****


****




**SECURITIES
AND EXCHANGE COMMISSION**


**WASHINGTON,
D.C. 20549**




**FORM
10 - QSB**




**QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
THE SECURITIES EXCHANGE ACT OF 1934**




**For
the quarterly period ended March 31, 2005**




Commission
File Number 333-120681




**SUNBELT
BANCSHARES, INC.**


(Exact
name of registrant as specified in its charter)




**Texas**
    
    **20-1496006**(State
      or other jurisdiction of
    
    (I.R.S.
      Employerincorporation
      or organization)
    
    Identification
      No.)**1625
      North Stemmons Freeway, Dallas, Texas
75207**(Address
      of principal executive offices, including zip code)**(214)
      217-3971**(Registrant’s
      telephone number, including area code)


Indicate
by check mark whether the registrant: (i) 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 (ii) has been subject to such filing requirements for
the past 90 days.


Yes [X]
No [   ]




The
number of shares outstanding of the issuer’s Common Stock as of May 16, 2005,
was 0 shares.
















**INDEX**




PART
      I - FINANCIAL INFORMATIONITEM
      1 FINANCIAL STATEMENTS
    3ITEM
      2 MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
    8ITEM
      3. CONTROLS AND PROCEDURES
    12PART
      II. OTHER INFORMATIONITEM
      1. LEGAL PROCEEDINGS
    12ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
    PROCEEDS
    12ITEM
      3. DEFAULTS UPON SENIOR SECURITIES
    14ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    14ITEM
      5. OTHER INFORMATION
    14ITEM
      6. EXHIBITS AND REPORTS ON FORM 8-K
    14















-2-





**PART
I - FINANCIAL INFORMATION**




**ITEM
1. FINANCIAL STATEMENTS**





**Sunbelt Bancshares, Inc. (In
Organization)**
 **(A Development Stage
Enterprise)**
 
 **Balance Sheets - Unaudited**
 
 March
      31,
      2005
    
    December
      31,
      2004ASSETS
    
    
    
    (1)Cash
    
    $
    12,786
    
    $
    21,895Deferred
      stock issuance costs
    
    
    301,950
    
    
    212,250Total
      assets
    
    $
    314,736
    
    $
    234,145LIABILITIES
      AND STOCKHOLDERS' DEFICITAccounts
      payable-trade
    
    $
    216,175
    
    $
    --Accrued
      expenses
    
    
    4,919
    
    
    104,026Line
      of credit
    
    
    410,000
    
    
    --Advances
      from organizers
    
    
    570,000
    
    
    770,000$
    1,201,094
    
    $
    874,026Stockholders'
      deficit:Common
      stock, par value $.01; 10,000,000 shares authorized; none issued and
      outstanding
    
    
    --
    
    
    --Deficit
      accumulated during the development stage
    
    
    (886,358
    )
    
    (639,881
    )Total
      stockholders' deficit
    
    
    (886,358
    )
    
    (639,881
    )Total
      liabilities and stockholders' deficit
    
    $
    314,736
    
    $
    234,145
  (1)
    Derived
      from Audited Financial Statements.
 See Notes
to Financial Statements.
 
 -3-
 **Sunbelt Bancshares, Inc. (In
Organization)**
 **(A Development Stage
Enterprise)**
 
 **Statements of Operations -
Unaudited**
 Three
      Months Ended
    
    CumulativeMarch
      31,
    
    Since2005
    
    2004
    
    InceptionExpenses:Professional
      fees
    
    $
    77,563
    
    $
    4,353
    
    $
    250,082Consulting
      fees
    
    
    26,017
    
    
    24,917
    
    
    337,617Payroll
    
    
    41,749
    
    
    --
    
    
    41,749Regulatory
      application and filing fees
    
    
    12,920
    
    
    --
    
    
    115,306Miscellaneous
    
    
    88,228
    
    
    13,314
    
    
    141,604Net
      loss and deficit accumulatedduring
      the development stage
    
    $
    (246,477
    )
    $
    (42,584
    )
    $
    (886,358
    )
  See Notes
to Financial Statements.
  
