<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 21, 1996
REGISTRATION NO. __________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CBES BANCORP, INC.
(Name of Small Business Issuer in Its Charter )
DELAWARE 6712 (TO BE APPLIED FOR)
(State or Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Industrial Classification Code Identification No.)
Organization) Number)
1001 N. JESSE JAMES ROAD
EXCELSIOR SPRINGS, MO 64024-1202
(816) 630-6711
(Address and Telephone Number
of Principal Executive Offices)
1001 N. JESSE JAMES ROAD
EXCELSIOR SPRINGS, MO 64024-1202
(Address of Principal Place of
Business or Intended Principal
Place of Business)
LARRY E. HERMRECK
1001 N. JESSE JAMES ROAD
EXCELSIOR SPRINGS, MO 64024-1202
(816) 630-6711
(Name, Address and Telephone Number
of Agent for Service)
COPIES TO:
ROBERT I. LIPSHER, ESQ.
ROBERT B. POMERENK, ESQ.
LUSE LEHMAN GORMAN POMERENK & SCHICK, P.C.
5335 WISCONSIN AVENUE, N.W.
SUITE 400
WASHINGTON, D.C. 20015
APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after
this registration statement becomes effective.
If this Form is filed to register additional shares for an offering pursuant to
Rule 462(b) under the Securities Act please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [_]
If the delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING REGISTRATION FEE
PRICE
(1)
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<S> <C> <C> <C> <C>
Common Stock, $.01 par value per share 1,388,625 $10.00 $13,886,250 $4,789
===================================================================================================================
</TABLE>
________________
(1) Estimated solely for the purpose of calculating the registration fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES
ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
================================================================================
<PAGE>
PROSPECTUS
CBES BANCORP, INC.
(PROPOSED HOLDING COMPANY FOR COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS
BANK)
Up to 1,207,500 Shares of Common Stock
(Anticipated Maximum)
CBES Bancorp, Inc. (the "Holding Company"), a Delaware corporation, is
offering up to 1,207,500 shares of its common stock, par value $.01 per share
(the "Common Stock"), in connection with the conversion of Community Bank of
Excelsior Springs, a Savings Bank ("Community Bank" or the "Bank"), from a
federally chartered mutual savings bank to a federally chartered stock savings
bank, and the issuance of all of Community Bank's outstanding capital stock to
the Holding Company pursuant to the Bank's Plan of Conversion (the "Plan" or
"Plan of Conversion"). The simultaneous conversion of the Bank to stock form,
the issuance of Community Bank's outstanding common stock to the Holding Company
and the Holding Company's sale of its Common Stock are referred to herein as the
"Conversion." References herein to the Bank refer to Community Bank both in its
mutual and stock form as the context may indicate.
(continued on following page)
FOR INFORMATION ON HOW TO SUBSCRIBE FOR SHARES OF COMMON STOCK, CALL THE STOCK
INFORMATION CENTER AT
(816) ________
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY EACH
PROSPECTIVE INVESTOR, SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, OR ANY OTHER FEDERAL
AGENCY OR ANY STATE SECURITIES COMMISSION, NOR HAS SUCH COMMISSION,
OFFICE OR OTHER AGENCY OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC"), THE BANK INSURANCE FUND ("BIF"), THE SAVINGS ASSOCIATION
INSURANCE FUND ("SAIF") OR ANY OTHER GOVERNMENT AGENCY.
<TABLE>
<CAPTION>
Estimated Underwriting Fees
and
Purchase Price(1) Other Expenses (2) Estimated Net Proceeds(2)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Minimum Per Share................ $10.00 $0.59 $9.41
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Midpoint Per Share............... $10.00 $0.50 $9.50
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Maximum Per Share................ $10.00 $0.43 $9.57
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Maximum Per Share, as adjusted(3) $10.00 $0.38 $9.62
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Total Minimum.................... $8,925,000 $525,000 $ 8,400,000
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Total Midpoint................... $10,500,000 $525,000 $ 9,975,000
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Total Maximum.................... 12,075,000 $525,000 $11,550,000
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Total Maximum, as adjusted(3).... $13,886,250 $525,000 $13,361,000
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(footnotes on second following page)
</TABLE>
TRIDENT SECURITIES, INC.
The date of this Prospectus is August ___, 1996.
<PAGE>
(continued from preceding page)
Non-transferable rights to subscribe for the Common Stock have been
granted, in order of priority, to (i) the Bank's deposit account holders with
deposits of at least $50 as of March 31, 1995 ("Eligible Account Holders"), (ii)
tax-qualified employee stock benefit plans of the Bank ("Tax Qualified Employee
Plans"), (iii) the Bank's deposit account holders with deposits of at least $50
as of June 30, 1996 ("Supplemental Eligible Account Holders") (iv) certain other
depositors as of _______ 1996 and certain borrowers of the Bank as of both
______, 1995 and ________, 1996, who continue to be borrowers as of the date of
the special meeting of members ("Other Members"), and (v) officers, directors
and employees of the Bank in a subscription offering (the "Subscription
Offering"). PURSUANT TO OFFICE OF THRIFT SUPERVISION ("OTS") REGULATIONS, THESE
SUBSCRIPTION RIGHTS ARE NON-TRANSFERABLE. PERSONS VIOLATING THIS PROHIBITION
AGAINST TRANSFER MAY LOSE THEIR RIGHT TO PURCHASE STOCK IN THE CONVERSION AND BE
SUBJECT TO OTHER POSSIBLE SANCTIONS. To the extent that shares remain available
for purchase after the Subscription Offering, the Holding Company and Bank
intend to offer shares of Common Stock for sale in a community offering to
members of the general public to whom a prospectus is delivered with a
preference given to natural persons residing in Clay and Ray Counties, Missouri
(the "Community Offering"). It is anticipated that shares of Common Stock not
subscribed for in the Subscription and Community Offerings may be offered at the
discretion of the Holding Company to certain members of the general public as
part of a community offering on a best efforts basis by a selling group of
broker-dealers managed by Trident Securities, Inc. (the "Syndicated Community
Offering"). The Subscription, Community and Syndicated Community Offerings are
referred to collectively as the "Offerings."
The Bank's Employee Stock Ownership Plan ("ESOP") intends to subscribe for
up to 8% of the total number of shares of Common Stock issued in the Conversion;
however, the Bank reserves the right to have all or part of the order of the
ESOP filled by purchases in the open market, subject to OTS approval, if
required. Shares sold above the maximum of the Estimated Valuation Range (as
hereinafter defined) may be sold to the ESOP to fill its subscription (prior to
filling any other orders). With the exception of the ESOP, no individual
Eligible Account Holder, Supplemental Eligible Account Holder or Other Member
may purchase in the Subscription Offering shares of Common Stock having an
aggregate purchase price of more than $100,000; no individual person or other
entity, together with associates of and persons acting in concert with such
person, may purchase in the Community Offering and the Syndicated Community
Offering shares of Common Stock having an aggregate purchase price of more than
$100,000; and no person, together with associates and persons acting in concert
with such person, may purchase in the aggregate shares of Common Stock having an
aggregate purchase price of more than $200,000. However, the Bank and the
Holding Company in their sole discretion may increase or decrease the purchase
limitations without notice of members or subscribers. The minimum purchase is 25
shares. See "The Conversion--Offering of Holding Company Common Stock--
Limitations on Purchase of Shares."
The Holding Company may, in its absolute discretion, accept or reject, in
whole or in part, any or all subscriptions in the Community Offering or
Syndicated Community Offering at the time of receipt of an order or as soon as
practicable following the completion of such offerings. All orders submitted are
irrevocable until completion of the Conversion. Subscriptions paid by cash,
check, bank draft or money order will be placed in a segregated account at
Community Bank and will earn interest at the rate of 2.25%, the rate currently
paid by Community Bank on passbook savings accounts, from the date of receipt
until completion or termination of the Conversion. Payments may be authorized by
withdrawal from deposit accounts at Community Bank without penalty and will
continue to earn interest at the contractual rate until the Conversion is
completed or terminated; these funds will be otherwise unavailable to the
depositor until such time. See "The Conversion-- Subscription Offering" and "--
Community Offering."
The Holding Company must receive an original stock order form (the "Stock
Order Form") (facsimile copies and photocopies will not be accepted) and a fully
executed separate Certificate Form together with full payment (or appropriate
instructions authorizing a withdrawal from a deposit account at the Bank) of
$10.00 per share for all shares for which subscription is made, at the executive
office of the Bank, 1001 N. Jesse James Road, Excelsior Springs, Missouri, by
3:00 p.m., Excelsior Springs, Missouri Time, on __________, 1996. Payment for
shares of Common Stock by wire transfer will not be accepted.
THE SUBSCRIPTION OFFERING WILL TERMINATE AT NOON, EXCELSIOR SPRINGS,
MISSOURI TIME, ON SEPTEMBER ___, 1996 (THE "EXPIRATION DATE"), unless extended
at the discretion of the Holding Company and the Bank without
<PAGE>
notice to subscribers, with the approval of the OTS, if necessary. The Community
Offering may commence simultaneously with, during, or following the completion
of the Subscription Offering and may terminate on the Expiration Date or any
date thereafter at the discretion of the Bank and the Holding Company but not
later than 45 days after the Expiration Date unless extended with the approval
of the OTS. The Syndicated Community Offering may commence subsequent to the
Subscription and Community Offerings and may terminate on any date at the
discretion of the Bank and the Holding Company but not later than 45 days after
the Expiration Date unless extended with the approval of the OTS.
