SEC Company Response from Northside Bancshares, Inc. (CIK 0001319087) — Apr 20, 2005
Northside Bancshares, Inc. (CIK 0001319087)
Date: April 20, 2005 · CIK: 0001319087 · Accession: 0000950144-05-004093
AI Filing Summary & Sentiment
File numbers found in text: 333-123386
Letter
Thomas O. Powell Direct Dial:404-885-3294 thomas.powell@troutmansanders.com Direct Fax: 404-962-6658 April 20, 2005 VIA EDGAR Securities and Exchange Commission Division of Corporate Finance Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549-1004 Attention: William Friar Senior Financial Analyst
Re: Northside Bancshares, Inc. Form SB-2 filed March 17, 2005 File No. 333-123386
Dear Mr. Friar:
Northside Bancshares, Inc. ("Northside") has filed today via EDGAR Amendment No. 1 ("Amendment No. 1") to the above-referenced registration statement. The enclosed Amendment No. 1 has been marked to clearly show the changes made to the registration statement, filed on March 17, 2005.
Northside and its counsel have reviewed the Staff's comments delivered by letter dated as of April 5, 2005. The form of our response below is to restate the comment in its entirety, with our responses immediately following. We have not changed the page references in the comment, even though the revisions described in our reply may result in changes to the pages of the prospectus referenced in the comment. However, all page references in the responses below refer to the pages in the marked version of the registration statement enclosed herewith. The terms "we," "us," "our" and the like in the following responses refer to Northside.
General
1. Please provide copies of marketing material.
<PAGE>
WE HAVE SUPPLEMENTALLY PROVIDED TO THE STAFF THE FOLLOWING MATERIALS WHICH HAVE BEEN DISTRIBUTED TO POTENTIAL INVESTORS: (i) A NEWSLETTER OF NORTHSIDE BANK (IN ORGANIZATION); (ii) AN INDICATION OF INTEREST AND (III) A COVER LETTER TO POTENTIAL INVESTORS. IN EACH CASE, DELIVERY OF THESE MATERIALS WAS MADE CONCURRENT WITH DELIVERY OF A PRELIMINARY PROSPECTUS.
Summary - page 1
2. Please add a section entitled "Benefits of the Offering to Organizers and Management" disclosing and quantifying the stock option plan, warrants, employment and change in control agreements and any other benefits the organizers and management will receive. Disclose how the stock option plan will impact compensation expenses and dilute the ownership interests of purchasers in this offering.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE ADDED THE REQUESTED SECTION. PLEASE SEE PAGE 3.
Dividends - page 6
3. If you anticipate losses in your first year or years, please note.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE REVISED OUR DISCUSSION REGARDING DIVIDENDS TO CLARIFY THAT WE ANTICIPATE LOSSES IN OUR FIRST FEW YEARS OF OPERATION. PLEASE SEE PAGES 7 AND 22.
Philosophy and Strategy - page 27
4. Clarify the uncertainty involved in achieving the results you intend.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE MADE THE REQUESTED REVISION. PLEASE SEE PAGE 30.
Lending Services - page 28
5. We note you anticipate a loan portfolio consisting of 15% residential real estate loans and the remaining 85% of your loans to carry greater risk. Clarify that the loan portfolio you project contains more risk than a portfolio emphasizing residential real estate loans.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE MADE THE REQUESTED REVISION. PLEASE SEE PAGE 30.
Credit Risks - page 29
<PAGE>
6. Clarify how "new job creation trends" are a risk to loan repayments.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE REVISED THE ABOVE- REFERENCED LANGUAGE TO "EMPLOYMENT RATE TRENDS" TO CLARIFY THE RISK TO LOAN REPAYMENTS. PLEASE SEE PAGES 32 AND 33.
7. Disclose the risks of all your loan types, including residential real estate, commercial and consumer loans.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE MADE THE REQUESTED REVISIONS. PLEASE SEE PAGES 32 AND 33.
8. Expand the disclosure of the risks associated with construction loans.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE EXPANDED OUR DISCUSSION OF THE RISKS ASSOCIATED WITH CONSTRUCTION LOANS. PLEASE SEE PAGE 32.
Financial Statements
9. Please revise the notes to the financial statements to disclose the fiscal reporting period the company has elected, clarifying the basis for audited financial statements as of January 31, 2005.