 -4-
 **Sunbelt Bancshares, Inc. (In
Organization)**
 **(A Development Stage
Enterprise)**
 
 **Statements of Cash Flows -
Unaudited**
 Three
      Months Ended
      March
      31,
    
    Cumulative
      Since2005
    
    2004
    
    InceptionCash
      flows from operating activities:Net
      loss
    
    $
    (246,477
    )
    $
    (42,584
    )
    $
    (886,358
    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Changes
      in operating assets and liabilities:Deferred
      stock issuance costs
    
    
    (89,700
    )
    
    (36,000
    )
    
    (301,950
    )Accrued
      expenses
    
    
    (99,107
    )
    
    --
    
    
    4,919Accounts
      payable
    
    
    216,175
    
    
    --
    
    
    216,175Net
      cash used in operating activities
    
    
    (219,109
    )
    
    (78,584
    )
    
    (967,214
    )Cash
      flows from financing activities:Advances
      from organizers
    
    
    --
    
    
    120,000
    
    
    770,000Repayments
      of advances from organizers
    
    
    (200,000
    )
    
    --
    
    
    (200,000
    )Borrowings
      under line of credit
    
    
    410,000
    
    
    --
    
    
    410,000Net
      cash provided by financingactivities
    
    
    210,000
    
    
    120,000
    
    
    980,000Net
      (decrease) increase in cash
    
    
    (9,109
    )
    
    41,416
    
    
    12,786Cash
      at beginning of period
    
    
    21,895
    
    
    70,678
    
    
    --Cash
      at end of period
    
    $
    12,786
    
    $
    112,094
    
    $
    12,786
  See Notes
to Financial Statements.
 -5-
  **Sunbelt Bancshares, Inc. (In
Organization)**
 **(A Development Stage
Enterprise)**
 
 **Notes to Financial Statements - Unaudited**
****
 **Note
1.** **Organization
and Nature of Operations**
 
 Sunbelt
Bancshares, Inc. (“the Company”) is a proposed bank holding company incorporated
on December 18, 2002 for the purpose of forming a de novo bank subsidiary.
The Company’s development stage activities, which commenced on January 1, 2003,
have consisted primarily of preparing and filing applications with various bank
regulatory authorities for permission to organize a state bank and a bank
holding company, and taking all other actions necessary to organize and charter
the bank, including the sale of the Company’s common stock. On June 30, 2004,
the Company filed an application with the Texas Department of Banking to
organize the Bank and with the Federal Deposit Insurance Corporation for federal
deposit insurance. As of December 31, 2004, these applications were approved
subject to certain conditions, including: (1) capitalizing the Bank with at
least $10,600,000, and (2) implementing appropriate banking policies and
procedures. The Bank expects to receive all necessary final regulatory approvals
and begin banking operations during the third quarter of 2005.
 
 The
Company was formed under the name “First Cornerstone Capital, Inc.”. The Company
changed the name to Sunbelt Bancshares, Inc. in January 2004.
 
 In
February 2005, the Company’s Registration Statement on Form SB-2 became
effective and it offered for sale a minimum of 1,240,000 shares and a maximum of
1,500,000 shares of its common stock at $10 per share. (See Note 2) The
proceeds of the offering will be utilized primarily to capitalize the Bank and
reimburse the organizers for certain organizational expenses.
 
 Upon
commencement of operations, the Bank intends to be a full service commercial
bank initially serving customers in the South Arlington, Mansfield, Texas area.
The Company’s fiscal year ends on December 31.
 
 The
Company’s ability to commence operations is dependent upon, among other matters,
the receipt of various regulatory approvals, equity capital of at least $12.4
million raised through the sale of the Company’s common stock and receipt of
deposit insurance from the Federal Deposit Insurance Corporation.
 
 The
accompanying unaudited consolidated financial statements have been prepared in
accordance with the instructions to Form 10-QSB and, therefore, do not include
all of the disclosures and notes required by U.S. generally accepted accounting
principles. In the opinion of management, all material adjustments (which are of
a normal recurring nature) considered necessary for a fair presentation have
been made. The information included in this Form 10-QSB should be read in
conjunction with Management’s Discussion and Analysis and the financial
statements and notes included in the Company’s 2004 Form 10-KSB. The results for
the interim period are not necessarily indicative of the results to be expected
for the entire year or any other interim period.
 
