10KSB 1 0001.txt ANNUAL REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-KSB Annual report under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended DECEMBER 31, 2000 Commission File No.: 0-22961 ANNAPOLIS NATIONAL BANCORP, INC. (Name of small business issuer in its charter) MARYLAND 52-1648903 (State or other jurisdiction of (I.R.S. Employer I.D. No.) incorporation or organization) 108 ADMIRAL COCHRANE DRIVE, SUITE 300, ANNAPOLIS, MARYLAND 21401 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (410) 224-4455 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK PAR VALUE $0.01 PER SHARE (Title of class) THE NASDAQ SMALLCAP MARKET (Name of exchange on which registered) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 past 90 days. Yes: X No: Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B contained in this form and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB Yes: X No: Issuer's revenues for its fiscal year ended December 31, 2000 were $11,388,065. The aggregate market value of the voting stock held by non-affiliates of the registrant, i.e., persons other than directors and executive officers of the registrant is $6,028,751 and is based upon the last sales price as quoted on The NASDAQ Stock Market for March 23, 2001. The Registrant had 2,237,906 shares of Common Stock outstanding as of March 23, 2001. Transitional Small Business Disclosure Format. YES: NO: X DOCUMENTS INCORPORATED BY REFERENCE PORTIONS OF THE ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2000, ARE INCORPORATED BY REFERENCE INTO PART I AND PART II OF THIS FORM 10-KSB. PORTIONS OF THE PROXY STATEMENT FOR THE 2000 ANNUAL MEETING OF SHAREHOLDERS ARE INCORPORATED BY REFERENCE INTO PART III OF THIS FORM 10-KSB. 1 INDEX
PART I PAGE Item 1. Description of Business....................................................... 2 Item 2. Properties.................................................................... 2-3 Item 3. Legal Proceedings............................................................. 3 Item 4. Submission of Matters to a Vote of Security Holders........................... 3 Additional Items Executive Officers of the Registrant.......................................... 3-4 Recent Developments........................................................... 4 PART II Item 5. Market for Common Equity and Related Stockholder Matters...................... 4 Item 6. Management's Discussion and Analysis.......................................... 4 Item 7. Financial Statements.......................................................... 4 Item 8. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure.................................................................... 4 PART III Item 9. Directors, Officers, Promoters and Control Persons; Compliance with Section 16 of the Exchange Act........................................................ 4 Item 10. Executive Compensation........................................................ 5 Item 11. Security Ownership of Certain Beneficial Owners and Management............... 5 Item 12. Certain Relationships and Related Transactions................................ 5 Item 13. Exhibits and Reports on Form 8-K.............................................. 5-6 SIGNATURES .............................................................................. 6-7
This Report contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the securities exchange Act of 1934. These statements appear in a number of places in this Report and include all statements regarding the intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: (i) the Company's financing plans; (ii) trends affecting the Company's financial condition or results of operations; (iii) the Company's growth strategy; and (iv) the declaration and payment of dividends. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors discussed herein and those factors discussed in the Company's filings with the Securities and Exchange Commission. 2 PART I ITEM 1. DESCRIPTION OF BUSINESS The information relating to the description of business of the Registrant is incorporated herein by reference on page 27 of the Registrant's Annual Report to Shareholders. ITEM 2. PROPERTIES The executive offices of the Company and the Bank are located at 1000 Bestgate Drive, Suite 400, Annapolis, Maryland 21401. The following table sets forth the location of and certain additional information regarding the offices of the Company and the Bank at December 31, 2000.
NET BOOK VALUE OF PROPERTY OR ORIGINAL YEAR LEASEHOLD LEASED/ LEASED OR YEAR OF LEASE IMPROVEMENTS AT OWNED LOCATION ACQUIRED EXPIRATION DECEMBER 31, 2000 Administration Leased 1995 2005 (2) $ -- Bestgate Leased 1997 2001 (3) 12,126 Edgewater Land Leased 1996 2006 (1) 371,419 Cape St. Claire Leased 1995 2003 (1) 55,925 Kent Island Leased 1990 2001 (1) 4,020 Severna Park Leased 1996 2006 (1) 16,764
(1) These leases may be extended at the option of the Company for periods ranging from three to twenty years. (2) Lease early buy-out option exercised in 1999 at a cost of $36,000. A lease extension has been granted by the landlord through March 31, 2001. (3) A lease extension has been granted by the landlord through February 28, 2001 ITEM 3. LEGAL PROCEEDINGS The Company is not involved in any pending legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Such routine legal proceedings, in the aggregate, are believed by management to be immaterial to the Company's financial condition or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ADDITIONAL ITEMS. Executive Officers of the Registrant The information relating to directors and named executive officers of the Registrant is incorporated herein by reference to the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on May 17, 2001 at pages 4 through 7. In addition, information concerning Executive Officers who are not directors is set forth below:
AGE AT POSITION WITH THE COMPANY AND BANK NAME 12/31/00 AND PAST FIVE YEARS EXPERIENCE ---- -------- ------------------------------ Richard P. Brown 50 Senior Vice President and Customer Development Group Manager. Mr. Brown joined the Company in 2000. Prior to joining the Company in 2000, Mr. Brown was a partner with Wallingford Capital Corporation. Mr. Brown was previously Vice President of National Bank of Canada - Asset Based Lending Division. Rita D. Demma 53 Secretary of the Company Ms. Demma has been an officer of the Bank since 2000. Ms. Demma held similar positions in the health care industry prior to joining the Company.