If the Offerings are extended beyond 45 days after the Expiration Date
(i.e. ______, 1996), all subscribers will be notified of such extension, of
their rights to modify or confirm their subscriptions or to rescind their
subscriptions and have their subscription funds returned promptly with interest,
and of the time period within which the subscriber must notify the Bank of his
intention to modify, confirm or rescind his subscription. In the event the value
of an updated independent appraisal of the pro forma market value of the Common
Stock to be issued in the Conversion is less than $8,925,000 or more than
$13,886,250 and the Holding Company determines to sell an amount outside of this
range to its subscribers, all subscribers must be resolicited with an updated
prospectus. The failure of a subscriber to notify the Bank of his intention
during a resolicitation will be deemed a rescission of the subscription. Under
applicable OTS regulations, the Conversion must be completed or terminated no
later than 24 months from the approval of the Conversion by the Bank's members.
The Holding Company and the Bank have engaged Trident Securities, Inc.
("Trident Securities") to consult with and advise the Bank and the Holding
Company in connection with the Conversion and with the sale of shares of the
Common Stock in the Offerings. In addition, in the event the Common Stock is not
fully subscribed for in the Subscription and Community Offerings, Trident
Securities will manage the Syndicated Community Offering. Neither Trident
Securities nor any other broker-dealers will have any obligation to purchase or
accept any shares of Common Stock in the Conversion. See "The Conversion" and
"--Marketing Arrangements."
The Holding Company intends to have the Common Stock listed on the Nasdaq
SmallCap Market under the symbol "CBES," and the Holding Company has received
conditional approval for such a listing. Prior to this offering there has been
no public market for the Common Stock, and there can be no assurance that an
active and liquid trading market for the Common Stock will develop or, if
developed, be maintained. The lack of an active and liquid trading market may
adversely affect liquidity and the price for the Common Stock. See "Market for
Common Stock."
_____________________
(footnotes for preceding table)
(1) Determined in accordance with an independent appraisal prepared by RP
Financial, LC ("RP Financial") as of June 14, 1996. The estimated pro
forma market value of the Holding Company and the Bank, as converted,
ranges from $8,925,000 to $12,075,000 ("Estimated Valuation Range") or
between 892,500 and 1,207,500 shares of Common Stock at the purchase price
of $10.00 per share, which is the amount to be paid for each share of
Common Stock sold in the Offerings ("Purchase Price"). See "The Conversion
--Stock Pricing and Number of Shares to be Issued." THE VALUATION BY RP
FINANCIAL IS NOT INTENDED AND MUST NOT BE CONSTRUED AS A RECOMMENDATION OF
ANY KIND AS TO THE ADVISABILITY OF VOTING TO APPROVE THE CONVERSION OR OF
PURCHASING SHARES OF COMMON STOCK. MOREOVER, BECAUSE THE VALUATION IS
NECESSARILY BASED UPON ESTIMATES OF AND PROJECTIONS AS TO A NUMBER OF
MATTERS (INCLUDING CERTAIN ASSUMPTIONS AS TO EXPENSE FACTORS AFFECTING THE
NET PROCEEDS FROM THE SALE OF COMMON STOCK IN THE CONVERSION AND AS TO THE
NET EARNINGS ON SUCH NET PROCEEDS), ALL OF WHICH ARE SUBJECT TO CHANGE FROM
TIME TO TIME, NO ASSURANCE CAN BE GIVEN THAT PERSONS WHO PURCHASE SUCH
SHARES IN THE CONVERSION WILL BE ABLE TO SELL SUCH SHARES THEREAFTER AT OR
ABOVE THE PURCHASE PRICE.
(2) Consists of the estimated expenses of $525,000, which includes, among other
things, printing, postage, legal, accounting, appraisal and filing fees.
These expenses also include financial advisory and marketing fees to be
paid to Trident Securities of $150,000. Such fees may be deemed to be
underwriting fees, and Trident Securities may be deemed to be an
underwriter. Actual expenses and, thus, net proceeds, may be more or less
than estimated amounts. The Holding Company and the Bank have agreed to
indemnify Trident Securities against certain liabilities, including
liabilities that may arise under the Securities Act of 1933 (the
"Securities Act"). See "Pro Forma Data" and "The Conversion--Marketing
Arrangements."
<PAGE>
(3) Gives effect to an increase in the number of shares sold which could occur
without a resolicitation of subscribers or any right of cancellation due to
an increase in the Estimated Valuation Range of up to 15% above the maximum
of the Estimated Valuation Range to reflect changes in market and financial
conditions following commencement of the Offerings or to fill in part or in
whole the order of the ESOP. See "The Conversion--Stock Pricing and Number
of Shares to be Issued."
<PAGE>
- --------------------------------------------------------------------------------
[GEOGRAPHIC MAP REPRESENTING
MARKET AREA APPEARS HERE]
THE BANK'S CONVERSION TO STOCK FORM IS CONTINGENT UPON THE APPROVAL OF THE PLAN
BY ITS MEMBERS AND THE SALE OF AT LEAST THE MINIMUM NUMBER OF SHARES OF COMMON
STOCK TO BE ISSUED PURSUANT TO THE PLAN OF CONVERSION.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following summary does not purport to be complete. It is qualified in
its entirety by the detailed information and Consolidated Financial Statements
and Notes thereto appearing elsewhere in this Prospectus. The purchase of Common
Stock is subject to certain risks. See "Risk Factors."
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
Community Bank is a federally chartered mutual savings bank headquartered
in Excelsior Springs, Missouri. Community Bank was originally chartered as a
Missouri savings and loan association in 1931 under the name Excelsior Springs
Savings and Loan Association. In 1991, the Bank changed its name to its current
form, and in 1995, the Bank amended its charter to become a federal mutual
savings bank. Its deposits are insured up to the maximum allowable amount by the
SAIF of the FDIC. Through its main office in Excelsior Springs and its branch
office in Kearney, Community Bank primarily serves communities located in Clay
and Ray Counties and to a lesser extent in surrounding counties in the State of
Missouri. At March 31, 1996, Community Bank had total assets of $86.2 million,
deposits of $67.9 million and total equity of $7.9 million.
Community Bank has been, and intends to continue to be, a community-
oriented financial institution offering selected financial services to meet the
needs of the communities it serves. The Bank attracts deposits from the general
public and historically has used such deposits, together with other funds,
primarily to originate one- to four-family residential mortgage loans,
construction and land loans for single-family residential properties, and
consumer loans consisting primarily of loans secured by automobiles. While the
Bank's primary business has been that of a traditional thrift institution,
originating loans in its primary market area for retention in its portfolio, the
Bank also has been an active participant in the secondary market, originating
residential mortgage loans for sale. At March 31, 1996, the Bank's total loan
portfolio was $86.0 million, of which 61.0% were one- to four-family residential
mortgage loans, 25.0% were construction and land loans (the vast majority of
which related to single-family residential properties), and 12.4% were consumer
loans. During the nine months ended March 31, 1996, the Bank originated $14.3
million of one-to four-family residential mortgage loans, of which $12.6
million, or 87.5%, were sold in the secondary market. See "Business - Lending
Activities." To a substantially lesser extent, the Bank invests in various
investment securities, including mortgage-backed securities.
Community Bank's executive office is located at 1001 North Jesse James
Road, Excelsior Springs, Missouri 64024. Its telephone number at that address is
(816) 630-6711.
4
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<PAGE>
- --------------------------------------------------------------------------------
CBES BANCORP, INC.
CBES Bancorp, Inc. was organized in June 1996 by Community Bank for the
purpose of acquiring all of the outstanding capital stock of Community Bank to
be issued in the Conversion. Immediately following the Conversion, the only
significant assets of the Holding Company will be the capital stock of the Bank,
the note evidencing its loan to fund the Bank's ESOP and approximately 50% of
the net proceeds from the Conversion (less the amount to fund the ESOP loan).
Upon Conversion, the Holding Company initially will be a unitary savings and
loan holding company. See "Regulation - Holding Company Regulation" and "Use of
Proceeds." The business of the Holding Company initially will consist only of
the business of Community Bank. The Holding Company has not engaged and, prior
to the Conversion, will not engage in any material operations. See "CBES
Bancorp, Inc."
THE CONVERSION
The Offerings are being made in connection with the Conversion of Community
Bank from a federally chartered mutual savings bank to a federally chartered
stock savings bank and the formation of CBES Bancorp, Inc. as the holding
company of the Bank. The Holding Company will retain up to 50% of the net
proceeds of the issuance of the Common Stock and will use the remaining 50% of
the net proceeds to purchase all of the stock of Community Bank issued in the
Conversion. Net Conversion proceeds will increase the capital of the Bank and,
consistent with regulatory restrictions, will support the Bank's lending and
investment activities. The conversion to stock form and the use of a holding
company structure are also expected to enhance the ability of the Bank to expand
through possible mergers and acquisitions and facilitate future access to the
capital markets. The Holding Company will have additional authorized shares of
common stock and serial preferred stock available for issuance to raise
additional equity capital for future acquisitions or for other business
purposes, although the Holding Company has no specific plans for expansion and
no present plans for the issuance of such securities. See "Use of Proceeds" and
"Description of Capital Stock - Holding Company Capital Stock."
The Conversion is subject to certain conditions, including the prior
approval of the Plan of Conversion by the Bank's members at a special meeting to
be held at __:__ __.m., Excelsior Springs, Missouri Time on ____________, 1996
(the "Special Meeting"). Approval of the Plan requires the affirmative vote of
members of the Bank holding not less than a majority of the total number of
votes eligible to be cast at the Special Meeting. AFTER THE CONVERSION,
DEPOSITORS AND BORROWERS OF THE BANK WILL HAVE NO VOTING RIGHTS IN THE HOLDING
COMPANY, UNLESS THEY BECOME HOLDING COMPANY STOCKHOLDERS. Eligible Account
Holders and Supplemental Eligible Account Holders, however, will have certain
liquidation rights in the Bank. See "The Conversion - Effects of Conversion to
Stock Form on Depositors and Borrowers of the Bank - Liquidation Rights."