 **Note
2.** **Common
Stock Offering**
 
 In
February 2005, the Company’s Registration Statement on Form SB-2 became
effective and it offered for sale a minimum of 1,240,000 shares and a maximum of
1,500,000 shares of its common stock at an offering price of $10 per share. In
addition, the Company will issue one stock purchase warrant for every five
shares of common stock purchased, up to a maximum of 300,000 warrants. The
warrants will entitle the holder to purchase one share of the Company’s common
stock for $12.50 at any time within three years of the date the Bank opens for
business. The Company is not using an underwriter and officers of the Company
will be selling the shares on a best efforts basis. The officers of the Company
will not receive any commission in connection with the sale of
shares.
 
 -6-
 
 **Sunbelt Bancshares, Inc. (In
Organization)**
**(A Development Stage
Enterprise)**
****
**Notes to Financial Statements - Unaudited**
****
 **Note
3.** **Consulting
Agreement**
 
 The
Company has entered into a consulting agreement with the President and Chief
Lending Officer as of February 1, 2005. The agreement is scheduled to
terminate on the earlier of (1) December 31, 2005 or (2) the date on which the
bank opens for business. The agreement provides for annual compensation of
$63,749.88 until December 31, 2005 and deferred compensation of $14,166.64 to be
accrued for the benefit of the President and Chief Lending Officer.
  **Note
4.** **Pre-Organizational
Loan**
 
 On
January 15, 2005, the Company obtained a working capital line of credit from
TIB-The Independent Bankers Bank (TIB) in the amount of $600,000, with an
interest rate of prime plus 50 basis points floating daily. The loan matures on
June 30, 2005 or upon lender’s demand and is guaranteed by the
Organizers.
  **Note
5.** **Subsequent
Event**
 
 On April
6, 2005, Epic Realm Technologies, LLC, an entity affiliated with several of the
organizers, loaned the Company a total of $200,000 as a bridge loan until the
Company is able to draw the final $200,000 under the TIB line of
credit.
 
  -7-




**I** **TEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.**




The
following discussion and analysis provides information which the Company
believes is relevant to an assessment and understanding of the Company’s results
of operations and financial condition. This discussion should be read in
conjunction with the financial statements and accompanying notes appearing in
this report.




Statements
contained in this report that are not purely historical are forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, including the Company’s and Bank’s expectations, intentions,
beliefs, or strategies regarding the future. Any
statements in this document about expectations, beliefs, plans, objectives,
assumptions or future events or performance are not historical facts and are
forward-looking statements. These statements are often, but not always, made
through the use of words or phrases such as “may,” “should,” “could,” “predict,”
“potential,” “believe,” “will likely result,” “expect,” “will continue,”
“anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and
“outlook,” and similar expressions. Accordingly, these statements involve
estimates, assumptions and uncertainties, which could cause actual results to
differ materially from those expressed in them. Any forward-looking statements
are qualified in their entirety by reference to the factors discussed throughout
this document. All
forward-looking statements concerning economic conditions, rates of growth,
rates of income or values included in this document are based on information
available to the Company on the dates noted, and the Company assumes no
obligation to update any such forward-looking statements. It is important to
note that the actual results of the Company or the Bank may differ materially
from those in such forward-looking statements due to fluctuations in interest
rates, inflation, government regulations, economic conditions, customer
disintermediation and competitive product and pricing pressures in the
geographic and business areas in which the Company and the Bank conduct
operations, including their respective plans, objectives, expectations and
intentions and other factors discussed under the section entitled “Risk
Factors,” in the Company’s Annual Report on Form 10-KSB for the year ended
December 31, 2004, and the Company’s Prospectus contained in its Registration
Statement on Form SB-2, which was declared effective on February 14, 2005,
including the following:




·
    the
      Company and Bank must receive regulatory approvals before the Bank may
      open for business;




·
    the
      Bank must satisfy certain conditions following regulatory approval before
      it may open for business;




·
    any
      delay in beginning banking operations will result in additional
      losses;




·
    the
      Company has no operating history upon which to base an estimate of its
      future financial performance;




·
    the
      Company expects to incur losses during its initial years of
      operations;




·
    failure
      of the Company or the Bank to implement its business strategies may
      adversely affect its financial performance.




