1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
- ------ Act of 1934
For the quarterly period ended September 30, 1999
Transition report under Section 13 or 15(d) to the Exchange Act For the
transition period from __________________ to ___________________
- ------
Commission File No. 333-70589
NEW COMMERCE BANCORP
--------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
South Carolina 58-2403844
-------------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
One Five Forks Plaza Court, Simpsonville, South Carolina 29681
--------------------------------------------------------------
(Address of Principal Executive Offices)
(864) 288-3337
(Issuer's Telephone Number, Including Area Code)
Not Applicable
--------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
One million shares of common stock, par value $.01 per share, were
issued and outstanding as of September 30,1999.
Transitional Small Business Disclosure Format (check one): Yes [ ]
No [ X ]
2
NEW COMMERCE BANCORP
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1998
September 30, (Development
1999 Stage Enterprise)
(Unaudited) (Audited)
------------- -----------------
ASSETS
Cash and due from banks $ 519,604 $ 1,762,031
Federal funds sold 5,398,120 --
Securities, available for sale 3,198,390 --
Federal Reserve Bank stock 210,000 --
Federal Home Loan Bank stock 38,200
Loans - net 11,928,029 --
Property - at cost, less accumulated
depreciation 1,887,328 8,218
Real estate options -- 39,800
Deferred stock offering costs -- 143,427
Other assets 342,695 --
------------ -----------
Total assets $ 23,522,366 $ 1,953,476
============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $ 14,232,095 $--
Accrued expenses and other liabilities 115,368 --
------------ -----------
Total liabilities 14,347,463 --
------------ -----------
Shareholders' Equity
Common stock - $.01par value, authorized
10,000,000 shares, 1,000,000 and
200,000 shares issued and outstanding at September
30,1999 and December 31, 1998, respectively 10,000 2,000
Additional paid-in capital 9,764,550 1,998,000
Retained earnings (deficit) (588,779) (46,524)
Net unrealized holding loss on securities
available for sale (10,868) --
------------ -----------
Total shareholders' equity 9,174,903 1,953,476
------------ -----------
Total liabilities and shareholders' equity $ 23,522,366 $ 1,953,476
============ ===========
See Notes to Consolidated Financial Statements which are an integral part of
these statements.
2
3
NEW COMMERCE BANCORP
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
For the three For the nine
Months ended Months ended
September 30, 1999 September 30, 1999
------------------ ------------------
INTEREST INCOME
Loans (including fees) $ 205,757 $ 216,193
Investment securities 35,500 76,679
Federal funds sold 47,279 73,228
------------ -----------
Total interest income 288,536 366,100
------------ -----------
INTEREST EXPENSE
Deposits 82,257 91,718
------------ -----------
NET INTEREST INCOME 206,279 274,382
Provision for Possible Loan Losses 83,561 106,190
------------ -----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 122,718 168,192
NONINTEREST INCOME
Service charges 2,454 3,038
Other 51,217 54,434
------------ -----------
Total noninterest income 53,671 57,472
------------ -----------
TOTAL INCOME 176,389 225,664
NONINTEREST EXPENSES
Salaries and employee benefits 228,946 559,851
Occupancy, office and equipment 27,433 59,943
Data processing 41,106 55,836
Insurance 1,572 3,003
Postage and supplies 11,340 48,810
Marketing 43,481 106,967
Other 28,642 178,795
------------ -----------
Total noninterest expense 382,520 1,013,205
------------ -----------
LOSS BEFORE INCOME TAX BENEFIT (206,131) (787,541)
INCOME TAX BENEFIT (60,447) (245,286)
------------ -----------
NET LOSS $ (145,684) $ (542,255)
============ ===========
Net loss Per Common Share $ (0.15) $ (0.54)
============ ===========
See Notes to Consolidated Financial Statements which are an integral part of
these statements.