SUBSCRIPTION, COMMUNITY AND SYNDICATED COMMUNITY OFFERINGS. The
Holding Company is offering up to _______ shares of Common Stock, at a price of
$10.00 per share, in the Subscription, Community and Syndicated Community
Offerings. The shares of Common Stock to be issued in the Conversion are being
offered in the following order of priority: (1) Eligible Account Holders
(deposit account holders of the Bank with an account balance of $50 or more as
of March 31, 1995); (2) Tax-Qualified Employee Plans; (3) Supplemental Eligible
Account Holders (deposit account holders of the Bank with an account balance of
$50 or more as of June 30, 1996); (4) Other Members (deposit account holders of
the Bank as of _________ __, 1996, other than Eligible Account Holders or
Supplemental Eligible Account Holders, and certain borrowers as of both
__________ __, 1995 and ________________, 1996, who continue to be borrowers as
of the date of the Special Meeting); and (5) employees, officers and directors
of the Bank. In addition, the Tax-Qualified Employee Plans shall have first
priority Subscription Rights to the extent that the total number of shares of
Common Stock sold in the Conversion exceeds the maximum of the Estimated
Valuation Range. Concurrently with, during, or following the Subscription
Offering, and subject to the prior rights of holders of Subscription Rights, any
shares of Common Stock not subscribed for in the Subscription Offering are being
offered in the Community Offering to certain members of the general public, to
whom a prospectus is delivered, with a preference given to natural persons
residing in Clay and Ray Counties, Missouri. The determination as to the
residency of these subscribers in the Community Offering shall be made by the
Bank in its sole discretion based upon its books and records. See "The
Conversion." THE HOLDING COMPANY AND THE BANK RESERVE THE ABSOLUTE RIGHT TO
ACCEPT OR REJECT ANY ORDERS IN THE COMMUNITY OFFERING,
5
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<PAGE>
- --------------------------------------------------------------------------------
IN WHOLE OR IN PART, EITHER AT THE TIME OF RECEIPT OF AN ORDER OR AS SOON AS
PRACTICABLE FOLLOWING THE EXPIRATION DATE.
It is anticipated that shares of Common Stock not otherwise subscribed for
in the Subscription Offering and Community Offering, if any, may be offered at
the discretion of the Holding Company to certain members of the general public
as part of a Syndicated Community Offering on a best efforts basis by a selling
group of selected broker-dealers to be managed by Trident Securities. See "The
Conversion--Offering of Holding Company Common Stock."
The Plan of Conversion places limitations on the number of shares that may
be purchased in the Conversion by various categories of persons. Except for the
Tax-Qualified Employee Plans which intend to subscribe for 8% of the total
number of shares of Common Stock offered in the Conversion, no Eligible Account
Holder, Supplemental Eligible Account Holder or Other Member may purchase in
their capacity as such in the Subscription Offering shares of Common Stock
having an aggregate purchase price of more than $100,000; no individual person
or other entity, together with associates of and persons acting in concert with
such person, may purchase in the Community Offering and the Syndicated Community
Offering shares of Common Stock having an aggregate purchase price of more than
$100,000; and no person, together with associates of or persons acting in
concert with such person, may purchase shares of Common Stock having an
aggregate purchase price of more than $200,000. THE PURCHASE LIMITATIONS
DESCRIBED HEREIN ARE SUBJECT TO INCREASE OR DECREASE WITHIN THE SOLE DISCRETION
OF THE BANK AND THE HOLDING COMPANY. Further, to the extent that shares are
available, each subscriber must subscribe for a minimum of 25 shares. See "The
Conversion - Offering of Holding Company Common Stock." The Bank and the Holding
Company have engaged Trident Securities Inc. ("Trident Securities") to consult,
advise and assist in the distribution of shares of Common Stock in the Offerings
on a best efforts basis. Trident Securities is under no obligation to purchase
any of the Common Stock offered in the Conversion.
ALL SUBSCRIPTION RIGHTS FOR COMMON STOCK ARE NON-TRANSFERABLE AND WILL
EXPIRE AT __:__ __.M. EXCELSIOR SPRINGS, MISSOURI TIME ON ____________, 1996,
UNLESS THE SUBSCRIPTION OFFERING IS EXTENDED BY COMMUNITY BANK AND THE HOLDING
COMPANY. The accompanying stock order form and executed certification, together
with full payment for all shares of Common Stock for which subscription is made,
or appropriate instructions authorizing withdrawal of such amount from one or
more deposit accounts at the Bank, must be received by the Holding Company prior
to that time or any extension thereof. Under applicable federal regulations,
all shares of Common Stock must be sold in the Conversion within 45 days after
the completion of the Subscription Offering, unless extended with OTS approval.
If the Conversion is not approved by the members at the Special Meeting, no
shares will be issued, the Conversion will not take place, all subscription
funds received will be returned promptly with interest at the Bank's current
passbook rate, and all withdrawal authorizations will be terminated. If the
aggregate Purchase Price of the Common Stock actually sold in the Conversion is
below $8,925,000 or above $13,886,000 (15% above the maximum of the Estimated
Valuation Range), or if the Offerings are extended beyond ________________,
1996, subscribers will be permitted to modify or cancel their subscriptions and
to have their subscription funds returned promptly with interest. In the event
of such an extension, each subscriber will be notified in writing of the time
period within which the subscriber must notify the Bank of his intention to
maintain, modify or rescind his subscription. In the event the subscriber does
not respond in any manner to the Bank's notice, the funds submitted will be
refunded to the subscriber with interest at 2.25% per annum, the Bank's current
passbook rate, and/or the subscriber's withdrawal authorizations will be
terminated.
STOCK PRICING. The Purchase Price of the Common Stock in the Subscription,
Community and Syndicated Community Offerings is a uniform price for all
subscribers, including members of the Bank's board of directors (the "Board of
Directors") and management. The aggregate Purchase Price is based upon an
independent appraisal of the aggregate pro forma market value of the Holding
Company and the Bank as converted. The aggregate pro forma market value was
estimated by RP Financial, an experienced conversion appraisal firm independent
of the Bank, to range from $8,925,000 to $12,075,000 at June 14, 1996. Depending
upon the final updated valuation, the number of shares to be issued is subject
to a maximum of 1,388,600 shares (15% above the maximum of the
6
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<PAGE>
- --------------------------------------------------------------------------------
Estimated Valuation Range) and a minimum of 892,500 shares. THE APPRAISAL
SHOULD NOT BE CONSIDERED A RECOMMENDATION AS TO THE ADVISABILITY OF PURCHASING
SHARES OF THE COMMON STOCK. IN PREPARING THE APPRAISAL, RP FINANCIAL ASSUMED
THE ACCURACY AND COMPLETENESS OF THE FINANCIAL AND STATISTICAL INFORMATION
PROVIDED BY THE BANK AND DID NOT INDEPENDENTLY VALUE THE BANK'S ASSETS AND
LIABILITIES. The Board of Directors of the Holding Company and the Bank have
reviewed the appraisal of RP Financial and in determining the reasonableness and
adequacy of such appraisal consistent with OTS regulations and policies, have
reviewed the methodology and reasonableness of the assumptions utilized by RP
Financial in the preparation of such appraisal. See "The Conversion--Stock
Pricing and Number of Shares to be Issued" for a description of the manner in
which such valuation was made and the limitations on its use. Subject to
regulatory approval, the Estimated Valuation Range may be increased or decreased
to reflect market and financial conditions prior to the completion of the
Conversion and may be increased to permit an increase in the number of shares of
Common Stock sold in the Conversion to cover any oversubscriptions in the
Offerings. The actual number of shares to be issued in the Conversion will not
be determined until completion of the Offerings. No resolicitation of
subscribers will be made and subscribers will not be permitted to modify or
cancel their subscriptions unless the gross proceeds from the sale of the Common
Stock are below the minimum of the Estimated Valuation Range or more than 15%
above the maximum of the Estimated Valuation Range. See "The Conversion--Stock
Pricing and Number of Shares to be Issued."
The Estimated Valuation Range is necessarily based upon estimates of a
number of matters (including certain assumptions as to expense factors affecting
the net proceeds from the sale of Common Stock in the Conversion and as to the
net earnings on such net proceeds), all of which are subject to change from time
to time. As a result, no assurance can be given that persons who purchase such
shares in the Conversion will be able to sell such shares thereafter at or above
the Purchase Price.
NON-TRANSFERABILITY OF SUBSCRIPTION RIGHTS. Prior to the completion of the
Conversion, federal regulations prohibit any person from transferring or
entering into any agreement or understanding to transfer the legal or beneficial
ownership of the Subscription Rights issued under the Plan or the shares of
Common Stock to be issued upon their exercise. Persons violating such
prohibition may lose their right to purchase stock in the Conversion and may be
subject to sanctions by the OTS. Each person exercising Subscription Rights will
be required to certify that a purchase of Common Stock is solely for the
purchaser's own account and that there is no agreement or understanding
regarding the sale or transfer of such shares. See "The Conversion--Restrictions
on Transferability."