3 Margaret Theiss Faison 42 Chief Financial Officer and Treasurer of the Company and Senior Vice President, Chief Financial Officer and Treasurer of the Bank. Prior to joining the Company in 1999, Ms. Faison was Senior Vice President and Chie financial Officer of Sterling Bank & Trust Co. of Baltimore. Ms. Faison was previously Vice President and Chief inancial Officer with Mellon Bank (MD). Robert E. Kendrick, III 55 Senior Vice President and Chief Credit Officer. Prior to joining the Company in 1999, Mr. Kendrick held similar positions with Citizens National Bank of Laurel, Bank of Maryland, Sterling Bank & Trust Co. of Baltimore and NationsBank.
Recent Developments Effective November 1, 2000 the Bank applied for and was accepted into the State of Maryland and the Federal Reserve Banking Systems thus terminating the Bank's national charter and regulatory association with the OCC. In conjunction with the state charter the Bank was required to remove the word national from its name. As a result on November 1, 2000 the Bank changed its name from Annapolis National Bank to BankAnnapolis. The Bank is currently under no regulatory agreement or action. PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Information relating to the market for Registrant's common equity and related stockholder matters appears in the Registrant's 2000 Annual Report to Stockholders on page 20, and is incorporated herein by reference. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS The above-captioned information appears under Management's Discussion and Analysis of Results of Operations and Financial Condition in the Registrant's 2000 Annual Report to Stockholders on pages 8 through 20 and is incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS The Consolidated Financial Statements of Annapolis National Bancorp, Inc. and its subsidiary, together with the report thereon by Stegman & Company for the year ended December 31, 2000 appears in the Registrant's 2000 Annual Report to Stockholders on pages 22 through 38 and are incorporated herein by reference. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. PART III ITEM 9. DIRECTORS, OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT The information relating to directors, officers, promoters and control persons is incorporated herein by reference to the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on May 17, 2001. ITEM 10. EXECUTIVE COMPENSATION The information relating to directors' and executive compensation is incorporated herein by reference to the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on May 17, 2001. 4 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information relating to security ownership of certain beneficial owners and management is incorporated herein by reference to the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on May 17, 2001. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information relating to certain relationships and related transactions is incorporated herein by reference to the Registrant's Proxy Statement for the Annual Meeting of Shareholders to be held on May 17, 2001. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) The following documents are filed as a part of this report: (1) Financial Statements Consolidated Financial Statements of the Company are incorporated by reference to the following indicated pages of the 2000 Annual Report to Stockholders:
PAGE Independent Auditors' Report.................................................................. 31 Consolidated Balance Sheets as of December 31, 2000, 1999 and 1998.............................................................. 32 Consolidated Statements of Income for the Years ended December 31, 2000, 1999 and 1998.................................................. 33 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2000, 1999 and 1998.......................................... 34 Consolidated Statements of Cash Flows for the Years ended December 31, 2000, 1999 and 1998.................................................. 35 Notes to Consolidated Financial Statements.................................................... 36-47
The remaining information appearing in the Annual Report to Stockholders is not deemed to be filed as part of this report, except as expressly provided herein. (2) Exhibits The following exhibits are filed as part of this report. 3.1 Articles of Incorporation of Annapolis National Bancorp, Inc.* 3.2 Bylaws of Annapolis National Bancorp, Inc.* 3.3 Articles of Incorporation of BankAnnapolis 3.4 Bylaws of BankAnnapolis 4.0 Stock Certificate of Annapolis National Bancorp, Inc.* 10.1 Employment Agreement between Annapolis National Bancorp, Inc. and Mark H. Anders** 10.2 Annapolis National Bancorp, Inc. Employee Stock Option Plan* 11.0 Computation of earnings per share (filed herewith) 13.0 Portions of 2000 Annual Report to Stockholders (filed herewith) 21.0 Subsidiary information is incorporated herein by reference to Part I - "Subsidiaries" 23.0 Consent of Independent Auditors 23.1 Consent of Independent Auditors 99.0 2000 Proxy Statement** * Incorporated herein by reference to the Exhibits to Form SB-2, Registration Statement, filed on June 23, 1997 and any Amendments thereto, Registration No. 333-29841. 5 ** Incorporated herein by reference to the Company's Proxy Statement for its Annual Meeting of Stockholders, which will be filed with the Commission Within 120 days of the end of the Company's fiscal year. (b) Reports on Form 8-K: None CONFORMED SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. ANNAPOLIS NATIONAL BANCORP, INC. By: /s/ Richard M. Lerner --------------------- Richard M. Lerner President, Chief Executive Officer and Director Date: March 23, 2001 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates stated.
NAME Title Date ---- ----- ---- /s/ Richard M. Lerner President, Chief Executive Officer and March 23, 2001 -------------------------- Director (principal executive officer) Richard M. Lerner /s/ Margaret Theiss Faison Senior Vice President, Treasurer and March 23, 2001 -------------------------- Chief Financial Officer (principal Margaret Theiss Faison accounting and financial officer) /s/ Mark H. Anders Director March 23, 2001 -------------------------- Mark H. Anders /s/ F. Carter Heim Director March 23, 2001 -------------------------- F. Carter Heim /s/ Stanley J. Klos, Jr. Director March 23, 2001 -------------------------- Stanley J. Klos, Jr. /s/ Lawrence E. Lerner Director March 23, 2001 -------------------------- Lawrence E. Lerner /s/ Dimitri P. Mallios Director March 23, 2001 -------------------------- Dimitri P. Mallios /s/ Albert Phillips Chairman March 23, 2001 -------------------------- Albert Phillips /s/ Lawrence W. Schwartz Director March 23, 2001 -------------------------- Lawrence W. Schwartz /s/ Ermis Sfakiyanudis Director March 23, 2001 -------------------------- Ermis Sfakiyanudis
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