·
    the
      Company’s profitability will be affected by the ability of Bank management
      to measure and limit credit risk associated with the Bank’s loan
      portfolio;




·
    the
      Bank’s emphasis on commercial business and commercial real estate lending
      may result in greater credit risk;




-8-




·
    departures
      of key personnel or directors
      may impair the Bank’s operations;




·
    the
      Bank will face intense competitionfrom a variety of competitors;




·
    the
      Bank’s legal lending limits may impair its ability to attract
      borrowers;




·
    an
      economic downturn, especially one affecting the Bank’s primary service
      areas, may have an adverse effect on the Company’s financial
      performance;




·
    monetary
      policy and other economic factors could adversely affect the Bank’s
      profitability;




·
    the
      Bank could be negatively affected by changes in interest rates;




·
    the
      determination of the offering price in the initial public offering was
      arbitrary, and shareholders may be unable to resell their shares at or
      above the offering price;




·
    the
      Company’s ability
      to pay dividends is limited;




·
    the
      Company and Bank are subject to extensive regulatory oversight,
      which could restrain growth and profitability;
      and




·
    the
      Company may not be able to raise additional capital on terms favorable to
      it.




These
factors and the risk factors referred to in the Company’s Annual Report on Form
10-KSB and its Prospectus, dated February 15, 2005, could cause actual results
or outcomes to differ materially from those expressed in any forward-looking
statements made by the Company, and you should not place undue reliance on any
such forward-looking statements. Any forward-looking statement speaks only as of
the date on which it is made and the Company does not undertake any obligation
to update any forward-looking statement or statements to reflect events or
circumstances after the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to time, and it
is not possible for the Company to predict which will arise. In addition, the
Company cannot assess the impact of each factor on the business of the Company
or the Bank or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.




**OVERVIEW**




The
Company is a Texas corporation that was incorporated on December 18, 2002 to
organize and serve as the holding company for a proposed de novo bank, Sunbelt
Bank (In Organization) (the “Bank”). The Bank will be a full service commercial
bank headquartered in southwest Arlington, Texas, with a full service banking
office in southeast Arlington, and will initially serve south Arlington,
Mansfield and the neighboring communities.




On June
30, 2004, an application was filed with the Texas Department of Banking (TDB) to
organize the Bank and with the FDIC for federal deposit insurance. The Bank has
received the regulatory approvals of the TDB and the FDIC; however, these
regulatory approvals are subject to certain conditions that the Bank must
satisfy before receiving a license to commence banking operations, including:
(1) capitalizing the Bank with at least $10.6 million, and (2) implementing
appropriate banking policies and procedures. The Company expects to capitalize
the Bank with proceeds from the Company’s initial public offering, and receive
all necessary final regulatory approvals and begin banking operations during the
third quarter of 2005.




The
Company has filed a Registration Statement on Form SB-2 with the Securities and
Exchange Commission (the “SEC”) which Registration Statement became effective
February 14, 2005. Pursuant to the Registration Statement, a minimum of
1,240,000 shares of the Company’s common stock, $.01 par value per share (the
“Common Stock”), and a maximum of 1,500,000 shares of Common Stock were
registered for sale at an offering price of $10.00 per share. The Company
expects to use at least $10.6 million of the proceeds of its initial public
offering to capitalize the Bank if it sells 1,240,000 shares and at least $13.2
million to capitalize the Bank if it sells 1,500,000 shares. As of May 16,
2005, funds in the amount of approximately $492,500 have been received
into escrow for the purchase of shares.




-9-




In
addition to raising the capital necessary to open the Bank, during the period
between regulatory approval and the commencement of banking operations, the
Company’s main activities have included:




·
    Seeking,
      interviewing and selecting the organizers, directors and officers of the
      Company and the Bank;




·
    Preparing
      the business plan;




·
    Applying
      for a Texas state bank charter;




·
    Applying
      for FDIC deposit insurance; and




·
    Applying
      with the Federal Reserve to become a bank holding
  company.




