State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CSR, or the transition report or portion thereof, could not be filed within the prescribed time period.
Completed 2009 Financial StatementsBeach First National Bancshares Inc. (referred to herein on an unconsolidated basis as the “Company” and on a consolidated basis as “we”, “our”, or “us”) was not able to file a timely Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 Form 10-K”) by the prescribed due date without unreasonable effort and expense because the Company’s annual financial statements and the related audit process have not been finalized. The delay in completing the financial statements is primarily to allow for the receipt and our review of the results of an examination of our wholly-owned banking subsidiary, Beach First National Bank (the “Bank”) by the Office of the Comptroller of the Currency (the “OCC”). The completion of our annual financial statements has required more time than in prior years due to issues related to the regulatory and capital issues in connection with the Bank. Therefore, we were not able to file our 2009 Form 10-K by March 31, 2010. This notice contains unaudited information about our results which is subject to change in our 2009 Form 10-K. Further, as a result of the OCC’s recent examination, we will likely amend our unaudited results of operations for the period ending December 31, 2010 which were disclosed in the Company’s Current Report on Form 8-K filed on February 9, 2010.
In particular, the OCC’s recent examination has focused on the appropriateness of the Bank’s loan loss reserve. The OCC has directed the Bank to charge off certain loans and to increase the provision for loan losses to bring the March 31, 2010 quarter end allowance to approximately $20 million, which will require a provision of approximately $14 million. The impact on our results of operations will be an increase to our net loss of approximately $14 million. We are in the process of determining how much of this additional provision will be recorded in the fourth quarter of 2009, thus impacting our 2009 results, and how much will be recorded in the first quarter of 2010.
Due to the conditions and events discussed herein, we believe substantial doubt exists as to our ability to continue as a going concern. We have determined that significant additional sources of capital will be required for us to continue operations through 2010 and beyond. We have previously engaged financial advisors to assist in our efforts to raise additional capital and explore strategic alternatives to address our current and expected capital deficiencies. Although these efforts are ongoing, to date, they have been unsuccessful. As a result of our financial condition, our regulators are continually monitoring our capital adequacy. Based on their assessment of our ability to continue to operate in a safe and sound manner, our regulators may take other actions, including further enforcement actions, capital directives or even assumption of control of the Bank, to protect the interests of depositors insured by the FDIC. If the Bank is placed into FDIC receivership, it is highly likely that the Company would be required to cease operations and liquidate or seek bankruptcy protection. If the Company were to liquidate or seek bankruptcy protection, we do not believe that there would be any assets available to the holders of capital stock of the Company.
Forward-Looking Statements
Certain matters discussed in this Report on Form 12b-25 may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”) and as such, may involve risks and uncertainties. These forward-looking statements relate to, among other things, projections of future performance including our financial condition, the outcome of our ability to seek a strategic transaction, the potential action of our regulators, and whether or not we will be required to seek bankruptcy protection. Our actual results, performance, or achievements may differ significantly from the results, performance, or achievements expected or implied in such forward-looking statements. We do not undertake, and specifically disclaim any obligation, to update any forward looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.
