U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One) FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _________to_________
Commission File No. 000-32493
REGIONAL BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
South Carolina 57-1108717
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
206 South Fifth Street
Hartsville, South Carolina 29551
(Address of principal executive
offices, including zip code)
(843) 383-4333
(Registrant's telephone number, including area code)
----------------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
560,270 shares of common stock, $1.00 par value on May 1, 2001
REGIONAL BANKSHARES, INC.
Index
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - March 31, 2001 and December 31, 2000.............................3
Condensed Consolidated Statements of Income - Three months ended March 31, 2001 and 2000.................4
Condensed Consolidated Statements of Shareholders' Equity and Comprehensive Income -
Three months ended March 31, 2001......................................................................5
Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2001 and 2000.............6
Notes to Condensed Consolidated Financial Statements...................................................7-8
Item 2. Management's Discussion and Analysis or Plan of Operation..............................................9-13
PART II. OTHER INFORMATION
Item 2. Changes in Securities....................................................................................14
Item 6. Exhibits and Reports on Form 8-K.........................................................................14
(a) Exhibits............................................................................................14
(b) Reports on Form 8-K.................................................................................14
Signatures.......................................................................................................15
2
REGIONAL BANKSHARES, INC.
Condensed Consolidated Balance Sheets
March 31, December 31,
2001 2000
---- ----
Assets: (Unaudited)
Cash and cash equivalents:
Cash and due from banks ...................................................... $ 603,179 $ 1,408,628
Federal funds sold ........................................................... 5,145,000 4,610,000
------------ ------------
Total cash and cash equivalents ............................................ 5,748,179 6,018,628
------------ ------------
Securities available-for-sale .................................................. 352,911 346,709
Nonmarketable equity securities ................................................ 70,453 238,603
------------ ------------
Total investment securities ................................................ 423,364 585,312
------------ ------------
Loans receivable ............................................................... 17,584,296 15,157,361
Less allowance for loan losses ................................................. (178,000) (159,000)
------------ ------------
Loans, net ................................................................. 17,406,296 14,998,361
Accrued interest receivable .................................................... 106,324 89,540
Premises and equipment, net .................................................... 1,526,789 1,051,941
Other assets ................................................................... 554,183 560,275
------------ ------------
Total assets ............................................................... $ 25,765,135 $ 23,304,057
============ ============
Liabilities
Deposits:
Noninterest-bearing ........................................................... $ 2,825,925 $ 2,304,641
Interest-bearing .............................................................. 2,707,161 2,726,322
Savings ....................................................................... 4,738,393 3,411,490
Time deposits $100,000 and over ............................................... 3,636,673 3,902,384
Other time deposits ........................................................... 6,979,570 6,119,382
------------ ------------
Total deposits ............................................................. 20,887,722 18,464,219
Accrued interest payable ....................................................... 267,614 245,113
Other liabilities .............................................................. 65,711 24,005
------------ ------------
Total liabilities .......................................................... 21,221,047 18,733,337
------------ ------------
Shareholders' Equity
Preferred stock, $1.00 par value, 1,000,000 shares
authorized, none issued .................................................... - -
Common stock, $1.00 par value; 10,000,000 shares
authorized, 560,270 shares issued and outstanding .......................... 2,801,350 2,801,350
Capital surplus .............................................................. 2,732,191 2,732,191
Retained earnings (deficit) .................................................. (994,959) (963,212)
Accumulated other comprehensive income ....................................... 5,506 391
------------ ------------
Total shareholders' equity ................................................. 4,544,088 4,570,720
------------ ------------
Total liabilities and shareholders' equity ................................. $ 25,765,135 $ 23,304,057
============ ============
See notes to condensed consolidated financial statements.
3
REGIONAL BANKSHARES, INC.
