are held by joint tenants with rights of survivorship,
ownership automatically passes to the surviving joint tenant(s) upon the death
of any joint tenant. You may not list beneficiaries for this ownership.
TENANTS IN COMMON--Tenants in common may identify two or more owners. When
shares are held by tenants in common, upon the death of one co-tenant, ownership
of the shares will be held by the surviving co-tenant(s) and by the heirs of the
deceased co-tenant. All parties must agree to the transfer or sale of shares
held by tenants in common. You may not list beneficiaries for this ownership.
INDIVIDUAL RETIREMENT ACCOUNT--Individual Retirement Account ("IRA") holders may
make share purchases from their deposits through a pre-arranged
"trustee-to-trustee" transfer. Shares may only be held in a self-directed IRA.
The Company cannot offer a self-directed IRA. The Subscription Form must be
completed and executed by the IRA Custodian. Please contact the Company if you
have any questions about your IRA account.
UNIFORM GIFT TO MINORS--For resident of many states, shares may be held in the
name of a custodian for the benefit of a minor under the Uniform Transfers to
Minors Act. For residents in other states, shares may be held in a similar type
of ownership under the Uniform Gift to Minors Act of the individual states. For
either type of ownership, the minor is the actual owner of the shares with the
adult custodian being responsible for the investment until the child reaches
legal age. On the first line, print the first name, middle initial, and last
name of the custodian, with the abbreviation "CUST" and "Unif Tran Min Act" or
"Unif Gift Min Act" after the name. Print the first name, middle initial, and
last name of the minor on the second "NAME" line. Standard U.S. Postal Service
state abbreviations should be used to describe the appropriate state. For
example, shares held by John Doe as custodian for Susan Doe under the Ohio
Transfer to Minors Act will be abbreviated: "John Doe, CUST Susan Doe Unif Tran
Min Act. OH." Do not forget to use the minor's social security number. Only one
custodian and one minor may be designated.
CORPORATION/PARTNERSHIP--Corporations/Partnerships may purchase shares. Please
provide the Corporation's/Partnership's legal name and its tax identification
number.
FIDUCIARY/TRUST--Generally, fiduciary relationships (such as trusts, estates,
guardianships, etc.) are established under a form of trust agreement or pursuant
to a court order. Without a legal document establishing a fiduciary
relationship, your shares may not be registered in a fiduciary capacity. On the
first "NAME" line, print the first name, middle initial, and last name of the
fiduciary if the fiduciary is an individual. If the fiduciary is a corporation,
list the corporate title on the first "NAME" line. Following the name, print the
fiduciary "title" such as trustee, executor, personal representative, etc. On
the second "NAME" line, print either the name of the maker, donor, or testator
or the name of the beneficiary. Following the name, indicate the type of legal
document establishing the fiduciary relationship (agreement, court order, etc.).
In the blank after "Under Agreement Dated," fill in the date of the document
governing the relationship. The date of the document need not be provided for a
trust created by a will. An example of fiduciary ownership of stock in the case
of a trust is: "John D. Smith, Trustee for Thomas A. Smith Trust Under Agreement
Dated June 9, 1998."
A-3
<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NO ONE HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH
INFORMATION DIFFERENT FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS
NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED
IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS
OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Summary................................ 3
Risk Factors........................... 8
Caution Regarding Forward-Looking
Statements........................... 14
The Offering........................... 15
Use of Proceeds........................ 17
Capitalization......................... 19
Dividends.............................. 20
Management's Discussion and Analysis of
Financial Condition and Plan of
Operations........................... 21
Proposed Business of Futurus Financial
Services and Futurus Bank.............. 24
Management............................. 34
Executive Compensation................. 40
Related Party Transactions............. 46
Description of Capital Stock of Futurus
Financial Services................... 47
Selected Provisions of the Articles of
Incorporation and Bylaws............. 48
Shares Eligible for Future Sale........ 53
Supervision and Regulation............. 54
Legal Matters.......................... 62
Experts................................ 62
Reports to Shareholders................ 62
Additional Information................. 62
Index to Financial Statements.......... F-1
Appendix A: Subscription Form.......... A-1
</TABLE>
UNTIL 2000 (40 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS SALES AGENTS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
1,100,000 SHARES
FUTURUS FINANCIAL
SERVICES, INC.