3
4
NEW COMMERCE BANCORP
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
Common Stock Accumulated
Additional Retained Other Total
paid-in Earnings comprehensive Shareholder's
Shares Amount capital (Deficit) income Equity
------ ------ ------- --------- ------ ------
Balance, December 31, 1998 200,000 $ 2,000 $ 1,998,000 $ (46,524) $ -- $ 1,953,476
Net loss -- -- -- (542,255) -- (542,255)
Other comprehensive income (loss),
net of tax:
Net change in unrealized holding losses
on securities available for sale -- -- -- -- (10,868) (10,868)
-------- -----------
Comprehensive income -- -- -- -- (10,868) 1,400,353
Issuance of common stock 800,000 8,000 7,992,000 -- -- 8,000,000
Stock offering expenses -- -- (225,450) -- -- (225,450)
--------- ------- ----------- --------- -------- -----------
Balance, September 30, 1999 1,000,000 $10,000 $ 9,764,550 $(588,779) $(10,868) $ 9,174,903
--------- ------- ----------- --------- -------- -----------
See Notes to Consolidated Financial Statements which are an integral part of
these statements.
4
5
NEW COMMERCE BANCORP
AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
OPERATING ACTIVITIES
Net loss $ (542,255)
Adjustments to reconcile net loss to net cash
used for operating activities
Depreciation 12,000
Provision for possible loan losses 106,190
Deferred income tax benefit (245,286)
Increase in other assets (97,409)
Increase in accrued expenses and other liabilities 115,368
------------
Net cash used for operating activities (651,392)
------------
INVESTING ACTIVITIES
Net increase in federal funds sold (5,398,120)
Purchase of investment securities (3,209,258)
Net increase in loans (12,034,219)
Capital expenditures for property (1,891,110)
Increase in Federal Reserve Bank capital stock (210,000)
Increase in FHLB capital stock (38,200)
Decrease in real estate options 39,800
------------
Net cash used for investing activities (22,741,107)
------------
FINANCING ACTIVITIES
Net increase in deposits 14,232,095
Issuance of capital stock, net of stock offering costs 7,917,977
------------
Net cash provided by financing activities 22,150,072
------------
NET DECREASE IN CASH AND DUE FROM BANKS (1,242,427)
------------
Cash and Due From Banks, Beginning of Year 1,762,031
------------
Cash and Due From Banks, End of Year $ 519,604
============
CASH PAID FOR
Interest $ 66,891
============
Income Taxes $ --
============
See Notes to Consolidated Financial Statements which are an integral part of
these statements.
5
6
NEW COMMERCE BANCORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION
Business activity and organization
New Commerce Bancorp (the "Company") was incorporated to operate as a
bank holding company pursuant to the Federal Bank Holding Company Act of 1956
and the South Carolina Bank Holding Company Act, and to purchase 100% of the
issued and outstanding stock of New Commerce Bank (the "Bank"), an association
organized under the laws of the United States, to conduct a general banking
business in Simpsonville, South Carolina.
Since inception through May 17, 1999, the Company had engaged in
organizational and pre-opening activities necessary to obtain regulatory
approvals and to prepare its subsidiary, the Bank, to commence business as a
financial institution. The Bank opened for business on May 17, 1999. The Bank is
primarily engaged in the business of accepting demand deposits and savings
insured by the Federal Deposit Insurance Corporation, and providing commercial,
consumer and mortgage loans to the general public.