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
March 31,
---------
2001 2000
---- ----
Interest income:
Loans, including fees .......................................................... $ 408,250 $ 154,852
Investment Securities:
Taxable ...................................................................... 5,575 5,493
Nonmarketable equity securities .............................................. 2,926 -
Federal funds sold ........................................................... 68,123 63,880
--------- ---------
Total ........................................................................ 484,874 224,225
--------- ---------
Interest expense:
Time deposits $100,000 and over ................................................ 62,043 15,670
Other deposits ................................................................. 142,966 63,698
Short-term borrowings .......................................................... 1,960 -
--------- ---------
Total ........................................................................ 206,969 79,368
--------- ---------
Net interest income .............................................................. 277,905 144,857
Provision for loan losses ........................................................ 20,832 26,740
--------- ---------
Net interest income after provision for loan losses .............................. 257,073 118,117
--------- ---------
Other income:
Service charges on deposit accounts ............................................ 20,946 8,048
Residential mortgage origination fees .......................................... 10,084 3,341
Credit life insurance commissions .............................................. 1,707 4,367
Other income ................................................................... 8,837 4,944
--------- ---------
Total ........................................................................ 41,574 20,700
--------- ---------
Other expense:
Salaries and employee benefits ................................................. 176,598 169,398
Net occupancy expense .......................................................... 12,428 16,567
Furniture and fixture expense .................................................. 24,789 24,272
Other operating expenses ....................................................... 133,426 103,532
--------- ---------
Total ........................................................................ 347,241 313,769
--------- ---------
Income (loss) before income taxes ................................................ (48,594) (174,952)
Income tax expense (benefit) ..................................................... (16,847) (64,732)
--------- ---------
Net income (loss) ................................................................ $ (31,747) $(110,220)
========= =========
Earnings (loss) per share
Average shares outstanding ....................................................... 560,270 560,270
Net income (loss) ................................................................ $ (0.06) $ (0.20)
See notes to condensed consolidated financial statements.
4
REGIONAL BANKSHARES, INC
Condensed Consolidated Statements of Shareholders'
Equity and Comprehensive Income
for the three months ended March 31, 2001
(Unaudited)
Common Stock Retained Accumulated Other
------------ Capital Earnings Comprehensive
Shares Amount Surplus (Deficit) Income Total
------ ------ ------- --------- ------ -----
Balance,
December 31, 2000 .................. 560,270 $ 2,801,350 $ 2,732,191 $ (963,212) $ 391 $ 4,570,720
Net income (loss)
for the period ..................... (31,747) (31,747)
Other comprehensive
income, net of tax
expense of $2,635 .................. 5,115 5,115
------ -----------
Comprehensive income (loss) .......... (26,632)
------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 2001 .............. 560,270 $ 2,801,350 $ 2,732,191 $ (994,959) $ 5,506 $ 4,544,088
======= =========== =========== =========== =========== ===========
See notes to condensed consolidated financial statements.
5
REGIONAL BANKSHARES, INC
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
---------
2001 2000
---- ----
Cash flows from operating activities:
Net income (loss) .................................................................... $ (31,747) $ (110,220)
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation and amortization ...................................................... 18,653 21,765
Provision for possible loan losses ................................................. 20,832 26,740
Accretion and premium amortization ................................................. (809) (727)
Deferred income tax provision (benefit) ............................................ (7,216) (64,732)
Increase in interest receivable .................................................... (16,784) (8,569)
Increase in interest payable ....................................................... 22,501 29,953
Decrease (increase) in other assets ................................................ 13,030 (18,306)
Increase in other liabilities ...................................................... 41,706 14,780
----------- -----------
Net cash provided (used) by operating activities .............................. 60,166 (109,316)
----------- -----------
Cash flows from investing activities:
Sale of nonmarketable equity securities ............................................ 168,150 -
Net increase in loans made to customers ............................................ (2,428,767) (2,218,242)
Purchases of premises and equipment ................................................ (493,501) (19,155)
----------- -----------
Net cash used by investing activities ......................................... (2,754,118) (2,237,397)
----------- -----------
Cash flows from financing activities:
Net increase in demand deposits, interest-bearing
transaction accounts and savings accounts ......................................... 1,829,026 1,434,893
Net increase in certificates of deposit and other time deposits .................... 594,477 1,199,038
----------- -----------
Net cash provided by financing activities ..................................... 2,423,503 2,633,931
----------- -----------
Net increase (decrease) in cash and cash equivalents ................................... (270,449) 287,218
Cash and cash equivalents, beginning ................................................... 6,018,628 4,364,020
----------- -----------
Cash and cash equivalents, ending ...................................................... $ 5,748,179 $ 4,651,238
=========== ===========
Cash paid during the period for:
Income taxes ....................................................................... $ - $ -
Interest ........................................................................... $ 184,468 $ 49,415
See notes to condensed consolidated financial statements.