**PLAN
OF OPERATION**




We intend
to open the Bank in a temporary modular facility near the site of our future
main office, which will also serve as the Bank's main office. The Bank will
lease the temporary modular facility. We expect construction of our main office
to be complete approximately 12 months after the Bank opens. Our proposed main
office will be located at 7240 U. S. Highway 287, Arlington, Texas. The building
will be a free-standing one story office building having up to approximately
8,000 square foot. The Bank will also operate from a branch office to be located
at the intersection of Mayfield Road and U. S. Highway 360 in Arlington, Texas,
which is approximately 12 miles from our main office. The branch office will
occupy up to 5,000 square feet in a one story free-standing office building. The
Bank has executed lease agreements with respect to each of its proposed banking
locations. These leases are contingent on the Bank receiving all necessary
regulatory approvals and opening for business. Under each agreement, the Bank
will have two options to renew and to extend the term of the lease for
84 months each. In addition, the landlord will have a right of first
refusal of 21 days from notice by the Bank to develop for lease any space
or facility to be used by the Bank. In consideration for the right of first
refusal, the Bank is not being required to pay any monthly cash rental amount
for use of the leased land during the construction period of the permanent
building. The obligations of the Bank under the leases are being guaranteed by
the Company.




At this
time, we do not intend to own any of the properties from which we conduct
banking operations. We expect to use approximately $585,400 of the proceeds of
the Company’s initial public offering to purchase furniture, fixtures and
equipment at the two permanent locations. Management believes that the temporary
facilities will be adequate to meet our initial needs until the permanent
facilities are available. We expect to hire up to 17 full-time equivalent
employees to staff our banking offices and do not expect that the Company will
have any employees who are not also employees of the Bank.




The Bank
will use the remainder of its capital for customer loans, investments and other
general banking purposes. We believe that the Company’s minimum initial offering
proceeds will enable the Bank to maintain a leverage capital ratio, which is a
measure of core capital to average total assets, in excess of 8% for the first
three years of operations as required by the FDIC. Accordingly, we do not
anticipate raising additional capital during the 12-month period following the
completion of the Company’s initial public offering. However, we cannot assure
you that we will not need to raise additional capital within the next three
years or over the next 12-month period.




-10-




We
have not fully developed the products and services that the Bank will initially
offer its customers and anticipate engaging in additional product research and
development during the 12-month period following the offering.




**FINANCIAL
RESUL** **T** **S**




For the
three-month period ended March 31, 2005, the Company generated a net loss of
$246,477. For the three-month period ended March 31, 2005, the primary expenses
were consulting fees ($26,017), payroll expense ($41,749), professional fees
($77,563) and regulatory application and filing fees ($12,920). Because the
Company is in the organizational stage, it has no operations from which to
generate revenues. The Company engaged in no material operations during the
three months ended March 31, 2004.




Initially,
the Bank anticipates deriving its revenues principally from interest charged on
loans and, to a lesser extent, from interest earned on investments, fees
received in connection with the origination of loans and other miscellaneous
fees and service charges. Its principal expenses are anticipated to be interest
expense on deposits and operating expenses. The funds for these activities are
anticipated to be provided principally by operating revenues, deposit growth,
purchases of federal funds from other banks, sale of loans and investment
securities, and partial or full repayment of loans by borrowers.




The
Bank’s operations will depend substantially on its net interest income, which is
the difference between the interest income earned on its loans and other assets
and the interest expense paid on its deposits and other borrowings. This
difference is largely affected by changes in market interest rates, credit
policies of monetary authorities, and other local, national or international
economic factors which are beyond the Bank’s ability to predict or control.
Large moves in interest rates may decrease or eliminate the Bank’s
profitability.




**FUNDING
OF OPERATIONS AND LIQUIDITY**




During
the organizational period, the Company’s cash requirements have consisted
principally of funding the Company’s pre-opening expenses, described above.
Through March 31, 2005, the primary sources of liquidity to meet current
obligations have been direct cash advances from the organizers and an extension
of credit in the amount of $600,000 from TIB, The Independent BankersBank, which
extension of credit has been guaranteed by the organizers. Under the line of
credit agreement with TIB, the final $200,000 draw will be accessible to the
Company when it attains subscriptions equal to 50% of the minimum offering
amount. Subsequent to March 31, 2005, Epic Realm, an entity affiliated with
several of the organizers, has agreed to lend the Company a total of $200,000 as
a bridge loan until the Company is able to draw on the final $200,000 under the
TIB line of credit. The Company will repay the outstanding balance on the TIB
line of credit by using a portion of the proceeds of its initial public
offering. The Company expects
that additional amounts will be required to complete the organizational phase
and expects to obtain an additional $450,000 working capital line of credit from
an entity owned and controlled by some of the members of the Seib family to
cover any remaining expenses.