The Company completed its stock offering on June 30, 1999 and sold the
maximum of 800,000 shares of its common stock at $10 per share. We raised
$7,774,550 in the offering representing $8,000,000 in proceeds, less sales agent
commissions of $144,195 and stock offering expenses of $81,255. This amount is
in addition to the $2,000,000 we previously raised through the sale of 200,000
shares of common stock sold to the organizers of the Company at $10.00 per
share. The Company capitalized the Bank with $8,250,000 of the net proceeds of
the offering and the sale of shares to the organizers. The remaining net
offering proceeds are being used to pay organization expenses of the Company and
to provide general working capital, including additional future capital for
investment in the Bank, if needed. We believe this amount will be sufficient to
fund the activities of the Company and the Bank in their initial stages of
operations, and that the Bank will generate sufficient income from operations to
fund its activities on an ongoing basis. However, we cannot be sure that either
the Bank or the Company will achieve any particular level of profitability or
that we will not need additional capital in the future.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
nine months ended September 30, 1999 are not necessarily indicative of the
results that may be expected for the year ending December 31, 1999. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Registration Statement on Form SB-2
(Registration Number 333-70589) as filed with and declared effective by the
Securities and Exchange Commission.
Until the Bank opened for business on May 17, 1999, the Company was
accounted for as a development stage enterprise as defined by Statement of
Financial Accounting Standards No. 7,
6
7
"Accounting and Reporting by Development Stage Enterprises," as the Company
devoted substantially all of its efforts to establishing a new business. When
the Bank opened, certain reclassifications and adjustments were made to the
financial statements to reflect that the Company is now accounted for as an
operating company.
NOTE 2 - STOCK OPTION PLAN
On August 26, 1999, the Company adopted a stock incentive plan for the
benefit of the directors, officers, and employees of the Company and the Bank.
Under the plan, the Company may grant up to 150,000 options at an option price
per share not less than the fair market value on the date of grant. On August
26, 1999, the Company granted 135,000 stock options that expire 10 years from
the grant date and are subject to various vesting schedules to directors,
officers and employees. The Company has adopted Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation".
NOTE 3 - NET LOSS PER COMMON SHARE
SFAS No. 128, "Earnings per Share" requires that the Company present
basic and diluted net income per share. Net loss per common share is calculated
by dividing net loss by the weighted average number of common shares outstanding
for each period presented. The weighted average number of common shares
outstanding for basic net loss per common share was 1,000,000 for the nine
months ended September 30, 1999 and 1,000,000 for the three months ended
September 30, 1999. The Company did not have any common stock equivalents during
the nine months ended September 30, 1999. Stock options outstanding had no
effect on the computation of weighted average shares outstanding.
NOTE 4 - FASB ACCOUNTING STANDARDS
In June 1998, the FASB issued SFAS 133, "Accounting for Derivative
Instrument and Hedging Activities". All derivatives are to be measured at fair
value in the balance sheets as assets or liabilities. This statement's effective
date was delayed by the issuance of SFAS 137 ("Accounting for Derivative
Instruments and Hedging Activities-Deferral of this Effective Date of FASB
Statement No. 1343 - an amendment of the of the FASB Statement No. 133) and is
effective for fiscal years and quarters beginning after June 15, 2000. Because
the Company does not use derivative transactions at this time, management does
not expect this standard to have a significant effect on the Company.
In October 1998, the FASB issued SFAS 134, "Accounting for
Mortgage-Backed Securities Retained after the Securitization of Mortgage Loans
Held for sale by a Mortgage Banking Enterprise. The new statement establishes
accounting and reporting standards for certain activities of mortgage banking
enterprises. The statement is effective for the first quarter beginning after
December 15, 1998. The statement will have no effect on the financial statements
of the Company.
In February 1999, the FASB issued SFAS 135, "Rescission of FASB
Statement No. 75 and technical Corrections". The SFAS provides technical
corrections for previously issued statements and rescinds SFAS 75, which
provides guidance related to pension plans of sate and local governmental units.
SFAS 135 is effective for fiscal years ending after February 15, 1999. This
statement will have no effect on the financial statements of the Company.
7
8
In June 1999, the FASB issued SFAS 136, "Transfers of assets to a
Not-for-Profit Organization or Charitable Trust that Raises or Holds
Contributions for Others" is effective for fiscal periods beginning after
December 15, 1999. This statement establishes standards for transactions in
which an entity makes a contribution by transferring assets to a not-for-profit
organization or a charitable trust and then requires these contributions to be
used in specified manner. This statement will have no effect on the financial
statements of the Company.
