Financial Services IPO: Omni Financial Files S-1 (OFSI)

Key details about the Omni Financial Services IPO filed on June 14th. Proposed ticker: (OFSI). All excerpts are from the full SEC filing:

Company Description

We are a bank holding company headquartered in Atlanta, Georgia. Our operations are principally conducted through our wholly owned subsidiary, Omni National Bank, a national bank headquartered in Atlanta, Georgia. We have one full-service banking location in Atlanta, Georgia, one in Dalton, Georgia, four in North Carolina, one in Chicago, Illinois and one in Tampa, Florida. In addition, we have loan production offices in Charlotte, North Carolina, Dalton, Georgia and Birmingham, Alabama. On a consolidated basis, as of March 31, 2006, we had approximately $531.0 million in assets, $367.0 million in net loans, $376.1 million in deposits and $35.5 million in shareholders’ equity.

We provide a broad array of financial products and services, including specialized services such as community redevelopment lending, small business lending and equipment leasing, residential construction lending, consumer lending, warehouse lending and asset-based lending. We seek to expand our financial products and services and geographic markets to meet the needs of our customers, diversify our revenue stream and mitigate our exposure to regional economic downturns. For the first quarter of 2006, no single product or service line generated more than 27% of our gross revenue, and approximately 26% of our gross revenue was generated outside of the metropolitan Atlanta market.

Key Financial Data

Balance Sheet: Total assets as of the end of March 2006 were $531 million. Comparable figure for Q1 of 2005 was $360 million. Net loans receivable were $367 million (compared with $248 million Q1 05); short term borrowing and long term debt was $91.6 million (compared with $66.8 million Q1 05).

Income Statement: Net interest income after provision for loan losses was $11.6 million in 2004, growing to $16.9 million in 2006. For the first quarter of 2006, this figure was $5.3 million, up 53% of Q1 2005's net of $3.5 million.

Select Perfomance and Growth Ratios (2005 figures):

1. Return on Average Assets: 1.2% (1.34% in 2004)
2. Net Interest Margin: 4.72% (5.2% in 2004)
3. Allowance for loan losses to non-performing loans: 126.5% (192.8% in 2004)
4. Percentage change, net income: 35.3% (72.4% in 2004)
5. Percentage change, assets: 50.1% (49.7% in 2004)
6. Percentage change, net loans: 44.9% (45.3% in 2004)
7. Percentage change, deposits: 49.7% (30.6% in 2004)

Key Shareholders: Directors and executive officers hold 77.4% of the company today with Chairman and CEO Stephen Klein (co-founder) holding 44.7%, EVP Jeffrey Levine (co-founder) holding 17% and the remainder split between ten more individuals.

Notable Issues To Watch For

We lack experience in obtaining retail deposits, and further branch expansion in an effort to obtain such deposits may be unsuccessful and adversely affect our financial condition, results of operations or cash flows.

We have historically relied upon wholesale funding to fund our lending practices, but our goal is to develop a more significant retail deposit presence in the future. Although we recently engaged in a limited marketing campaign in North Carolina, we have not successfully implemented an effective retail deposit presence and do not have experience expanding or managing a retail branch network in multiple cities and states. We may need to identify and retain an experienced manager to develop a retail deposit capability and may be unable to do so. Our retail deposit strategy may result in additional competition which could require additional expense in order for us to compete. Finally, the process of opening new branches may divert our time and resources, and the investment necessary for retail branch expansion may negatively impact our efficiency ratio and profitability. If we are not able to develop a more significant retail deposit presence, our financial condition, results of operation and cash flows could be adversely affected.

We have different lending risks than many banks.

We engage in a greater number of lending activities than most community banks our size. As a result, our management team must monitor a number of different business activities. We may not have the resources to manage these activities to the same extent as larger financial institutions. Furthermore, we lend primarily to small to medium-sized businesses, professional corporations and their proprietors, which may expose us to greater lending risks than banks lending primarily to larger, better-capitalized businesses with longer operating histories.

Underwriters: Sandler O'Neill; Keefe, Bruyette & Woods

Offering Details: The company is looking to raise up to $25 million. Use of proceeds is for possible acquisitions and corporate growth.