A PROPOSED BANK HOLDING COMPANY FOR
[LOGO]
FUTURUS BANK, N.A.
(IN ORGANIZATION)
COMMON STOCK
---------------------
PROSPECTUS
---------------------
, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the applicable provisions of the laws of Georgia, the
Registrant's bylaws provide that the Registrant shall have the power to
indemnify its directors, officers, employees and agents against expenses
(including attorneys' fees) and liabilities arising from actual or threatened
actions, suits or proceedings, whether or not settled, to which they become
subject by reason of having served in such role if such director, officer,
employee or agent acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the Registrant and,
with respect to a criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. Advances against expenses shall be made
so long as the person seeking indemnification agrees to refund the advances if
it is ultimately determined that he or she is not entitled to indemnification. A
determination of whether indemnification of a director, officer, employee or
agent is proper because he or she met the applicable standard of conduct shall
be made (1) by the board of directors of the Registrant, (2) in certain
circumstances, by independent legal counsel in a written opinion or (3) by the
affirmative vote of a majority of the shares entitled to vote, but shares owned
by or are under voting control of directors who are at the time parties to the
proceeding may not vote on the determination.
In addition, the Registrant's articles of incorporation, subject to
exceptions, eliminates the potential personal liability of a director for
monetary damages to the Registrant and to the shareholders of the Registrant for
breach of a duty as a director. There is no release of liability for (1) a
breach of duty involving appropriation of a business opportunity of the
Registrant, (2) an act or omission involving intentional misconduct or a knowing
violation of law, (3) a transaction from which the director derives an improper
material tangible personal benefit or (4) as to any payment of a dividend or
approval of a stock repurchase that is illegal under the Georgia Business
Corporation Code. The articles of incorporation do not eliminate or limit the
right of the Registrant or its shareholders to seek injunctive or other
equitable relief not involving monetary damages.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses, other than underwriting discounts and commissions, of
the sale of the Registrant's common stock, no par value, are as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 3,600
National Association of Securities Dealers, Inc. Filing
Fee....................................................... 1,950
Blue Sky Fees and Expenses.................................. 26,000
Sales Agent's Legal Fees and Expenses....................... 30,000
Registrant's Legal Fees and Expenses........................ 75,000
Accounting Fees and Expenses................................ 4,000
Printing and Engraving Expenses............................. 55,000
Miscellaneous............................................... 24,450
--------
Total....................................................... $220,000
========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
On December 31, 1999, the Registrant issued to Gregory A. Janicki, in a
private placement, one share of the Registrant's Common Stock, no par value, for
an aggregate price of $10.00 in connection with the organization of the Company.
The sale to Mr. Janicki was exempt from registration under the Securities Act
pursuant to Section 4(2) of the Act because it was a transaction by an issuer
that did not involve a public offering.