8
9
Part 1 - FINANCIAL INFORMATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, such as statements
relating to financial results and plans for future business development
activities, and is thus prospective. Such forward-looking statements are subject
to risks, uncertainties, and other factors which could cause actual results to
differ materially from future results expressed or implied by such
forward-looking statements. These statements appear in a number of places in
this report and include all statements that are not statements of historical
fact regarding our intent, belief, or expectations. These forward-looking
statements are not guarantees of future performance and actual results may
differ materially from those projected in the forward-looking statements.
Potential risks and uncertainties include, but are not limited to, our brief
operating history, our ability to manage rapid growth, general economic
conditions, competition, interest rate sensitivity, and exposure to regulatory
and legislative changes. Additional risks are discussed in detail in our filings
with the Securities and Exchange Commission, including the "Risk Factors"
section in our Registration Statement on Form SB-2 (Registration Number
333-70589) as filed with and declared effective by the Securities and Exchange
Commission.
Balance Sheet Review
At September 30, 1999, the Company had total assets of $23,522,000 consisting
principally of net loans of $11,928,000, federal funds sold of $5,398,000,
securities of $3,198,000 and property, at cost less accumulated depreciation of
$1,887,000. Liabilities at September 30, 1999 totaled $14,347,000, consisting of
deposits of $14,232,000 and accrued expenses and other liabilities of $115,000.
At September 30, 1999, shareholders' equity was $9,175,000. The Company's
liquidity ratio (cash and due from banks, federal funds sold and investment
securities as a percentage of total assets) was 38.76%.
Results of Operations
The Company had a net loss of $542,255, or $.54 per share for the nine months
ended September 30, 1999. These losses included expenses incurred in connection
with activities related to the organization of the Company and pre-opening
activities of the Bank. These activities included (without limitation) the
preparation and filing of an application with the OCC to charter the Bank, the
preparation and filing of an application with the FDIC to obtain insurance of
the deposits of the Bank, responding to questions and providing additional
information to the OCC and the FDIC in connection with the application process,
the selling of the Company's common stock in the offering, meetings and
discussions among various organizers regarding application information, target
markets, and capitalization issues, salaries and benefits, and planning and
organizing for the opening of the Bank. With respect to the Bank, these
activities included completing all required steps for final approval from the
OCC for the Bank to open for business, hiring qualified personnel to work in the
Bank, conducting public relations activities on behalf of the Bank, developing
prospective business contacts for the Bank and taking other actions necessary
for a successful bank opening. Through September 30, 1999, the Company incurred
organization and preopening costs of approximately $515,000. These costs were
expensed when incurred in accordance with SOP 98-5, "Reporting on the Costs of
Start-Up Activities". Principal banking operations commenced on May 17, 1999.
9
10
Net interest income, the amount by which interest earned on assets exceeds the
amount of interest expense paid or accrued on interest-bearing liabilities, is
the largest component of the Company's income. Net interest income totaled
$274,382 for the nine months ended September 30, 1999. The average yield on
loans (including fees) for the nine months ended September 30, 1999 was 10.24 %,
while the average yield on securities was 6.19 %.
Noninterest income for the nine months ended September 30, 1999 was $57,472.
Service charges on deposit accounts totaled $3,038. Other fee income from our
Private Business Manager program and from brokered mortgage loan origination fee
income totaled $33,783 and $14,713, respectively.
Operating expenses for the period were $1,013,205 and consisted primarily of
salaries and benefits of $559,851 and marketing expenses of $106,967.
The provision for loan losses and the reserve balance amounted to $106,190 at
September 30, 1999. This reserve balance represents .88 % of gross loans.
Management's judgment as to the adequacy of the allowance is based on a number
of assumptions about future events that it believes is reasonable, but which may
or may not be accurate. There can be no assurance that charge-offs in future
periods will not exceed the allowance for loan losses. The Company had no
nonperforming loans or net charge-offs since commencing operations.