6
REGIONAL BANKSHARES, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with the
requirements for interim financial statements and, accordingly, they are
condensed and omit disclosures, which would substantially duplicate those
contained in the most recent annual report to shareholders. The financial
statements, as of March 31, 2001 and for the interim periods ended March 31,
2001 and 2000, are unaudited and, in the opinion of management, include all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation. The financial information as of December 31, 2000 has been
derived from the audited financial statements as of that date. For further
information, refer to the financial statements and the notes included in
Hartsville Community Bank's 2000 Annual Report.
NOTE 2 - REORGANIZATION OF HARTSVILLE COMMUNITY BANK
On November 15, 2000, the shareholders of Hartsville Community Bank, N.A.(the
"Bank"), approved a plan of corporate reorganization under which Hartsville
Community Bank, N.A., became a wholly-owned subsidiary of Regional Bankshares,
Inc. (the Company), which was organized at the direction of the Company's
management. The original authorized common stock of Regional Bankshares, Inc.,
is 10,000,000 shares with a par value of $1.00 per share. In addition, the
authorized preferred stock of the Company is 1,000,000 shares. Pursuant to the
reorganization, the Company issued 560,270 shares of its common stock in
exchange for all of the 560,270 outstanding common shares of the Bank. The
effective date of the reorganization was January 1, 2001 and was accounted for
as if it were a pooling of interests. The accompanying financial statements for
the periods in 2000 are unchanged from the amounts previously reported by
Hartsville Community Bank.
On January 10, 2001, the Bank converted from a nationally-chartered bank to a
state-chartered bank.
NOTE 3 - COMPREHENSIVE INCOME
Comprehensive income includes net income and other comprehensive income, which
is defined as nonowner related transactions in equity. The following table sets
forth the amounts of other comprehensive income included in equity along with
the related tax effect for the three month periods ended March 31, 2001 and
2000:
Pre-tax (Expense) Net-of-tax
Amount Benefit Amount
------ ------- ------
For the Three Months Ended March 31, 2001:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period .................... $7,750 $(2,635) $5,115
Plus: reclassification adjustment for gains (losses)
realized in net income ...................................................... - - -
------ ------- ------
Net unrealized gains (losses) on securities ...................................... 7,750 (2,635) 5,115
------ ------- ------
Other comprehensive income ........................................................ $7,750 $(2,635) $5,115
====== ======= ======
7
REGIONAL BANKSHARES, INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
NOTE 3 - COMPREHENSIVE INCOME (continued)
- -----------------------------
Pre-tax (Expense) Net-of-tax
Amount Benefit Amount
------ ------- ------
For the Three Months Ended March 31, 2000:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the period ................... $(1,623) $ 552 $(1,071)
Plus: reclassification adjustment for gains (losses)
realized in net income .................................................. - - -
------- ------- -------
Net unrealized gains (losses) on securities ...................................... (1,623) 552 (1,071)
------- ------- -------
Other comprehensive income ....................................................... $ 1,623) $ 552 $(1,071)
======= ======= =======
Accumulated other comprehensive income consists solely of the unrealized gain
(loss) on securities available-for-sale, net of the deferred tax effects.
8
REGIONAL BANKSHARES, INC.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following is a discussion of our financial condition as of March 31, 2001
compared to December 31, 2000, and the results of operations for the three
months ended March 31, 2001 compared to the three months ended March 31, 2000.
These comments should be read in conjunction with our condensed financial
statements and accompanying footnotes appearing in this report. This report
contains "forward-looking statements" relating to, without limitation, future
economic performance, plans and objectives of management for future operations,
and projections of revenues and other financial items that are based on the
beliefs of our management, as well as assumptions made by and information
currently available to our management. The words "expect," "estimate,"
"anticipate," and "believe," as well as similar expressions, are intended to
identify forward-looking statements. Our actual results may differ materially
from the results discussed in the forward-looking statements, and our operating
performance each quarter is subject to various risks and uncertainties that are
discussed in detail in our filings with the Securities and Exchange Commission.