USE OF PROCEEDS
The net proceeds from the sale of Common Stock in the Conversion are
estimated to be approximately $8.4 million, $10.0 million, $11.6 million and
$13.4 million, respectively, based on the minimum, midpoint, maximum and 15%
above the maximum, of the Estimated Valuation Range. See "Pro Forma Data." The
Holding Company will purchase all of the common stock of the Bank to be issued
upon Conversion in exchange for 50% of the net proceeds from the issuance of the
Common Stock and will retain the remaining 50% of such net proceeds as its
initial capitalization (less funds loaned to the ESOP sufficient to purchase up
to 8% of shares sold in the Conversion). Subject to regulatory approval, the
Holding Company intends to lend a portion of the net proceeds to the ESOP to
facilitate its purchase of up to 8% of the Common Stock sold in the Conversion.
Based upon the issuance of shares at the minimum and maximum of the Estimated
Valuation Range, the loan to the ESOP to purchase 8% of the Common Stock would
be $714,000 and $966,000, respectively. The Bank intends to make contributions
to the ESOP in an amount to be determined by the Board of Directors, but not
less than the amount needed to pay any currently maturing obligations under the
loan made to the ESOP, subject to the Bank's continuing compliance with OTS
capital requirements. These contributions would be allocated among all eligible
participants in proportion to their compensation. It is expected the ESOP will
purchase up to 8% of the total number of shares sold in the Conversion. See
"Management--Benefit Plans--Employee Stock Ownership Plan." The remaining net
proceeds retained by the Holding Company are anticipated to be initially
invested in short- and intermediate-term securities and will be available as
general working capital. Subject to compliance with OTS regulations, such funds
may also be used to repurchase the Common Stock. However, since the Holding
Company has not yet issued stock, there is currently insufficient information
upon which an intention to repurchase stock could be based. For information
regarding the possible purchase of stock to implement a restricted stock plan
following the Conversion,
7
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see "Use of Proceeds." The net proceeds to the Bank will become part of the
Bank's general funds and will be used to support its lending and investment
activities, subject to applicable regulatory restrictions. A portion of the
proceeds may be used to repay a portion of the Bank's Federal Home Loan Bank
advances. On an interim basis, such proceeds will be invested primarily in
short- and intermediate-term securities and will be available as general working
capital.
PURCHASES BY DIRECTORS AND OFFICERS
The directors and officers of Community have indicated their intention to
purchase in the Conversion an aggregate of $1,100,000 of Common Stock (or
110,000 shares, or approximately 12.3%, 10.5%, 9.1%, or 7.9%, respectively, of
the shares to be issued in the Conversion at the minimum, the midpoint, the
maximum and 15% above the maximum of the Estimated Valuation Range). There is no
formal agreement among the executive officers and directors and their affiliates
regarding their purchases of Common Stock. In addition, 8% of the shares issued
in the Conversion are expected to be purchased by the Bank's ESOP. See
"Management - Benefit Plans - Employee Stock Ownership Plan" and "The
Conversion - Participation by Management."
BENEFITS OF CONVERSION TO DIRECTORS AND EXECUTIVE OFFICERS
EMPLOYMENT AGREEMENTS. The Board of Directors of the Bank intends to enter
into an employment agreement with each of Larry E. Hermreck, Chief Executive
Officer of the Bank and certain other officers of the Bank. See "Management--
Employment Agreements." It is anticipated that the agreement will be at Mr.
Hermreck's current salary and will become effective upon completion of the
Conversion. Under certain circumstances, including involuntary termination of
employment following a change in control, as defined in the employment
agreement, Mr. Hermreck will also be entitled to a severance payment equal to
299% of his base amount of compensation, as defined. Assuming a change in
control occurred as of March 31, 1996, Mr. Hermreck would have received
approximately $215,280 pursuant to the employment agreement's change in control
provision. See "Management--Employment Agreements" for a more detailed
description of this agreement and the other employment agreements to be entered
into with other officers of the Bank.
EMPLOYEE STOCK OWNERSHIP PLAN. The Board of Directors of the Bank has
adopted an ESOP, a tax-qualified employee benefit plan for officers and
employees of the Holding Company and the Bank. The ESOP intends to buy up to 8%
of the Common Stock issued in the Conversion (approximately $714,000 to $966,000
of the Common Stock based on the issuance of the minimum (892,500) shares) and
the maximum (1,207,500 shares) of the Estimated Valuation Range and the $10.00
per share Purchase Price). The ESOP will purchase the shares with funds
borrowed from the Holding Company, and it is anticipated that the ESOP will
repay the loans through periodic tax-deductible contributions from the Bank over
a ten-year period. These contributions will increase the compensation expense
of the Bank. The Bank's contributions to the ESOP will be allocated among
participants on the basis of their compensation. See "Management - Benefit
Plans - Employee Stock Ownership Plan" for a description of this plan.
OTHER STOCK BENEFIT PLANS. The Board of Directors of the Holding Company
intends to adopt a Stock Option and Incentive Plan ("Stock Option Plan") and a
Recognition and Retention Plan ("RRP") to become effective upon approval by
stockholders no earlier than six months following the Conversion. It is
anticipated that certain of the directors and executive officers of the Holding
Company and the Bank will receive awards under these plans. It is currently
anticipated that the Stock Option Plan and the RRP will be funded by shares
subsequently reacquired and held as treasury shares or through the issuance of
authorized but unissued stock of the Holding Company, representing 10% and 4%,
respectively, of the shares sold in the Conversion. To the extent the Stock
Option Plan and RRP are funded from authorized but unissued shares, the funding
of such plans will dilute existing shareholders by an aggregate of 12.9%. See
"Management - Benefit Plans" for a description of these plans. The Stock Option
Plan and the RRP may be submitted for stockholder approval at an annual or
special meeting of stockholders following the Conversion, provided such meeting
is at least six months following the Conversion, or alternatively such approval
may not be sought until after one year following the Conversion. If such plans
are adopted during
8
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<PAGE>
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the first year following Conversion, they would be subject to certain allocation
and other requirements of the OTS which might not apply after one year.
STOCK OPTION AND INCENTIVE PLAN. Specifically, it is intended that the
directors and executive officers will be granted options to purchase under the
Stock Option Plan, subject to approval by stockholders and OTS, and vesting
provisions, of up to 89,250 to 138,862 shares of Common Stock (based on the
minimum and 15% above the maximum of the Estimated Valuation Range,
respectively). Included in such totals is a proposed grant to Larry E. Hermreck,
Chief Executive Officer of the Bank, and all executive officers of the Bank as a
group (5 persons), of options to purchase 2.2% (19,635 to 30,550 shares at the
minimum and 15% above the maximum, respectively, of the Estimated Valuation
Range) and 5.5% (49,088 to 76,374 shares at the minimum and 15% above the
maximum, respectively, of the Estimated Valuation Range) of the Common Stock
sold in the Conversion, respectively. Also included in such totals is a proposed
grant to all directors of the Holding Company as a group (6 persons) of options
to purchase 3.0% (26,775 to 41,659 shares at the minimum and 15% above the
maximum, respectively, of the Estimated Valuation Range) of the Common Stock
sold in the Conversion. Under certain circumstances, such options may be
exercised and sold on the same day, thereby eliminating any risk to officers and
directors in exercising options in the event the market price exceeds the
exercise price. There is no risk to officers and directors in the event the
market price is less than the exercise price, since the holder may choose not to
exercise the options. See "Management - Benefits - Stock Option and Incentive
Plan" for additional information regarding the proposed Stock Option Plan.
RECOGNITION AND RETENTION PLAN. It is also intended that directors and
executive officers will be granted (without any requirement of payment by the
grantee) from 35,700 to 55,545 restricted shares of Common Stock under the RRP
(based on the minimum and 15% above the maximum of the Estimated Valuation
Range, respectively), subject to approval by the stockholders following the
Conversion, and vesting provisions, with a total value of approximately $357,000
to $555,450, respectively, based on the original Purchase Price of $10.00 per
share. Included in such totals is a proposed award of restricted stock to Larry
E. Hermreck, Chief Executive Officer of the Bank, equal to 0.88% of the Common
Stock sold in the Conversion, or 7,854 to 12,220 shares (based upon the minimum
and 15% above the maximum, respectively, of the Estimated Valuation Range), with
a total value of approximately $78,540 to $122,200, respectively, based on the
original Purchase Price of $10.00 per share, and a proposed award of restricted
stock to all executive officers as a group (5 persons), equal to 2.2% of the
Common Stock sold in the Conversion or 19,635 to 30,550 shares (based upon the
minimum and 15% above the maximum, respectively, of the Estimated Valuation
Range) with a total value of approximately $196,350 to $305,500, respectively,
based upon the original Purchase Price of $10.00 per share. In addition, such
totals include a proposed award of restricted stock to all directors of the
Holding Company as a group (6 persons) equal to 1.2% of the Common Stock sold in
the Conversion, or 10,710 to 16,664 shares (based upon the minimum and 15% above
the maximum, respectively, of the Estimated Valuation Range) with a total value
of approximately $107,100 to $166,640, respectively, based upon the original
Purchase Price of $10.00 per share. See "Management--Benefit Plans--Recognition
and Retention Plan" for additional information regarding the Recognition and
Retention Plan and the proposed awards of restricted stock.
DIVIDENDS
Although no decision has been made yet regarding the payment of dividends,
the Holding Company may consider a policy of paying cash dividends on the Common
Stock following the Conversion. Dividends, when and if paid, will be subject to
determination and declaration by the Board of Directors in its discretion, which
will take into account the Holding Company's consolidated financial condition
and results of operations, tax considerations, industry standards, economic
conditions, regulatory restrictions on dividend payments by the Bank to the
Holding Company, general business practices and other factors. See "Dividends,"
"Regulation--Regulatory Capital Requirements" and "--Limitations on Dividends
and Other Capital Distributions."