II-1
<PAGE>
ITEM 27. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------------------- ------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement*
1.2 Form of Sales Agency Agreement (supercedes the Form of
Underwriting Agreement filed as Exhibit 1.1)**
3.1 Articles of Incorporation, as amended and restated*
3.2 Bylaws*
3.3 Board Resolution Adopting Amendment to Section 7.4 of the
Company's Bylaws
4.1 Specimen Common Stock Certificate*
4.2 See Exhibits 3.1, 3.2 and 3.3 for provisions of the Articles
of Incorporation and Bylaws defining rights of holders of
the Common Stock
5.1 Legal Opinion of Powell, Goldstein, Frazer & Murphy LLP*
10.1 Lease Agreement by and between Futurus Financial Services,
Inc. and Pioneer Real Estate Development, Inc. dated March
9, 2000 and entered into on March 14, 2000 (permanent
facility)*
10.2 Lease Agreement by and between Futurus Financial Services,
Inc. and Daniel B. Cawart d/b/a Alpharetta Square Shopping
Center dated February 15, 2000 (temporary facility)*
10.3 Promissory Note dated August 23, 1999 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty*
10.4 Form of Futurus Financial Services, Inc. Organizers' Warrant
Agreement*
10.5 Futurus Financial Services, Inc. 2000 Stock Incentive Plan*
10.6 Project Development and Construction Agreement dated
September 28, 1999 and accepted October 2, 1999 by and
between Futurus Financial Services, Inc. and KDA Financial,
Inc.*
10.7 Project Agreement dated November 30, 1999 by and between
Futurus Financial Services, Inc. and The Compass Group d/b/a
Stern Marketing Group*
10.8 Amended and Restated Employment Agreement dated as of August
20, 2000 by and between Futurus Bank, N.A. (In
Organization), Futurus Financial Services, Inc. and William
M. Butler*
10.9 Form of Employment Agreement by and between Futurus Bank,
N.A. (In Organization), Futurus Financial Services, Inc. and
R. Wesley Fuller*
10.10 Form of Employment Agreement by and between Futurus Bank,
N.A. (In Organization), Futurus Financial Services, Inc. and
Suzanne T. Phipps*
10.11 Promissory Note dated February 11, 2000 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty*
10.12 Letter of Agreement dated March 14, 2000 by and between
Futurus Financial Services, Inc. and KDA Financial, Inc.*
10.13 Project Agreement dated March 10, 2000 by and between
Futurus Financial Services, Inc. and The Compass Group d/b/a
Stern Marketing Group*
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------------------- ------------------------------------------------------------
<S> <C>
10.14 Promissory Note dated June 5, 2000 executed by Futurus
Financial Services, Inc. and accepted by The Bankers Bank,
Atlanta, Georgia, and form of Commercial Guaranty
10.15 Form of Escrow Agreement
23.1 Consent of Porter Keadle Moore, LLP dated February 7, 2000*
23.2 Consent of Powell, Goldstein, Frazer & Murphy LLP (contained
in Exhibit 5.1)
23.3 Consent of Porter Keadle Moore, LLP dated April 6, 2000*
23.4 Consent of Porter Keadle Moore, LLP dated July 5, 2000
24.1 Power of Attorney*
27.1 Financial Data Schedule (for SEC use only) 12/31/1999*
27.2 Financial Data Schedule (for SEC use only) 3/31/2000
99.1 Subscription Form (see Appendix A of the Prospectus)
</TABLE>
------------------------
* Previously filed.
** To be filed by amendment.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements of filing on Form SB-2 and authorized this
Registration Statement Amendment to be signed on its behalf by the undersigned
in the City of Alpharetta, State of Georgia, on June 30, 2000.
FUTURUS FINANCIAL SERVICES, INC.
By: /S/ WILLIAM M. BUTLER William M. Butler President and Chief Executive
Officer
In accordance with the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following persons in
the capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ WILLIAM M. BUTLER President and Chief
------------------------------------------- Executive Officer, June 30, 2000
William M. Butler Director*
/s/ C. Parke Day(+)
------------------------------------------- Secretary, Director June 30, 2000
C. Parke Day
/S/ NATHAN E. HARDWICK, IV(+)
------------------------------------------- Director June 30, 2000
Nathan E. Hardwick
/S/ MICHAEL S. HUG(+)
------------------------------------------- Director June 30, 2000
Michael S. Hug
/S/ DEBORAH M. JANICKI(+)
------------------------------------------- Director June 30, 2000
Deborah M. Janicki
/S/ GREGORY A. JANICKI(+)
------------------------------------------- Chairman of the Board of June 30, 2000
Gregory A. Janicki Directors
/S/ DONALD S. SHAPLEIGH, JR.(+)
------------------------------------------- Director June 30, 2000
Donald S. Shapleigh, Jr.
/s/ RICHARD W. STIMSON
------------------------------------------- Director June 30, 2000
Richard W. Stimson
------------------------------------------- Treasurer, Director June 30, 2000
Danny L. Tesney
/S/ JOEL P. WEINBACH(+)
------------------------------------------- Director June 30, 2000
Joel P. Weinbach
</TABLE>
* Principal executive, financial and accounting officer.
<TABLE>
<S> <C> <C> <C>
(+)By: /s/ WILLIAM H. BUTLER
--------------------------------------
William H. Butler
Attorney-in-fact
</TABLE>
II-4