Year 2000 Readiness
Like many financial institutions, we rely on computers to conduct our
business and information systems processing. Industry experts are concerned that
on January 1, 2000, some computers may not be able to interpret the new year
properly, causing computer malfunctions. As described in more detail below, we
have developed and are executing a plan to try to minimize the risk that our
computer and telecommunication systems will not have these year 2000 problems,
and we currently do not anticipate that the year 2000 issue will materially
impact our business or operations. We rely on third party vendors to supply our
computer and telecommunication systems and other office equipment, and we also
rely on a third party to process our data and account information. As a new
bank, we chose only those vendors who demonstrated readiness for the year 2000,
and therefore, we will not have to address problems in older systems. We will
continue to monitor this situation up to and through the century change.
Although we believe we have addressed the year 2000 issue, we cannot be entirely
sure that the year 2000 will not have any adverse effect on the Bank.
We have prepared a comprehensive year 2000 plan to monitor and insure
the year 2000 compliance of our third party vendors of computer and
telecommunication systems, data processing services and other office equipment.
We budgeted $12,000 for the execution of this plan. All of our systems are in
place and we fully believe year 2000 compliant. The plan calls for us to
continue to monitor the situation through the end of the year and beyond. We are
executing this plan under the supervision of our chief financial officer, with
oversight from our board of directors. Under the plan, we have investigated the
year 2000 readiness of each of our vendors and required comprehensive year 2000
warranties from each vendor. We have reviewed year 2000 testing completed by
each vendor, and tested our own systems if necessary and reasonable. Our
investigation of each vendor primarily consisted of requesting and reviewing its
year 2000 test results.
Jack Henry & Associates, Inc. provides our mission critical computer
software and data processing services. Jack Henry is a well-established company
and provides computer systems and data processing services to hundreds of
financial institutions throughout the United States. Jack Henry has tested its
systems for year 2000 issues. Rather than test all of its customers
individually, Jack Henry,
10
11
like other vendors tested its systems on selected financial institutions which
run its systems under a variety of conditions and configurations. The purpose of
this selective testing is to avoid the prohibitive cost of testing every
installed system, while still providing a high level of comfort that its systems
will perform under all conditions. Jack Henry has completed testing of the
systems we are using. We have reviewed the methods and results of this testing
and are satisfied that the tested systems are similar to ours and that the Jack
Henry systems will function as intended on all critical year 2000 related dates.
Our year 2000 plan extends to our other less critical vendors as well,
including our vendors for ATM hardware, telephone systems, credit card
processors, and suppliers of office equipment. Under our plan, we have reviewed
assurances and warranties of all of these vendors, and are satisfied that all
systems provided are year 2000 compliant. Based on our review of our vendor's
systems and year 2000 testing results to date, we do not believe that they will
have any significant year 2000 problems. The Office of the Comptroller of the
Currency and the FDIC are also monitoring the year 2000 readiness of the banking
industry.
Our agreements with each of our vendors, including Jack Henry, include
contractual assurances and warranties regarding year 2000 compliance. Some of
these warranties are limited by disclaimers of liability which specifically
exclude special, incidental, indirect and consequential damages. These
limitations could limit our ability to obtain recourse against a vendor who is
not year 2000 compliant by excluding damages for things such as lost profits and
customer lawsuits. We have developed contingency plans, including our business
resumption contingency plan, in case year 2000 issues do arise. Based on the
information currently available, we believe that we will be able to continue to
operate the business if one or more our vendors experience unanticipated year
2000 problems, although we cannot be sure.