9
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MARKET FOR COMMON STOCK
The Holding Company has never issued capital stock to the public and,
consequently, there is no existing market for the Common Stock. Although the
Holding Company has received conditional approval to trade the Common Stock on
the Nasdaq SmallCap Market under the symbol "CBES," there can be no assurance
that the Holding Company will meet Nasdaq SmallCap Market listing requirements,
which include a minimum market capitalization, a minimum of 300 stockholders
immediately upon the closing of the Offerings and a minimum of two market makers
in the Common Stock. Trident Securities has indicated its intention to make a
market in the Common Stock upon consummation of the Conversion, and the Bank
anticipates that it will be able to secure at least one additional market maker
for the Common Stock although no additional market makers have been obtained as
of the date hereof. However, there can be no assurance that an active or liquid
trading market will develop, or that if a market develops, it will continue. A
public market having the desirable characteristics of depth, liquidity and
orderliness depends upon the presence in the marketplace of both willing buyers
and sellers of the Common Stock at any given time, which is not within the
control of the Holding Company or any market maker. Accordingly, there can be
no assurance that purchasers will be able to sell their shares at or above the
Purchase Price. See "Market for Common Stock."
RISK FACTORS
See "Risk Factors" for information regarding the Bank's emphasis on
construction and land lending, geographical concentration of loans, automobile
lending, the adequacy of the Bank's allowance for loan losses, the Bank's return
on equity ratios after the Conversion, interest rate risk exposure, takeover
defensive provisions, regulatory oversight, disparity between BIF and SAIF
insurance premiums, pending legislation regarding bad debt reserves,
competition, risk of delayed offering, absence of active market for the common
stock and possible consequences of amendment to plan of conversion, which
factors should be considered by prospective investors prior to investing in the
Common Stock.
10
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<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA
Set forth below are selected consolidated financial and other data of the
Bank at and for the periods indicated. Financial data as of March 31, 1996 and
for the nine months ended March 31, 1996 and 1995 are unaudited. In the opinion
of management, all adjustments (consisting only of normal recurring accruals)
necessary for a fair presentation have been included. The results of operations
and other data for the nine months ended March 31, 1996 are not necessarily
indicative of the results of operations that may be expected for the fiscal year
ending June 30, 1996. The selected consolidated financial and other data does
not purport to be complete and is qualified in its entirety by reference to the
detailed information and Consolidated Financial Statements and Notes thereto
presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
At March 31, At June 30,
1996 1995 1994
-------------- --------- ---------
(In Thousands)
<S> <C> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
Total assets................................. $ 86,168 $ 93,100 $ 68,543
Loans receivable, net (1).................... 77,273 78,880 53,453
Mortgage-backed securities, held to maturity 549 3,870 4,834
Investment securities, available for sale.... 1,981 3,041 3,032
Deposits..................................... 67,916 68,274 60,180
FHLB advances................................ 9,000 15,877 --
Total equity - substantially restricted...... 7,883 7,481 6,981
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
March 31, June 30,
---------------------- -----------------------
1996 1995 1995 1994
--------- --------- --------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Interest income.................................... $ 5,131 $ 4,127 $ 5,818 $ 4,655
Interest expense................................... 3,089 2,102 3,146 2,093
--------- --------- --------- ---------
Net interest income.............................. 2,042 2,025 2,672 2,562
Provision for loan losses.......................... 188 143 171 33
--------- --------- --------- ---------
Net interest income after provision for
loan losses.................................... 1,854 1,882 2,501 2,529
Fees and service charges........................... 218 198 267 266
Gain (loss) on sales of loans and mortgage-backed
and investment securities (2).................... 193 (309) (272) 4
Other noninterest income........................... 93 77 102 103
--------- --------- --------- ---------
Total noninterest income.................. 504 (34) 97 373
Total noninterest expense.......................... 1,761 1,609 2,133 1,849
--------- --------- --------- ---------
Earnings before income taxes....................... 597 239 465 1,053
Income taxes....................................... 207 211 301 352
--------- --------- --------- ---------
Net earnings....................................... $ 390 $ 28 $ 164 $ 701
========= ========= ========= =========
</TABLE>
__________________
(1) Loans receivable, net is comprised of total loans less allowance for loan
losses, deferred loan fees and the undisbursed portion of loans in process.
(2) Includes writedown of investment in mutual funds. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
11
<PAGE>
<TABLE>
<CAPTION>
At or For the At or For the
Nine Months Ended Year Ended
March 31, June 30,
------------------------ ---------------------
1996 1995 1995 1994
----------- ---------- --------- ----------
KEY FINANCIAL RATIOS AND OTHER DATA:(1).... (Dollars In Thousands)
<S> <C> <C> <C> <C>
Performance ratios:
Return on assets (2)........................................ 0.60% 0.05% 0.21% 1.04%
Return on total equity (3).................................. 6.74 0.52 2.27 10.52
Interest rate spread information:
Average during period..................................... 2.77 3.30 3.11 3.60
End of period............................................. 2.90 2.30 2.19 3.42
Net interest margin (4)..................................... 3.18 3.71 3.52 3.96
Ratio of noninterest expense to average total assets........ 2.62 2.84 2.70 2.75
Ratio of average interest-earning assets to average
interest-bearing liabilities.............................. 108.45 110.56 109.79 110.91
Asset quality ratios:
Non-performing assets to total assets at end of period (5).. 0.38 0.35 0.17 0.55
Allowance for loan losses to non-performing loans........... 109.46 96.70 150.67 57.80
Allowance for loan losses to loans receivable, net.......... 0.45 0.28 0.29 0.30
Net charge-offs during the period to average loans
outstanding during the period............................. 0.11 0.21 0.16 0.04
Capital ratios:
Total equity to total assets at end of period............... 9.15 8.04 10.18 8.50
Average total equity to average assets...................... 8.60 9.48 9.13 9.92
Other data:
Number of full-service offices.............................. 2 2 2 1
Loans serviced for others................................... $30,967 $24,339 $25,743 $25,581
</TABLE>
_______________
(1) Ratios for the nine month periods are annualized.
(2) Ratio of net earnings to average total assets.
(3) Ratio of net earnings to average total equity.
(4) Net interest earnings as a percentage of average interest-earning assets.
(5) Non-performing assets include non-accrual loans, foreclosed real estate and
other repossessed assets.
12
<PAGE>
RISK FACTORS
The following factors, in addition to those discussed elsewhere in this
Prospectus, should be considered by investors before deciding whether to
purchase the Common Stock offered in the Conversion.
CONSTRUCTION AND LAND LENDING
In response to the rapid growth in the Bank's primary market area, and
particularly the suburban Kansas City area, the Bank has invested a significant
proportion of its loan portfolio in construction and land loans for single-
family residential properties. At March 31, 1996, the Bank had $21.5 million in
construction and land loans, representing 25.0% of its total loan portfolio, as
compared to $18.2 million, or 21.3% of its total loan portfolio at June 30, 1995
and $8.4 million, or 14.5% of its total loan portfolio at June 30, 1994. At
March 31, 1996, the Bank had $17.9 million in construction loans, of which
approximately $12.3 million were "speculative" loans, meaning that, at the time
the loan was made, generally there was no sale contract or permanent loan in
place for the finished home. Although construction and land loans afford the
Bank the opportunity to achieve higher interest rates and fees with shorter
terms to maturity than do its one- to four-family permanent mortgage loans, such
loans are generally considered to involve a higher degree of risk than one- to
four-family permanent mortgage loans due to (i) the concentration of principal
among relatively few borrowers, (ii) the increased difficulty at the time the
loan is made of estimating the building costs and selling price of the residence
to be built, (iii) the increased difficulty and costs of monitoring the loan,
(iv) the higher degree of risk associated with residential sales activity in
changing real estate market conditions, and (v) the increased difficulty of
working out problem loans. Speculative construction loans have the added risk
associated with identifying an end-purchaser for the finished home.
The Bank's portfolio of construction and land loans exhibits several of
these risk characteristics. At March 31, 1996, the Bank's construction loans
were concentrated among approximately 45 builders. At that time, the Bank had
two borrowers where aggregate speculative construction loans outstanding
exceeded $1.0 million. Additionally, a majority of the Bank's construction
loans are secured by properties located in the suburban Kansas City area. A
concentration of loans secured by properties in any single area presents the
risk that any adverse change in regional economic or employment conditions may
result in increased delinquencies and loan losses. Construction loans are also
more difficult to evaluate than are permanent loans. At the time the loan is
made, the value of the collateral securing the loan must be estimated on the
basis of a projected selling price at the time the residence is completed,
typically six to 12 months later, and of estimated building and other costs
(including interest costs). Changes in the demand for new housing in the area
and higher-than-anticipated building costs may cause actual results to vary
significantly from those estimated. Accordingly, the Bank may be confronted, at
the time the residence is completed, with a loan balance exceeding the value of
the collateral. Because construction loans require active monitoring of the
building process, including cost comparisons and on-site inspections, these
loans are more difficult and costly to monitor. Increases in market rates of
interest may have a more pronounced effect on construction loans by rapidly
increasing the end-purchasers' borrowing costs, thereby reducing the overall
demand for new housing. Additionally, working out of problem construction loans
is complicated by the fact that in-process homes are difficult to sell and
typically must be completed in order to be successfully sold. This may require
the Bank to advance additional funds and/or contract with another builder to
complete the residence.