Although
the Company has not received a binding commitment with respect to the
supplemental $450,000 working capital line of credit, its organizers believe
that the line of credit will be obtained on acceptable terms, based on informal
discussions with the lender. In the event that the Company obtains the
supplemental line of credit as expected, the Company believes that its liquidity
sources will be adequate to meet the obligations that it would expect to incur
following the receipt of preliminary regulatory approval and prior to the time
that the Bank opens for business.




If the
Company is unable to secure a line or other extensions of credit on terms
acceptable to it, it may be unable to fund the obligations through the end of
the organizational process, in which case the Company may be unable to complete
the organizational process. If the Company is unable to complete the
organizational process, the escrow agent would return any offering subscription
funds held in escrow with interest earned thereon and without deduction for
expenses.




-11-




The
Company believes that the proceeds to be raised during the initial public
offering will provide sufficient capital to support the growth of both the
Company and the Bank for their initial years of operations. The Company does not
anticipate that it will need to raise additional funds to meet expenditures
required to operate its business or that of the Bank over the initial 12 months
after a successful offering; all anticipated material expenditures during that
period are expected to be provided for out of the proceeds of the Company’s
initial public offering.




**CAPITAL
EXPENDITURES**




The
Company had not made any significant capital expenditures as of March 31,
2005.




**ITEM
3. CONTROLS AND PROCEDURES**




As of
March 31, 2005, we carried out an evaluation, under the supervision and with the
participation of our management, including our chief executive officer and chief
financial officer, of the effectiveness of the design and operation of our
“disclosure controls and procedures,” as such term is defined under Exchange Act
Rules 13a-15(e) and 15d-15(e).




Based on
this evaluation, our chief executive officer and chief financial officer
concluded that, as of March 31, 2005, such disclosure controls and procedures
were effective to ensure that information required to be disclosed by us in the
reports we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the SEC, and accumulated and communicated to our management, including our
chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure.




In
designing and evaluating the disclosure controls and procedures, our management
recognized that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives and in reaching a reasonable level of assurance our management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.




There
were no changes in our internal controls over financial reporting during the
quarter ended March 31, 2005 that materially affected, or are reasonably likely
to materially affect, our internal controls over financial
reporting.




**PART
II. OTHER INFORMATION**




**ITEM
1. LEGAL PROCEEDINGS.**




The
Company is not a party to any pending litigation.




**ITEM
2.** **UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**




On
February 14, 2005, the Securities and Exchange Commission declared effective our
Registration Statement on Form SB-2 (File No. 333-120681) related to our initial
public offering of our common stock, $0.01 par value.  We are offering for
sale a minimum of 1,240,000 and a maximum of 1,500,000 shares of our common
stock at a price of $10.00 per share to raise the money to organize Sunbelt
Bank. We registered a total of 2,100,000 shares of our common stock, of which
510,000 shares are issuable under registered common stock warrants (warrants to
purchase an aggregate of 300,000 shares of common stock at an exercise price of
$12.50 per share issued to the initial shareholders of the Company in connection
with the offering, and warrants to purchase an aggregate of 210,000 shares of
common stock at an exercise price of $10.00 per share issued to the organizers
of the Company).   We expect the offering to end on June 30,
2005. However, we may, in our sole discretion, end the offering prior to
June 30, 2005 or extend it for additional periods, but not beyond
December 31, 2005. As of May 16, 2005, subscription funds in the amount of
approximately $492,500 have been received into escrow for the purchase of shares
pursuant to the offering.




-12-




As of
March 31, 2005, the Company had incurred approximately $64,000 in offering
expenses since the effective date, none of which was paid to directors,
officers, ten percent or greater shareholders, any of their associates, or
affiliates of the Company. None of those expenses were paid to underwriters or
for underwriting discounts and commissions or finders’ fees.




We
anticipate that the gross proceeds of our offering will be a minimum of
$12,400,000 and a maximum of $15,000,000. The following tables summarize the
anticipated use of the proceeds by the Company and the Bank, respectively, based
on the sale of the minimum and maximum number of shares being offered, as well
as the midpoint of the offering. These figures are estimates based on
information currently available. Accordingly, actual results may vary.




**Sunbelt
Bancshares**




**Minimum
      offering**
    
    
    
    **Midpoint
      offering**
    
    
    
    **Maximum
      offering**Gross
      proceeds from offering
    
    $
    12,400,000
    
    
    100.0
    %
    
    
    $
    13,500,000
    
    
    100.0
    %
    
    
    $
    15,000,000
    
    
    100.0
    %Organizational
      and pre-opening exp.
    