Results of Operations
Net Interest Income
For the three months ended March 31, 2001, net interest income increased
$133,048, or 91.8%, to $277,905 as compared to $144,857 for the same period in
2000. Interest income from loans, including fees increased $253,398, or 163.4%,
from the three months ended March 31, 2000 to the comparable period in 2001 as
we continue to experience growth in our loan portfolio. Interest expense for the
three months ended March 31, 2001 was $206,969 as compared to $79,368 for the
same period in 2000. The increase in interest-bearing deposits between the two
periods resulted in increased interest expense. The net interest margin realized
on earning assets decreased from 5.25% for the three months ended March 31, 2000
to 5.14% for the same period in 2001. The interest rate spread increased by 75
basis points from 3.38% at March 31, 2000 to 4.13% at March 31, 2001. This
increase is attributable to an increase in yields on interest earning assets,
reflecting a greater percentage of higher yielding assets in the 2001 period.
Provision and Allowance for Loan Losses
The provision for loan losses is the charge to operating earnings that
management believes is necessary to maintain the allowance for loan losses at an
adequate level to reflect the losses inherent in the loan portfolio. For the
three months ended March 31, 2001, the provision charged to expense was $20,832,
as compared to $26,740 for the same period in 2000. The allowance for loan
losses represents 1.01% and 1.00% of gross loans at March 31, 2001 and 2000,
respectively. There are risks inherent in making all loans, including risks with
respect to the period of time over which loans may be repaid, risks resulting
from changes in economic and industry conditions, risks inherent in dealing with
individual borrowers, and, in the case of a collateralized loan, risks resulting
from uncertainties about the future value of the collateral. We maintain an
allowance for loan losses based on, among other things, historical experience,
an evaluation of economic conditions, and regular reviews of delinquencies and
loan portfolio quality. Our judgment about the adequacy of the allowance is
based upon a number of estimates and assumptions about present conditions and
future events, which we believe to be reasonable, but which may not prove to be
accurate. Thus, there is a risk that chargeoffs in future periods could exceed
the allowance for loan losses or that substantial additional increases in the
allowance for loan losses could be required. Additions to the allowance for loan
losses would result in a decrease of our net income and, possibly, our capital.
Noninterest Income
Noninterest income during the three months ended March 31, 2001 was $41,574, an
increase of $20,874 from $20,700 during the comparable period in 2000. The
increase is primarily a result of an increase in service charges on deposit
accounts from $8,048 during the three months ending March 31, 2000 to $20,946
for the three months ending March 31, 2001. In addition, the Company's
production of residential mortgage loans continues to grow, resulting in income
of $10, 084 during the three months ended March 31, 2001, compared to $3,341
during the comparable period in 2000.
9
Noninterest Expense
Total noninterest expense for the three months ended March 31, 2001 was
$347,241, or 10.67%, higher than the $313,769 amount for the three months ended
March 31, 2000. The largest increase was in other operating expense, which
increased from $103,532 for the three months ended March 31, 2000 to $133,426
for the three months ended March 31, 2001. The increase is primarily
attributable to the costs associated with forming the holding company which
totaled $26,365. Salaries and employee benefits increased $7,200 or 4.3% to
$176,598 for the three months ended March 31, 2001. Salaries and benefits for
the three months ended March 31, 2000 included the salaries of two senior
officers who are no longer with the Bank.
Income Taxes
The income tax benefit for the three months ended March 31, 2001 was $16,847 as
compared to $64, 732 for the same period in 2000. The loss before income taxes
decreased from $174,952 for the three months ended March 31, 2000 to $48,594 for
the same period in 2001. The effective tax rate was 34.7% for the three months
ended March 31, 2001, as compared to an effective tax rate of 37% for the three
months ended March 31, 2000.
Net Income (Loss)
The combination of the above factors resulted in a net loss for the three months
ended March 31, 2001 of $31,747 as compared to $110,220 for the same period in
2000. The net loss before taxes of $48,594 was partially offset by the income
tax benefit of $16,847. The net loss before taxes for the same period in 2000
was $174,952, which was partially offset by the income tax benefit of $64,732.
Assets and Liabilities
During the first three months of 2001, total assets increased $2,461,078, or
10.56%, when compared to December 31, 2000. The primary source of growth in
assets was loans, which increased $2,426,935, or 16.01%, during the first three
months of 2001. Federal funds sold increased $535,000 from December 31, 2000 to
$5,145,000 at March 31, 2001. Total deposits also increased $2,423,503, or
13.13%, from the December 31, 2000 amount of $18,464,219. Within the deposit
area, savings increased $1,326,903, or 38.90%, during the first three months of
2001.