The Bank has sought to address the foregoing risks of its construction
lending by developing and strictly adhering to underwriting policies,
disbursement procedures, and monitoring practices. Specifically, the Bank (i)
seeks to lend to builders with which the Bank has a long-standing history of
satisfactory performance, (ii) limits the exposure to new builders until a
satisfactory record of performance is demonstrated, (iii) seeks to diversify
loans among several development projects, (iv) evaluates and documents the
creditworthiness of the borrower and the viability of the proposed project, (v)
limits loan-to-value ratios to specified levels on the basis of loan size and
risk characteristics of the borrower and the proposed project, (vi) controls the
disbursements of construction loan proceeds on the basis of a comparison of
estimated costs versus actual costs and of on-site inspections by Bank
personnel, and (vii) monitors over time the accuracy of borrowers in estimating
their building costs and independent appraisers in estimating projected selling
prices.
13
<PAGE>
GEOGRAPHICAL CONCENTRATION OF LOANS
At March 31, 1996, virtually all of the Bank's real estate mortgage loans
were secured by properties located in the Bank's primary market area of Ray and
Clay Counties, and, to a lesser extent, surrounding counties in Missouri. While
the Bank currently believes that its loans are adequately secured or reserved
for, in the event that real estate prices in the Bank's market area
substantially weaken or economic conditions in Missouri deteriorate, reducing
the value of properties securing the Bank's loans, some borrowers may default
and the value of the real estate collateral may be insufficient to fully secure
the loan. In either event, the Bank may experience increased levels of
delinquencies and related losses having an adverse impact on net income.
AUTOMOBILE LENDING
At March 31, 1996, the Bank's automobile loan portfolio totaled $8.8
million, or 10.2% of the Bank's total loan portfolio. Automobile loans provide
for shorter terms and higher yields as compared to residential mortgage loans,
but generally carry higher risks of default. Moreover, automobile loans are
secured by assets that depreciate rapidly, and repossessed automobiles may not
provide an adequate source of repayment for the outstanding loan. Of the Bank's
automobile loan portfolio, $2.3 million, or 26.3%, consisted of "indirect"
automobile loans at March 31, 1996, for which applications are taken by
employees of automobile dealerships. However, such loans are made pursuant to
the Bank's "direct" automobile underwriting standards, and must be approved by a
Bank employee before disbursement of loan proceeds.
ALLOWANCE FOR LOAN LOSSES
At March 31, 1996, the Bank's allowance for loan losses was $347,000, or
0.45% of loans receivable, net. Although the allowance for loan losses is
maintained at a level which management considers adequate to provide for
potential loan losses, because future events affecting borrowers and loan
collateral cannot be predicted with any degree of certainty, there can be no
assurance that the Bank's allowance for loan losses will be adequate to absorb
all future loan losses. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Business--Lending Activities--
Construction and Land Lending," and "--Asset Quality."
RETURN ON EQUITY AFTER CONVERSION
Return on equity (net income for a given period divided by average equity
during that period) is a ratio used by many investors to compare the performance
of a particular financial institution to its peers. The Bank's return on equity
for the fiscal year ended June 30, 1995 was, and the Holding Company's post-
Conversion return on equity will be, less than the average return on equity for
publicly traded thrift institutions and their holding companies. See "Selected
Consolidated Financial Information" for numerical information regarding the
Bank's historical return on equity and "Capitalization" for a discussion of the
Holding Company's estimated pro forma consolidated capitalization as a result of
the Conversion. In addition, the expenses associated with the ESOP and the RRP
(see "Pro Forma Data"), along with other post-Conversion expenses, are expected
to contribute initially to reduced earnings levels. The Bank intends to deploy
the net proceeds of the Offerings to increase earnings per share and book value
per share, without assuming undue risk, with the goal of achieving a return on
equity comparable to the average for publicly traded thrift institutions and
their holding companies. This goal will likely take a number of years to
achieve and no assurances can be given that this goal can be attained.
Consequently, for the foreseeable future, investors should not expect a return
on equity that will meet or exceed the average return on equity for publicly
traded thrift institutions.
INTEREST RATE RISK EXPOSURE
The Bank's profitability, like that of most financial institutions, is
dependent to a large extent upon its net interest income, which is the
difference between its interest income on interest-earning assets, such as loans
and investments, and its interest expense on interest-bearing liabilities, such
as deposits and borrowings. Changes in the level of interest rates also affect
the amount of loans originated by the Bank and, thus, the amount of loan and
commitment fees, as well as the market value of the Bank's interest-earning
assets. Moreover, increases in interest rates also can result in
disintermediation, which is the flow of funds away from savings institutions
into direct
14
<PAGE>
investments, such as corporate securities and other investment vehicles, which,
because of the absence of federal insurance premiums, may yield higher rates of
return than those paid by savings institutions.
In addition, changes in interest rates also can affect the market value of
the Bank's interest-earning assets, which are comprised of fixed- and
adjustable-rate instruments with various terms to maturity. Generally, the
value of fixed-rate, longer-term instruments fluctuates inversely with changes
in interest rates. See "Business - Lending Activities - One- to Four-Family
Mortgage Loans." Increases in interest rates also can affect the type (fixed-
rate or adjustable-rate) and amount of loans originated by the Bank and the
average life of loans and securities, which can adversely impact the yields
earned on the Bank's loan and securities portfolio. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Asset/Liability Management."
The OTS utilizes a net market value methodology to measure the interest
rate risk exposure of savings associations. Effective March 31, 1995, for
purposes of calculating risk-based capital, institutions with more than normal
interest rate risk, as defined by OTS regulations, are required to make a
deduction from capital equal to 50% of their interest rate risk exposure
multiplied by the present value of their assets. Based upon this methodology,
at March 31, 1996, the Bank's interest rate risk exposure to a 200 basis point
increase in interest rates was considered "normal" under this regulation.
However, because the Bank has total assets of less than $300 million and risk-
based capital in excess of 12%, the Bank is exempt from this rule unless
otherwise notified by the OTS. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Asset/Liability Management."
TAKEOVER DEFENSIVE PROVISIONS
HOLDING COMPANY AND BANK GOVERNING INSTRUMENTS. Certain provisions of the
Holding Company's Certificate of Incorporation and Bylaws assist the Holding
Company in maintaining its status as an independent publicly owned corporation.
These provisions provide for, among other things, limiting voting rights of
beneficial owners of more than 10% of the Common Stock, staggered terms for
directors, noncumulative voting for directors, limits on the calling of special
meetings, a fair price/supermajority vote requirement for certain business
combinations and certain notice requirements. The 10% vote limitation would not
affect the ability of an individual who is not the beneficial owner of more than
10% of the Common Stock to solicit revocable proxies in a public solicitation
for proxies for a particular meeting of stockholders and to vote such proxies.
In addition, provisions in the Bank's federal stock Charter that have an anti-
takeover effect could also be applicable to changes in control of the Holding
Company as the sole shareholder of the Bank. The Bank's Charter includes a
provision applicable for five years which prohibits acquisitions and offers to
acquire, directly or indirectly, the beneficial ownership of more than 10% of
the Bank's securities. Any person violating this restriction may not vote the
Bank's securities in excess of 10%. Any or all of these provisions may
discourage potential proxy contests and other takeover attempts, particularly
those which have not been negotiated with the Board of Directors. In addition,
the Holding Company's Certificate of Incorporation also authorizes preferred
stock with terms to be established by the Board of Directors which may rank
prior to the Common Stock as to dividend rights, liquidation preferences, or
both, may have full or limited voting rights and may have a dilutive effect on
the ownership interests of holders of the Common Stock. The Board of Directors
of the Holding Company has the ability to waive certain restrictions on
acquisition, provided that the acquisition is approved in advance by a majority
of the disinterested Board of Directors. See "Restrictions on Acquisitions of
Stock and Related Takeover Defensive Provisions."
REGULATORY AND STATUTORY PROVISIONS. Federal regulations prohibit, for a
period of three years following the completion of the Conversion, any person
from offering to acquire or acquiring the beneficial ownership of more than 10%
of the stock of a converted savings institution or its holding company without
prior OTS approval. Federal law also requires OTS approval prior to the
acquisition of "control" (as defined in OTS regulations) of an insured
institution, including a holding company thereof. See "Restrictions on
Acquisitions of Stock and Related Takeover Defensive Provisions."
EMPLOYMENT AGREEMENTS AND OTHER BENEFIT PLANS; VOTING CONTROL OF DIRECTORS
AND OFFICERS AND POSSIBLE DILUTIVE EFFECTS. The employment agreements, the
proposed Stock Option Plan and the proposed RRP also contain provisions that
could have the effect of discouraging takeover attempts of the Holding Company.
15
<PAGE>
The Bank intends to enter into employment contracts with Chief Executive
Officer Larry E. Hermreck and three other executive officers. Each of these
employment agreements provide for a payment equal to 299% of the employee's base
compensation in the event that his or her employment is involuntarily terminated
as a result of a change in control of the Holding Company or the Bank. These
provisions may have the effect of increasing the cost of, and thereby
discouraging, a future attempt to takeover the Holding Company or the Bank.
Assuming involuntary termination of the employment of such employees occurred
following a change in control as of March 31, 1996, such employees would have
received approximately $586,318 in the aggregate pursuant to the employment
agreements' change in control provisions. See "Management--Employment
Agreements."