Our customers may also have year 2000 issues. Such issues could disrupt
certain businesses with high year 2000 risk and affect their deposit balances
and their ability to repay their loans. We are reviewing customer exposure and
assessing year 2000 readiness through year 2000 surveys. For those customers
with high credit risk and high potential exposure, we may require more
substantial proof of year 2000 compliance. Although these surveys are helpful,
it is very difficult for us to accurately assess the year 2000 readiness of any
particular borrower or depositor. Additionally, there may be a higher than usual
demand for liquidity immediately prior to the century change due to deposit
withdrawals by customers concerned about year 2000 issues. To address this
possible demand, we have developed a liquidity plan to included assessment of
cash needs and plans to have a higher percentage of investments in readily
accessible federal funds. We have federal funds lines of credit available from
two major correspondent banks and have obtained approval to use the Federal
Reserve Bank's discount window.
Proposed Legislation
On November 4, 1999, the U.S. Senate and House of Representatives each passed
the Gramm-Leach-Bliley Act, previously known as the Financial Services
Modernization Act of 1999. The Act is expected to be signed into law by
President Clinton in early November 1999. Among other things, the Act repeals
the restrictions on banks affiliating with securities firms contained in
sections 20 and 32 of the Glass-Steagall Act. The Act also creates a new
"financial holding company" under the Bank Holding Company Act, which will
permit holding companies to engage in a statutorily provided list of financial
activities, including insurance and securities underwriting and agency
activities, merchant banking, and insurance company portfolio investment
activities. The Act also authorizes activities that are "complementary" to
financial activities. The Act is intended to grant to community banks certain
powers as a matter of right that larger institutions have accumulated on an ad
hoc basis. Nevertheless, the Act may have the result of increasing the amount of
competition that the Company faces from larger
11
12
institutions and other types of companies. In fact, it is not possible to
predict the full effect that the Act will have on the Company.
12
13
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Company
or any of its subsidiaries is party or of which any of their property is the
subject.
ITEM 2. CHANGES IN SECURITIES.
On June 30, 1999, the Company completed its initial public offering of
its $0.01 par value common stock pursuant to a registration statement on form
SB-2 which the Company filed with the SEC on January 14, 1999, and which the SEC
declared effective on March 19, 1999. In the offering, the Company sold the
maximum of 800,000 shares of common stock at a purchase price of $10.00 per
share. The Company raised a gross amount of $8,000,000 in the offering, less
sales agent commissions of $144,195 and stock offering expenses of $81,255, for
a net proceeds to the Company from the offering of $7,774,550. This was in
addition to the $2,000,000 which the Company previously raised through a sale of
200,000 shares of common stock to its organizers at $10.00 per share.
The Company capitalized the Bank with a total of $8,250,000 from the
net proceeds of the offering and the sale of securities to its organizers. These
funds are being used by the Bank to fund the Bank's investment and lending
operations, for leasing the Bank's temporary facilities, for purchase of the
Bank's permanent site, for construction of the Bank's permanent offices, for
leasing and purchasing furnishings and equipment for the operations of the Bank,
and for other general working purposes.
The remaining net proceeds have been used to pay the organization
expenses of the Company and to provide general working capital, including
additional future capital for investment in the Bank, if needed. The use of
proceeds to date is not materially different from the anticipated use of
proceeds described in the prospectus which was a part of the Company's
registration statement. Other than salaries paid in the normal course of
business, none of the proceeds of the offering were used to pay any amount to
the officers or directors of the Company or the Bank or their affiliates.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no matters submitted to security holders for a vote during
the three months ended September 30, 1999.
ITEM 5. OTHER INFORMATION.
On August 26, 1999, the Company adopted a stock incentive plan for
the benefit of the directors, officers, and employees of the Company and the
Bank. Under the plan, the Company may grant up to 150,000 options at an option
price per share not less than the fair market value on the date of grant. On
August 26, 1999, the Company granted135,000 stock options that expire 10 years
from the grant date and are subject to various vesting schedules to directors,
officers and employees. The
13
14
Company has adopted Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation".