WE HAVE REVISED THE NOTES TO THE FINANCIAL STATEMENTS TO CLARIFY THAT WE WILL HAVE A FISCAL YEAR END OF DECEMBER 31. HOWEVER, AS STATED IN THE NOTES TO THE FINANCIAL STATEMENTS, THE FINANCIAL STATEMENTS INCLUDED IN THE PROSPECTUS WERE PREPARED AS OF JANUARY 31, 2005 BECAUSE THE COMPANY WAS INCORPORATED IN JANUARY 2005 AND JANUARY 31, 2005 WAS THE LATEST PRACTICABLE DATE FOR THE FINANCIAL STATEMENTS TO BE INCLUDED IN THE PROSPECTUS. PLEASE SEE PAGE F-7.
Note 5. Commitments and Related Party Transactions - page F-9
10. Please revise here and in the front of the document as applicable to disclose the value that will be ascribed to the 95,000 shares that will be issued to a related party for land. Clarify how you considered the requirements of APB 29. Disclose whether or not an appraisal was obtained for the land, which would appear to have a more readily determinable market value than your previously unissued shares. If an appraisal was not obtained, disclose why. Also, disclose the assumptions used by the Company in its analysis and resulting determination that this transaction is fair to all parties.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE REVISED THE DISCUSSION REGARDING THIS RELATED PARTY TRANSACTION TO INDICATE THAT THE VALUE ASCRIBED TO THE 95,000 SHARES THAT WILL BE ISSUED TO A RELATED PARTY FOR LAND HAS BEEN DETERMINED BASED ON TWO APPRAISALS RECEIVED BY THE BOARD OF DIRECTORS AND ADDITIONAL ANALYSIS PERFORMED BY <PAGE>
THE COMPANY. IN ADDITION WE HAVE ALSO CLARIFIED THAT THIS TRANSACTION, WHEN COMPLETED, WILL BE ACCOUNTED FOR UNDER THE REQUIREMENTS OF APB 29. PLEASE SEE PAGES 47 AND F-9.
We would appreciate your prompt review of Amendment No. 1. Should the Staff have any additional comments with respect to the attached materials, please contact the undersigned at (404) 885-3294, David Ghegan at (404) 885-3139 or Patrick Macken at (404) 885-3136.
Very truly yours,
TROUTMAN SANDERS LLP
Show Raw Text
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TROUTMAN SANDERS LLP
ATTORNEYS AT LAW
A LIMITED LIABILITY PARTNERSHIP
BANK OF AMERICA PLAZA
600 PEACHTREE STREET, N.E. - SUITE 5200
ATLANTA, GEORGIA 30308-2216
www.troutmansanders.com
TELEPHONE: 404-885-3000
FACSIMILE: 404-885-3900
Thomas O. Powell Direct Dial:404-885-3294
thomas.powell@troutmansanders.com Direct Fax: 404-962-6658
April 20, 2005
VIA EDGAR
Securities and Exchange Commission
Division of Corporate Finance
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549-1004
Attention: William Friar
Senior Financial Analyst
Re: Northside Bancshares, Inc.
Form SB-2 filed March 17, 2005
File No. 333-123386
Dear Mr. Friar:
Northside Bancshares, Inc. ("Northside") has filed today via EDGAR
Amendment No. 1 ("Amendment No. 1") to the above-referenced registration
statement. The enclosed Amendment No. 1 has been marked to clearly show the
changes made to the registration statement, filed on March 17, 2005.
Northside and its counsel have reviewed the Staff's comments delivered
by letter dated as of April 5, 2005. The form of our response below is to
restate the comment in its entirety, with our responses immediately following.
We have not changed the page references in the comment, even though the
revisions described in our reply may result in changes to the pages of the
prospectus referenced in the comment. However, all page references in the
responses below refer to the pages in the marked version of the registration
statement enclosed herewith. The terms "we," "us," "our" and the like in the
following responses refer to Northside.
General
1. Please provide copies of marketing material.
<PAGE>
WE HAVE SUPPLEMENTALLY PROVIDED TO THE STAFF THE FOLLOWING MATERIALS
WHICH HAVE BEEN DISTRIBUTED TO POTENTIAL INVESTORS: (i) A NEWSLETTER OF
NORTHSIDE BANK (IN ORGANIZATION); (ii) AN INDICATION OF INTEREST AND
(III) A COVER LETTER TO POTENTIAL INVESTORS. IN EACH CASE, DELIVERY OF
THESE MATERIALS WAS MADE CONCURRENT WITH DELIVERY OF A PRELIMINARY
PROSPECTUS.
Summary - page 1
2. Please add a section entitled "Benefits of the Offering to
Organizers and Management" disclosing and quantifying the
stock option plan, warrants, employment and change in control
agreements and any other benefits the organizers and
management will receive. Disclose how the stock option plan
will impact compensation expenses and dilute the ownership
interests of purchasers in this offering.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE ADDED THE REQUESTED
SECTION. PLEASE SEE PAGE 3.