Additionally, if the Holding Company issues additional shares pursuant to
the proposed Stock Option Plan and RRP (as opposed to funding such plans with
shares subsequently reacquired and held as treasury shares) the percentage of
ownership of the Holding Company of those persons purchasing Common Stock in the
Conversion will be diluted. Assuming exercise of all options available under
the Stock Option Plan, the interest of stockholders will be diluted by
approximately 9.1%. The award of all shares available under the RRP will dilute
the interests of stockholders by approximately 3.8%. See "Pro Forma Data,"
"Management - Benefit Plans - Stock Option and Incentive Plan," and "-
Recognition and Retention Plan" and "Restrictions on Acquisitions of Stock and
Related Takeover Defensive Provisions." For financial accounting purposes,
certain incentive grants under the proposed RRP will result in the recording of
compensation expense over the period of vesting. See "Pro Forma Data."
The directors and officers of the Bank are anticipated to purchase an
aggregate of approximately $1,100,000 or approximately 9.1% of the shares
offered in the Conversion at the maximum of the Estimate Valuation Range, or
7.9% at 15% above the maximum of the Estimated Valuation Range, or 12.3% of the
shares offered in the Conversion at the minimum of the Estimated Valuation
Range. Directors and executive officers will also receive awards under the
proposed Stock Option Plan and the proposed RRP. Assuming the purchase of
$1,100,000 of Common Stock in the Conversion by directors and officers in the
aggregate (15 persons), the full vesting of the restricted stock to be awarded
under the proposed RRP and the exercise of all options to be awarded under the
proposed Stock Option Plan in connection with the Conversion, approval of the
Stock Option Plan and the RRP by the stockholders, and the acquisition by the
Holding Company of shares to fund such plans in open-market purchases, the
shares owned by the directors and executive officers in the aggregate would
amount from approximately 21.9% (at 15% above the maximum of the Estimated
Valuation Range) to 26.3% (at the minimum of the Estimated Valuation Range) of
the outstanding shares. In addition, the ESOP is expected to purchase 8% of the
shares sold in the Conversion. This stock ownership, if voted as a block, could
defeat takeover attempts favored by other stockholders. See "Management -
Benefit Plans - Employee Stock Ownership Plan."
REGULATORY OVERSIGHT
The Bank is subject to extensive regulation, supervision and examination by
the OTS as its chartering authority and primary federal regulator, and by the
FDIC, which insures its deposits up to applicable limits. The Bank is a member
of the Federal Home Loan Bank (the "FHLB") of Des Moines and is subject to
certain limited regulation by the Board of Governors of the Federal Reserve
System ("Federal Reserve Board"). As the savings and loan holding company of
the Bank, the Holding Company will be subject to regulation and oversight by the
OTS. See "Regulation." Such regulation and supervision governs the activities
in which an institution can engage and is intended primarily for the protection
of the insurance fund and depositors. Regulatory authorities have been granted
extensive discretion in connection with their supervisory and enforcement
activities which are intended to strengthen the financial condition of the
banking industry, including the imposition of restrictions on the operation of
an institution, the classification of assets by the institution and the adequacy
of an institution's allowance for losses on loans. See "Regulation - Federal
Regulation of Savings Associations" and "- Regulatory Capital Requirements."
Any change in such regulation and oversight, whether by the OTS, the FDIC or
Congress, could have a material impact on the Holding Company, the Bank and
their respective operations.
RECAPITALIZATION OF SAIF, DISPARITY BETWEEN BIF AND SAIF PREMIUMS
Deposits of the Bank are currently insured by the SAIF of the FDIC. The
FDIC also maintains another insurance fund, the Bank Insurance Fund, which
primarily insures commercial bank deposits. For the first three quarters of
1995, both SAIF member institutions and BIF member institutions paid deposit
insurance premiums
16
<PAGE>
based on a schedule of from $0.23 to $0.31 per $100 of deposits. Applicable law
requires that both the SAIF and BIF funds be recapitalized to a ratio of 1.25%
of reserves to deposits. The FDIC has announced that the BIF reached the
required reserve ratio during May 1995, but the SAIF is not expected, absent the
changes in law described below, to achieve that reserve ratio before 2002. The
SAIF reserves have not grown as quickly as the BIF reserves due to a number of
factors, including the fact that a significant portion of SAIF premiums have
been and are currently being used to make payments on bonds ("FICO bonds")
issued in the late 1980s by the Financing Corporation to recapitalize the now
defunct Federal Savings and Loan Insurance Corporation.
In August 1995, the FDIC issued final regulations to reduce the assessment
rates for the BIF. Under the revised assessment schedule, which became effective
on June 1, 1995, BIF-insured institutions paid an average of 0.045% of deposits,
with the new assessment rates ranging from 0.04% of deposits to 0.31% of
deposits. The FDIC refunded any assessments that it had collected during 1995 in
excess of those due under the revised schedule. On November 14, 1995, the FDIC
voted to reduce annual assessments to the legal minimum of $2,000, effective
January 1, 1996 for BIF-insured institutions except for institutions that were
not well-capitalized or were assigned to the higher supervisory risk categories.
The FDIC estimated that 92% of the BIF-insured institutions would pay only the
minimum annual assessment. SAIF-insured institutions will continue to pay
assessments at the current assessment rates until the SAIF attains the 1.25%
reserve ratio.
As a result of the BIF premium reduction, SAIF-insured institutions, such
as the Bank, are likely to be subject to a significant competitive disadvantage
relative to BIF-insured institutions, pending any legislative action to remedy
the disparity. The FDIC has recognized that the disparity may have adverse
consequences for SAIF members, including reduced earnings and an impaired
ability to raise funds in capital markets and to attract deposits. Further, it
is not currently known whether SAIF members will be required to pay higher
deposit insurance premiums in the future. In anticipation of the disparity in
BIF and SAIF premiums, the holding companies of several SAIF-insured
institutions have filed applications to charter separate national or state
commercial bank subsidiaries insured by the BIF, which are to be used to attract
and reduce those holding companies' SAIF-insured deposits and reduce their
overall liability for deposit insurance premiums. If this trend expands or
continues, it may result in a reduction in the number and size of OTS-regulated
thrifts, which may, in turn, result in increased OTS assessments for those
institutions that remain regulated by the OTS. It may also accelerate Congress'
consideration of the consolidation of the OTS into one of the other federal
banking regulators.
The proposed Balanced Budget Act of 1995 (the "Budget Act"), which was
vetoed by the President, included provisions that focused on a resolution of the
financial problems of the SAIF. Under the provisions of the Budget Act, all SAIF
member institutions would pay a special assessment to recapitalize the SAIF, and
the assessment base for the payments on the FICO bonds would be expanded to
include the deposits of both BIF- and SAIF-insured institutions. The amount of
the special assessment required to recapitalize the SAIF has been estimated to
be approximately 80 basis points of the SAIF-assessable deposits. This estimate
of the special SAIF assessment is less than the assessment of 85 to 90 basis
points that had been previously estimated. The special assessment would have
been imposed on the first business day of January 1, 1996, or on such other date
prescribed by the FDIC not later than 60 days after enactment of the Budget Act,
based on the amount of SAIF deposits on March 1, 1995. The Budget Act would have
also permitted BIF-insured institutions with deposits subject to SAIF
assessments to reduce such SAIF-deposits by 20% in computing those institutions'
special assessment. If an 85 or a 90 basis point assessment were assessed
against the Bank's deposits as of March 31, 1996, the Bank's aggregate special
SAIF assessment would be approximately $577,000 or $611,000, respectively, and
an assessment of 80 basis points would be $543,000. The Budget Act also would
have provided that the BIF could not assess regular insurance assessments when
it has a reserve ratio of 1.25% or more except on those of its member
institutions that have been found to have "moderately severe" or
"unsatisfactory" financial, operational, or compliance weaknesses.
The Budget Act also provided for the merger of the BIF and SAIF on January
1, 1998, with such merger being conditioned upon the prior elimination of the
thrift charter. Congressional leaders had also agreed that Congress should
consider and act upon separate legislation to eliminate the thrift charter as
early as possible in 1996. If adopted, such legislation would require that the
Bank, as a federal savings bank, convert to a bank charter. Such a requirement
to convert to a bank charter could cause the Association to lose the favorable
tax treatment for its bad debt reserves that it currently enjoys under section
59 of the Internal Revenue Code of 1986, as amended (the
17
<PAGE>
"Code") and to have all or part of its existing bad debt reserves recaptured
into income. The Bank's tax bad debt reserve totalled $1.7 million at March 31,
1996.
The above-described provisions of the Budget Act were not the basis for the
President's veto, and Congressional leaders have indicated that these provisions
will be the basis for future legislation to recapitalize the SAIF. If enacted by
Congress, such legislation would have the effect of reducing the capital of SAIF
member institutions by the after-tax cost of the special SAIF assessment, plus
any related additional tax liabilities. The legislation would also have the
effect of reducing any differential that may otherwise be required in the
assessment rates for the BIF and SAIF.
Management cannot predict whether the above legislation or any other
legislative proposal will be enacted as described above, or, if enacted, the
amount of any special SAIF assessment, whether ongoing SAIF premiums will be
reduced to a level equal to that of BIF premiums or whether, if thrifts are
required to convert to bank charters, there will be any relief from the
additional tax liabilities that would be incurred upon the recapture of their
bad debt reserves. It also cannot be predicted whether some other legislative
action will be taken to address the BIF/SAIF premium disparity and what
consequences such action could have for SAIF members. A significant increase in
SAIF insurance premiums, either absolutely or relatively to BIF premiums, a
significant one-time fee to recapitalize the SAIF or a significant tax liability
associated with the recapture of the bad debt reserve could have an adverse
effect on the operating expenses and results of operations of the Bank. See
"Regulation--Regulation of Federal Savings Associations" and "--Insurance of
Accounts and Regulation by the FDIC."