Investment Securities
Investment securities decreased from $585,312 at December 31, 2000 to $423,364
at March 31, 2001. This was primarily due to the sale of Federal Reserve Stock
of $168,150 when the Bank withdrew from membership in the Federal Reserve Bank
of Richmond upon the conversion to a state charter. All of the Bank's marketable
investment securities were designated as available-for-sale at March 31, 2001.
10
Loans
The Company continued its trend of growth during the first three months of 2001,
especially in the loan area. Net loans increased $2,407,935, or 16.05%, during
the period. As shown below, the main component of growth in the loan portfolio
was real estate - mortgage loans which increased 25.95%, or $1,649,965, from
December 31, 2000 to March 31, 2001. Balances within the major loans receivable
categories as of March 31, 2001 and December 31, 2000 are as follows:
March 31, December 31,
2001 2000
---- ----
Real estate - construction ............... $ 1,714,400 $ 1,439,247
Real estate - mortgage ................... 8,007,776 6,357,811
Commercial and industrial ................ 3,454,167 3,329,040
Consumer and other ....................... 4,407,953 4,031,263
----------- -----------
$17,584,296 $15,157,361
=========== ===========
Risk Elements in the Loan Portfolio
The following is a summary of risk elements in the loan portfolio:
March 31, December 31,
2001 2000
---- ----
Loans: Nonaccrual loans ............................ $10,789 $10,789
Accruing loans more than 90 days past due .......... $ - $ -
Loans identified by
the internal review mechanism:
Criticized ...................................... $38,525 $39,597
Classified ...................................... $13,803 $12,766
Criticized loans have potential weaknesses that deserve close attention and
could, if uncorrected, result in deterioration of the prospects for repayment or
the Bank's credit position at a future date. Classified loans are inadequately
protected by the sound worth and paying capacity of the borrower or any
collateral and there is a distinct possibility or probability that the Bank will
sustain a loss if the deficiencies are not corrected.
11
Allowance for Loan Losses
Activity in the Allowance for Loan Losses is as follows:
Quarter ended
March 31,
---------
2001 2000
---- ----
Balance, January 1, .......................................................... $ 159,000 $ 54,629
Provision for loan losses for the period ..................................... 20,832 26,740
Net loans (charged-off) recovered for the period ............................. (1,832) (3,869)
------------ ------------
Balance, end of period ....................................................... $ 178,000 $ 77,500
============ ============
Gross loans outstanding, end of period ....................................... $ 17,584,296 $ 7,750,862
Allowance for loan losses to loans
outstanding, end of period ............................................. 1.01% 1.00%
Deposits
At March 31, 2001, total deposits increased by $2,423,503, or 13.13%, from
December 31, 2000. The largest increase was in savings, which increased
$1,326,903, or 38.90%, from December 31, 2000 to March 31, 2001. The increase
was attributable to one customer that placed funds of approximately $1,200,000
in money market accounts in February 2001. Expressed in percentages,
noninterest-bearing deposits increased 22.62% and interest-bearing deposits
increased 11.77%.
Balances within the major deposit categories as of March 31, 2001 and December
31, 2000 are as follows:
March 31, December 31,
2001 2000
---- ----
Noninterest-bearing demand deposits .......... $ 2,825,925 $ 2,304,641
Interest-bearing demand deposits ............. 2,707,161 2,726,322
Savings deposits ............................. 4,738,393 3,411,490
Time deposits $100,000 and over .............. 3,636,673 3,902,384
Other time deposits .......................... 6,979,570 6,119,382
----------- -----------
$20,887,722 $18,464,219
=========== ===========
Liquidity
Liquidity needs are met by the Company through scheduled maturities of loans and
investments and through pricing policies to attract interest-bearing deposits.
The level of liquidity is measured by the loan-to-total borrowed funds (which
includes deposits) ratio, which was at 84.2% at March 31, 2001 and 82.1% at
December 31, 2000.
Securities available-for-sale, which totaled $352,911 at March 31, 2001, serve
as a ready source of liquidity. The Company also has lines of credit available
with correspondent banks to purchase federal funds for periods from one to seven
days. At March 31, 2001, unused lines of credit totaled $2,650,000.
12
Capital Resources
Total shareholders' equity decreased from $4,570,720 at December 31, 2000 to
$4,544,088 at March 31, 2001. The decrease is due to the net loss for the period
of $31,747. The decrease was offset partially by a positive change of $5,115 in
the fair value of securities available-for-sale.