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
3.1. *Articles of Incorporation, as amended
3.2. *Bylaws
4.1. *See Exhibits 3.1 and 3.2 for provisions in New Commerce
BanCorp's Articles of Incorporation and Bylaws defining the
rights of holders of the common stock
4.2. *Form of certificate of common stock
10.1. *Employment Agreement dated August 1, 1998 between New Commerce BanCorp and James D. Stewart
10.2. *Agreement to Buy and Sell dated January 4, 1999, between New Commerce BanCorp, as buyer, and The Bess G.
Kirkland Trust, as seller
10.3. *Agreement to Buy and Sell dated September 30, 1998 between New Commerce BanCorp, as buyer, and Stephen M. Young
and Lewis P. Young, Trustees of Wilbert Burial Vault, Inc., Profit Sharing Plan, as seller
10.4. *Agreement to Buy and Sell dated October 26, 1998, between New
Commerce BanCorp, as buyer, and Hawkins Development
Corporation, as seller
10.5. *Sales Agency Agreement dated December 11, 1998 between New Commerce BanCorp and J.C. Bradford & Co.
10.6. *Escrow Agreement dated October 27, 1998 between New Commerce BanCorp and The Bankers Bank
10.7. *Data Processing Services Agreement and Contract Modification
dated December 1, 1998 between New Commerce BanCorp and Jack
Henry & Associates, Inc.
10.8. *Form of Stock Warrant Agreement
10.9. *Employment Agreement dated January 29, 1999 between New Commerce BanCorp and Paula S. King
10.10 New Commerce Bancorp 1999 Stock Incentive Plan
27.1. Financial Data Schedule (for electronic filing purposes)
- ------------------------
*Incorporated by reference to the Company's Registration Statement on Form SB-2,
File No. 333-70589.
14
15
(b) Reports on Form 8-K.
There were no reports on Form 8-K filed by the Company during the
quarter ended June 30, 1999.
15
16
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act"), the registrant caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NEW COMMERCE BANCORP
Date: November 15, 1999 By: /s/ James D. Stewart
--------------------------------
James D. Stewart
President and Chief Executive officer
Date: November 15 1999 By: /s/ Paula S. King
-----------------------------------------
Paula S. King
Senior Vice President and
Chief Financial Officer
16
17
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
3.1. *Articles of Incorporation, as amended
3.2. *Bylaws
4.1. *See Exhibits 3.1 and 3.2 for provisions in New Commerce
BanCorp's Articles of Incorporation and Bylaws defining the
rights of holders of the common stock
4.2. *Form of certificate of common stock
10.1. *Employment Agreement dated August 1, 1998 between New Commerce BanCorp and James D. Stewart
10.2. *Agreement to Buy and Sell dated January 4, 1999, between New Commerce BanCorp, as buyer, and The Bess G.
Kirkland Trust, as seller
10.3. *Agreement to Buy and Sell dated September 30, 1998 between New Commerce BanCorp, as buyer, and Stephen M. Young
and Lewis P. Young, Trustees of Wilbert Burial Vault, Inc., Profit Sharing Plan, seller
10.4. *Agreement to Buy and Sell dated October 26, 1998, between New Commerce BanCorp, as buyer, and Hawkins
Development Corporation, as seller
10.5. *Sales Agency Agreement dated December 11, 1998 between New Commerce BanCorp and J.C. Bradford & Co.
10.6. *Escrow Agreement dated October 27, 1998 between New Commerce BanCorp and The Bankers Bank
10.7. *Data Processing Services Agreement and Contract Modification dated December 1, 1998 between New Commerce BanCorp
and Jack Henry & Associates, Inc.
10.8. *Form of Stock Warrant Agreement
10.9. *Employment Agreement dated January 29, 1999 between New Commerce BanCorp and Paula S. King
10.10 New Commerce Bancorp 1999 stock Incentive Plan
27.1. Financial Data Schedule (for electronic filing purposes)
- -------------------------
*Incorporated by reference to the Company's Registration Statement on Form SB-2,
File No. 333-70589
17