    $
    (1,763,982
    )
    
    14.2
    %
    
    
    $
    (1,763,982
    )
    
    13.07
    %
    
    
    $
    (1,763,982
    )
    
    11.8
    %Investment
      in Bank stock
    
    $
    (10,636,018
    )
    
    85.8
    %
    
    
    $
    (11,736,018
    )
    
    86.93
    %
    
    
    $
    (13,236,018
    )
    
    88.2
    %Remaining
      proceeds
    
    $
    0
    
    
    0.0
    %
    
    
    $
    0
    
    
    0.00
    %
    
    
    $
    0
    
    
    0.0
    %


We have
funded the organizational and other pre-opening expenses described in the table
above from cash advances made by our organizers and from draws under a
pre-opening lines of credit extended to us by TIB. These amounts will be repaid
from the proceeds of the offering unless we are unable to sell at least
1,240,000 shares of common stock or fail to receive all regulatory approvals
required to organize the Bank, in which case our organizers will bear the risk
of loss with respect to the direct cash advances and may be pursued by the
lending bank with respect to any funds advanced under the pre-opening lines of
credit.




As shown,
we expect to use approximately $10.6 million to capitalize the Bank if we
sell 1,240,000 shares, approximately $11.7 million if we sell 1,350,000
shares and approximately $13.2 million if we sell 1,500,000 shares.
However, we reserve the right to retain a portion of the proceeds of the
offering at the Company level for general corporate purposes as long as we
contribute no less than $10.6 million to the Bank to fund its initial
capitalization.




-13-




**Sunbelt
Bank**




The
following table shows the anticipated use of the proceeds allocated to the Bank.
These proceeds will be in the form of a capital injection from the Company.




**Minimum
      offering**
    
    
    
    **Midpoint
      offering**
    
    
    
    **Maximum
      offering**Capital
      injection
    
    $
    10,636,018
    
    
    100.0
    %
    
    
    $
    11,736,018
    
    
    100.0
    %
    
    
    $
    13,236,018
    
    
    100.0
    %Furniture,
      fixtures and equipment
    
    $
    (585,400
    )
    
    5.5
    %
    
    
    $
    (585,400
    )
    
    5.0
    %
    
    
    $
    (585,400
    )
    
    4.4
    %Loans
      to customers, investment and other general purposes
    
    $
    (10,050,618
    )
    
    94.5
    %
    
    
    $
    (11,150,618
    )
    
    95.0
    %
    
    
    $
    (12,650,618
    )
    
    95.6
    %Remaining
      proceeds
    
    $
    0
    
    
    0.0
    %
    
    
    $
    0
    
    
    0.0
    %
    
    
    $
    0
    
    
    0.0
    %




**ITEM
3. DEFAULTS UPON SENIOR SECURITIES.**




This item
is not applicable.




**ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**




No
matters were submitted to a vote of the shareholders of the Company during the
three months ended March 31, 2005.




**ITEM
5. OTHER INFORMATION.**




This item
is not applicable.




**ITEM
6. EXHIBITS AND REPORTS ON FORM 8-K.**




**Exhibit
      Number**
    
    **Description
      of Exhibit**31.1
    
    Rule
      13a-14(a) Certification of Chief Executive Officer.31.2
    
    Rule
      13a-14(a) Certification of Chief Financial Officer.32
    
    Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.










-14-





**SIGNATURES**





Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.







SUNBELT
BANCSHARES, INC.


Date: May
20, 2005




By:  /s/ Jerry
Burnett


Jerry
Burnett


Chief
Executive Officer





Date: May
20, 2005


By:  /s/ Cindy
Swindle


Cindy
Swindle


Chief
Financial Officer
















-15-





**EXHIBIT
INDEX**





**Exhibit
      Number**
    
    **Description
      of Exhibit**31.1
    
    Certification
      pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange
      Act31.2
    
    Certification
      pursuant to Rules 13a-15(e) and 15d-15(e) of the Securities Exchange
      Act32
    
    Certification
      pursuant to Rules 13a-14(b) or Rule 15d-14(b) of the Securities Exchange
      Act and 18 U.S.C. §1350








-16-