The Federal Reserve Board and bank regulatory agencies require bank holding
companies and financial institutions to maintain capital at adequate levels
based on a percentage of assets and off-balance sheet exposures, adjusted for
risk-weights ranging from 0% to 100%. Under the risk-based standard, capital is
classified into two tiers. Tier 1 capital consists of common shareholders'
equity, excluding the unrealized gain (loss) on available-for-sale securities,
minus certain intangible assets. Tier 2 capital consists of the general reserve
for loan losses subject to certain limitations. An institution's qualifying
capital base for purposes of its risk-based capital ratio consists of the sum of
its Tier 1 and Tier 2 capital. The regulatory minimum requirements are 4% for
Tier 1 and 8% for total risk-based capital.
Banks and bank holding companies are also required to maintain capital at a
minimum level based on total assets, which is known as the leverage ratio. The
minimum requirement for the leverage ratio is 3%; however all but the highest
rated institutions are required to maintain ratios 100 to 200 basis point above
the minimum. Both the Company and the Bank exceeded their minimum regulatory
capital ratios as of March 31, 2001, as well as the ratios to be considered
"well capitalized."
The following table summarizes the Company's risk-based capital at March 31,
2001:
Shareholders' equity ....................................... $ 4,538,582
Less: intangibles ......................................... -
-----------
Tier 1 capital ............................................ 4,538,582
Plus: allowance for loan losses (1) ....................... 178,000
-----------
Total capital ............................................. $ 4,716,582
===========
Risk-weighted assets ...................................... $19,039,474
===========
Risk-based capital ratios
Tier 1 capital (to risk-weighted assets) ................ 23.84%
Total capital (to risk-weighted assets) ................. 24.77%
Tier 1capital (to total average assets) ................. 18.41%
(1) limited to 1.25% of risk-weighted assets
Regulatory Matters
From time to time, various bills are introduced in the United States Congress
with respect to the regulation of financial institutions. Certain of these
proposals, if adopted, could significantly change the regulation of banks and
the financial services industry. The Company cannot predict whether any of these
proposals will be adopted or, if adopted, how these proposals would affect the
Company.
13
REGIONAL BANKSHARES, INC.
Part II - Other Information
Item 2. Changes in Securities
(a) Regional Bankshares, Inc. is the successor registrant to Hartsville
Community Bank, National Association (the "Bank"). The Bank was organized
as a national bank and opened for business in June, 1999. The Bank's common
stock was registered pursuant to Section 12(g) of the Securities Exchange
Act of 1934, and filings were made with the Office of the Comptroller of
the Currency pursuant to Section 12(i) of the Securities Exchange Act of
1934.
Regional Bankshares, Inc. is a South Carolina corporation incorporated in
2000 to become the holding company for the Bank. On January 1, 2001, the
Company completed its acquisition of the Bank and the Bank became a
wholly-owned subsidiary of the Company. Pursuant to the transaction, the
Company exchanged 560,270 shares of its common stock for all of the 560,270
outstanding shares of the Bank's common stock.
On January 10, 2001, the Bank converted from a national bank to a South
Carolina state bank.
As described in the Proxy Statement/Prospectus dated October 25, 2000, in
connection with the meeting of shareholders of the Bank held November 15,
2000, at which the foregoing transaction was voted upon and approved, the
rights of the common stock of the Company differ in several respects from
the rights of the common stock of the Bank. The Proxy Statement/Prospectus
was filed with the Office of the Comptroller of the Currency pursuant to
Sections 14 and 12(i) of the Securities Exchange Act of 1934, and was
mailed to shareholders of record of the Bank. The section entitled "EFFECT
OF REORGANIZATION ON THE RIGHTS OF SHAREHOLDERS" in the Proxy
Statement/Prospectus is incorporated herein by reference. A description of
the Company's common stock is set forth under Item 1 in the Company's 1934
Act Registration Statement on Form 8-A, filed March 26, 2001, and is
incorporated herein by reference.
(c) The Company did not register the issuance of the 560,270 shares of its
common stock in the transaction described under (a) above in reliance on
the exemption from registration provided by Section 3(a)(12) of the
Securities Act of 1933.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 2001.
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SIGNATURE
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
By: s/Curtis A. Tyner
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Curtis A. Tyner
President, Chief Executive Officer
and Chief Financial Officer
Date: May 9, 2001
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