Dividends - page 6
3. If you anticipate losses in your first year or years, please
note.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE REVISED OUR DISCUSSION
REGARDING DIVIDENDS TO CLARIFY THAT WE ANTICIPATE LOSSES IN OUR FIRST
FEW YEARS OF OPERATION. PLEASE SEE PAGES 7 AND 22.
Philosophy and Strategy - page 27
4. Clarify the uncertainty involved in achieving the results you
intend.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE MADE THE REQUESTED REVISION.
PLEASE SEE PAGE 30.
Lending Services - page 28
5. We note you anticipate a loan portfolio consisting of 15%
residential real estate loans and the remaining 85% of your
loans to carry greater risk. Clarify that the loan portfolio
you project contains more risk than a portfolio emphasizing
residential real estate loans.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE MADE THE REQUESTED REVISION.
PLEASE SEE PAGE 30.
Credit Risks - page 29
<PAGE>
6. Clarify how "new job creation trends" are a risk to loan
repayments.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE REVISED THE ABOVE-
REFERENCED LANGUAGE TO "EMPLOYMENT RATE TRENDS" TO CLARIFY THE RISK TO
LOAN REPAYMENTS. PLEASE SEE PAGES 32 AND 33.
7. Disclose the risks of all your loan types, including
residential real estate, commercial and consumer loans.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE MADE THE REQUESTED
REVISIONS.
PLEASE SEE PAGES 32 AND 33.
8. Expand the disclosure of the risks associated with
construction loans.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE EXPANDED OUR DISCUSSION OF
THE RISKS ASSOCIATED WITH CONSTRUCTION LOANS. PLEASE SEE PAGE 32.
Financial Statements
9. Please revise the notes to the financial statements to
disclose the fiscal reporting period the company has elected,
clarifying the basis for audited financial statements as of
January 31, 2005.
WE HAVE REVISED THE NOTES TO THE FINANCIAL STATEMENTS TO CLARIFY THAT
WE WILL HAVE A FISCAL YEAR END OF DECEMBER 31. HOWEVER, AS STATED IN
THE NOTES TO THE FINANCIAL STATEMENTS, THE FINANCIAL STATEMENTS
INCLUDED IN THE PROSPECTUS WERE PREPARED AS OF JANUARY 31, 2005 BECAUSE
THE COMPANY WAS INCORPORATED IN JANUARY 2005 AND JANUARY 31, 2005 WAS
THE LATEST PRACTICABLE DATE FOR THE FINANCIAL STATEMENTS TO BE INCLUDED
IN THE PROSPECTUS. PLEASE SEE PAGE F-7.
Note 5. Commitments and Related Party Transactions - page F-9
10. Please revise here and in the front of the document as
applicable to disclose the value that will be ascribed to the
95,000 shares that will be issued to a related party for land.
Clarify how you considered the requirements of APB 29.
Disclose whether or not an appraisal was obtained for the
land, which would appear to have a more readily determinable
market value than your previously unissued shares. If an
appraisal was not obtained, disclose why. Also, disclose the
assumptions used by the Company in its analysis and resulting
determination that this transaction is fair to all parties.
IN RESPONSE TO THE STAFF'S COMMENT, WE HAVE REVISED THE DISCUSSION
REGARDING THIS RELATED PARTY TRANSACTION TO INDICATE THAT THE VALUE
ASCRIBED TO THE 95,000 SHARES THAT WILL BE ISSUED TO A RELATED PARTY
FOR LAND HAS BEEN DETERMINED BASED ON TWO APPRAISALS RECEIVED BY THE
BOARD OF DIRECTORS AND ADDITIONAL ANALYSIS PERFORMED BY
<PAGE>
THE COMPANY. IN ADDITION WE HAVE ALSO CLARIFIED THAT THIS TRANSACTION,
WHEN COMPLETED, WILL BE ACCOUNTED FOR UNDER THE REQUIREMENTS OF APB 29.
PLEASE SEE PAGES 47 AND F-9.
We would appreciate your prompt review of Amendment No. 1. Should the
Staff have any additional comments with respect to the attached materials,
please contact the undersigned at (404) 885-3294, David Ghegan at (404) 885-3139
or Patrick Macken at (404) 885-3136.
Very truly yours,
TROUTMAN SANDERS LLP
/s/ Thomas O. Powell
Attachments
cc: Gregory F. Patton
Barry J. Adcock
David Wood
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