Mail Stop 4561
June 6, 2007
Mr. Kenneth L. Barber
Metro Bancshares, Inc.
2678 Hickory Level Road
Villa Rica, Georgia 30180
Re: Metro Bancshares, Inc.
Registration Statement on Form SB-2
File No. 333-142817
Filed May 10, 2007
Dear Mr. Barber:
We have reviewed your filing and have the following
comments.
Our accounting review is limited to the specific comments issued.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
General
1. Please note the updating requirements of Item 310(b) of
Regulation
S-B. Additionally, please also include an updated consent of your
independent accountants in your next amendment.
Cover Page of Prospectus
2. Please revise the first paragraph to disclose that the minimum
number of shares that an investor may purchase is 2,500 shares and
that you reserve the right to waive this requirement.
3. Please revise the second paragraph as follows:
* reconcile your statement that the organizers "intend to
subscribe
for an aggregate of up to 1,045,000 shares" with your statement on
page 10 that "the organizers may purchase additional shares in
this
offering, including up to 100% of the offering;" and
* disclose the exercise price of the warrants.
4. Please indicate that all shares purchased by the organizers
will
be purchased for investment purposes.
Summary, page 1
5. Please revise the preamble and the substance of this section to
"provide a brief overview of the key aspects of the offering" as
required by Instruction 503(a) of Regulation S-B.
Competition, page 1
6. Please revise this section as follows:
* define your "market area;"
* explain what you mean by "repricing of products and services;"
and
* explain how your "management experience...will attract
customers"
given the fact that only one of your directors has bank management
experience.
Products and Services, page 2
7. Please revise the first paragraph to
* distinguish between those products and services that you will
offer
on the first day that you open for business, those that you will
offer in the following twelve months and those that you will offer
in
the foreseeable future; and
* disclose the extent to which your ability to offer any of these
products and services is dependent upon attracting more capital.
Ownership by Management, page 3
8. Please revise this section as follows:
* disclose the maximum number and percentage of shares that will
be
beneficially owned by directors and officers assuming they
purchase
all the shares they intend to purchase in the offering, all shares
pursuant to the warrants and all shares pursuant to stock options;
* provide the percentage beneficially owned for both the minimum
and
maximum number of shares being sold in the offering;
* discuss the fact that they may purchase more than 1,045,000
shares;
and
* disclose the terms of the warrants including the exercise price.
Risk Factors, page 5
9. Please revise each risk factor to "provide the information
investors need to assess the magnitude of the risk." We refer you
to
Staff Legal Bulletin No.7 (sample comments 34 and 38). In some
cases, the consequence of a risk materializing may be that your
business fails.
10. We note your intention to grant options and warrants to
certain
organizers and employees which could dilute a prospective
investor`s
ownership percentage. Please enhance the current disclosures by
explaining how you would plan to account for these options and
warrants on the date the bank opens for business "day one" and for
subsequent reporting periods.
Risks Relating to our Business
11. Please add a risk factor addressing the risk of your
dependence
on one person, Mr. Barber, your sole officer, for all banking
expertise.
12. Please add a risk factor addressing the risk that you may not
be
able to establish a new bank because you have no customers, you
are
competing with many established local, regional, national and
international banks, you will have start up expenses and
challenges
and you may not be able to attract sufficient customers to support
a
new bank.
The Organizers as a group..., page 7
13. Please revise as follows:
* disclose that the organizers may purchase additional shares in
this
offering, including up to 100% of the offering; and
* disclose the percentage of shares they will own assuming they
purchase the all of the 1,045,000 shares and including the
warrants
and stock options you plan to give the organizers and executive
officers.
We intend to grant warrants..., page 8
14. Please revise the last two sentences to provide the data for
both
the minimum and maximum number of shares in the offering and to
include the stock options.
Purchases by our Organizers, page 11
15. Please revise this section as follows:
* clarify, in the first paragraph, that the organizers have not
made
a binding commitment to buy any shares and that they intend to
purchase between one and 1,045,000 shares;
* revise the third paragraph to include a discussion of the stock
options you intend to grant to organizers;
* revise the third paragraph to discuss who has the authority to
change the terms of the warrants; and
* revise the last sentence to include stock options and to note
the
possibility that the percentage of shares beneficially owned by
the
organizers may be higher if the organizers purchase more than the
1,045,000 shares.
Use of Proceeds, page 13
16. Please revise this section as follows:
* disclose, in the first sentence, the amount of the proceeds that
will be used to acquire all of the stock of Metro Bank;
* disclose, in the first paragraph, the amount of expenses
incurred
your organization and organization of Metro Bank and identify the
amount to be paid to organizers;
* disclose the amount of proceeds to be used to repay the line of
credit; and
* disclose, in the third paragraph, the "portion" of the proceeds
that you will retain.
Capitalization, page 14
17. We note that your "as adjusted" accumulated deficit during
development stage has increased from $143,492 to $470,113. You
also
disclose in footnote 3 that this increase is due to estimated pre-
opening and organization expenses, which includes legal,
accounting,
salaries and other expenses. Please revise your filing to
quantify
these costs by expense type and also to provide a concise
explanation
as to why your expenses will materially increase as a result of
the
proposed sale of your shares.
Management`s Discussion and Analysis or Plan of Operation, page 16
18. Please revise this section as follows:
* revise the caption and the substance of this section to comply
with
Item 303 (a) of Regulation S-B;
* provide more detail regarding your statement, in the third
paragraph, that you have identified all material expenditures for
the
next twelve months; and
* explain the basis for your statement, in the third paragraph,
that
the minimum net proceeds of $21 million "will be adequate capital
to
support the growth of both Metro Bancshares and Metro Bank for
their
first five years of operation."
Market Area and Competition, page 19
19. Please revise to provide more detail as to how you will
compete
with established national and international financial institutions
including, but not limited to, the following::
* provide more detail regarding your characterization, on page 19,
of
competition as "intense;"
* discuss how your ability to compete will be affected by the
regulatory limits on lending that will be imposed on you; and
* disclose the basis for your claim that your competitors do not
offer personalized service.
Security Ownership, page 31
20. Please revise as follows:
* include the stock options; and
* disclose that the organizers have indicated that they may
purchase
more shares in the offering.
* * * * * * * * * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company and each filing person
acknowledging that:
* the company or filing person is responsible for the adequacy and
accuracy of the disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company or filing person may not assert staff comments as a
defense in any proceeding initiated by the Commission or any
person
under the federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact John A. Spitz at (202) 551-3484 or John P.
Nolan, Accounting Branch Chief, at 202-551-3492 if you have
questions
regarding comments on the financial statements and related
matters.
Please contact either Jonathan E. Gottlieb at (202) 551-3416 or me
at
(202) 551-3448 with any other questions.
Sincerely,
Mark Webb
Legal Branch Chief
cc. Robert C. Schwartz, Esquire
Smith, Gambrell & Russell LLP
Suite 3100, Promenade II
1230 Peachtree Street, N.E.
Atlanta, Georgia 30309
Mr. Kenneth L. Barber
Metro Bancshares, Inc.
June 6, 2007
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