PENDING LEGISLATION REGARDING BAD DEBT RESERVES
Under section 593 of the Code, thrift institutions such as the Bank, which
meet certain definitional tests primarily relating to their assets and the
nature of their businesses, are permitted to establish a tax reserve for bad
debts and to make annual additions thereto, which additions may, within
specified limitations, be deducted in arriving at their taxable income. The
Bank's deduction with respect to "qualifying loans," which are generally loans
secured by certain interests in real property, may currently be computed using
an amount based on the Bank's actual loss experience (the "Experience Method"),
or a percentage equal to 8.0% of the Bank's taxable income (the "PTI Method"),
computed without regard to this deduction and with additional modifications and
reduced by the amount of any permitted addition to the non-qualifying reserve.
See "Regulation--Federal and State Taxation--Federal Taxation."
Under pending legislative proposals, the PTI Method would be repealed and
the Bank would be permitted to use only the Experience Method of computing
additions to its bad debt reserve. In addition, the Bank would be required to
recapture (i.e., take into income) over a multi-year period the excess of the
balance of its bad debt reserves as of September 30, 1996 over the greater of
(a) the balance of such reserves as of September 30, 1988 or (b) an amount that
would have been the balance of such reserves as of September 30, 1996 had the
Bank always computed the additions to its reserves using the experience method.
If the Bank were or becomes a "large bank," (i.e., if the basis of its assets
exceeds $500 million), which it now is not, it would be unable to make additions
to its tax bad debt reserve, would be permitted to deduct bad debts only as they
occur and would additionally be required to recapture over a multi-year period
the excess of the balance of its bad debt reserves as of September 30, 1996 over
the balance of such reserves as of September 30, 1988, or over a lesser amount
if the Bank's loan portfolio has decreased since September 30, 1988. However,
under the proposed legislation, such recapture requirements would be suspended
for each of two successive taxable years beginning October 1, 1997 if the
principle amount of residential loans made by the Bank during each such year is
not less than the average of the principal amounts of such loans made by the
Bank during its six taxable years preceding October 1, 1996. In calculating the
average principal amount of loans made each year, the years with the highest and
the lowest principal amount of loans may be eliminated from the calculation if
the Bank so elects. Similar consequences would result under present law if the
Bank later becomes a large bank and fails to satisfy the qualifying thrift
definitional test. However, under present law, the Bank would be required to
recapture its entire bad debt reserves and not only the excess over the
September 30, 1988 balance of its reserves, and there would be no two-year
suspension of the recapture. See "Regulation" and "Regulation--Federal and State
Taxation--Federal Taxation."
18
<PAGE>
COMPETITION
The Bank experiences strong competition in its local market area in both
originating loans and attracting deposits. This competition arises, with
respect to originating loans, from mortgage bankers and to a lesser extent from
commercial banks, savings institutions and credit unions, and with respect to
attracting deposits, from securities firms and mutual funds and from other
financial institutions in its market area. In Clay County alone, where the
Bank's two offices are located, there are 36 commercial banks, 44 credit unions
and ten savings associations, in addition to the Bank. See "Business--Lending
Activities" and "--Market Area and Competition."
RISK OF DELAYED OFFERING
The Subscription Offering will expire at noon, Excelsior Springs, Missouri
Time on ____________, 1996 unless extended by the Bank and the Holding Company.
If the Offerings are extended beyond __________, 1996, all subscribers will have
the right to modify or rescind their subscriptions and to have their
subscription funds returned with interest. There can be no assurance that the
Offerings will not be extended as set forth above.
A material delay in the completion of the sale of all unsubscribed shares
in the Community or Syndicated Community Offering may result in a significant
increase in the costs in completing the Conversion. Significant changes in the
Bank's operations and financial condition, the aggregate market value of the
shares to be issued in the Conversion and general market conditions may occur
during such material delay. In the event the Conversion is not consummated
within 24 months after the date of the Special Meeting, OTS regulations would
require the Bank to charge accrued Conversion costs to then-current period
operations. See "The Conversion - Risk of Delayed Offering."
ABSENCE OF ACTIVE MARKET FOR THE COMMON STOCK
The Holding Company, as a newly organized company, has never issued capital
stock. Consequently, there is not at this time any market for the Common Stock.
The Common Stock has received conditional approval for trading on the Nasdaq
SmallCap Market under the symbol "CBES." However, there can be no assurance
that the Bank will meet Nasdaq SmallCap Market listing requirements, which
include a minimum market capitalization, at least two market makers, and at
least 300 stockholders. The Holding Company will seek to encourage and assist
at least two market makers to make a market in the Common Stock upon
consummation of the Conversion. Trident Securities has indicated its intention
to make a market in the Common Stock, and the Bank anticipates that it will be
able to secure at least one additional market maker for the Common Stock.
However, there can be no assurance that market makers will be obtained, that an
active and liquid market for the Common Stock will develop or be maintained or
that resales of the Common Stock can be made at or above the Purchase Price.
See "Market for Common Stock."
POSSIBLE CONSEQUENCES OF AMENDMENT TO PLAN OF CONVERSION
The Plan of Conversion provides that, if deemed necessary or desirable by
the Boards of Directors of the Bank and the Holding Company, the Plan of
Conversion may be substantively amended (including an amendment to eliminate the
formation of the holding company as part of the Conversion) by a two-thirds vote
of the respective Boards of Directors of the Bank and the Holding Company, as a
result of comments from regulatory authorities or otherwise, at any time with
the concurrence of the OTS. Moreover, if the Plan of Conversion is amended,
subscriptions which have been received prior to such amendment will not be
refunded unless otherwise required by the OTS. If the Plan of Conversion is
amended in a manner that is deemed to be material to the subscribers by the
Holding Company, the Bank and the OTS, such subscriptions will be resolicited.
No such amendments are currently contemplated, although the Bank reserves the
right to increase or decrease purchase limitations. See "The Conversion -
Approval, Interpretation, Amendment and Termination."
19
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
Community Bank is a federally chartered mutual savings bank headquartered
in Excelsior Springs, Missouri. Community Bank was originally chartered as a
Missouri savings and loan association in 1931 under the name Excelsior Springs
Savings and Loan Association. In 1991, the Bank changed its name to its current
form, and in 1995, the Bank amended its charter to become a federal mutual
savings bank. Its deposits are insured up to the maximum allowable amount by
the SAIF of the FDIC. Through its main office in Excelsior Springs and its
branch office in Kearney, Community Bank primarily serves communities located in
Clay and Ray Counties and to a lesser extent in surrounding counties in the
State of Missouri. At March 31, 1996, Community Bank had total assets of $86.2
million, deposits of $67.9 million and total equity of $7.9 million.
Community Bank has been, and intends to continue to be, a community-
oriented financial institution offering selected financial services to meet the
needs of the communities it serves. The Bank attracts deposits from the general
public and historically has used such deposits, together with other funds,
primarily to originate one- to four-family residential mortgage loans,
construction and land loans for single-family residential properties, and
consumer loans consisting primarily of loans secured by automobiles. While the
Bank's primary business has been that of a traditional thrift institution,
originating loans in its primary market area for retention in its portfolio, the
Bank also has been an active participant in the secondary market, originating
residential mortgage loans for sale. At March 31, 1996, the Bank's total loan
portfolio was $86.0 million, of which 61.0% were one- to four-family residential
mortgage loans, 25.0% were construction and land loans (the vast majority of
which related to single-family residential properties), and 12.4% were consumer
loans. During the nine months ended March 31, 1996 and the fiscal year ended
June 30, 1995, the Bank originated and sold $12.6 million and $4.7 million,
respectively, of one-to four-family residential mortgage loans in the secondary
market. See "Business - Lending Activities."
To a substantially lesser extent, the Bank invests in various investment
securities, including mortgage-backed securities. The Bank utilizes such
investments primarily to provide and maintain liquidity within regulatory
guidelines, to maintain a balance of high quality, diversified investments to
reduce credit risk, and to absorb liquidity when loan demand is low and provide
liquidity when loan demand is high. See "Business - Investment Activities."
Community Bank's executive office is located at 1001 North Jesse James
Road, Excelsior Springs, Missouri 64024. Its telephone number at that address
is (816) 630-6711.
CBES BANCORP, INC.
CBES Bancorp, Inc. was organized in June 1996 by Community Bank for the
purpose of acquiring all of the outstanding capital stock of Community Bank to
be issued in the Conversion. Immediately following the Conversion, the only
significant assets of the Holding Company will be the capital stock of the Bank,
the note evidencing its loan to fund the Bank's ESOP and approximately 50% of
the net proceeds from the Conversion (less the amount to fund the ESOP loan).
Upon Conversion, the Holding Company initially will be a unitary savings and
loan holding company. See "Regulation - Holding Company Regulation" and "Use of
Proceeds." The business of the Holding Company initially will consist only of
the business of Community Bank. The Holding Company has not engaged and, prior
to the Conversion, will not engage in any material operations.
The initial activities of the Holding Company are anticipated to be funded
by such retained proceeds and the income thereon and dividends from Community
Bank, if any. See "Dividends," "Use of Proceeds," "Regulation - Holding Company
Regulation" and "Regulation - Federal and State Taxation." Thereafter,
activities of the Holding Company may also be funded through sales of additional
securities, through borrowings and through income generated by other activities
of the Holding Company. At this time, there are no plans regarding any other
activities.
The executive office of the Holding Company is located at 1001 North Jesse
James Road, Excelsior Springs, Missouri 64024. Its telephone number at that
address is (816) 630-6711.
20
<PAGE>
CAPITALIZATION
The table below sets forth the capitalization, including deposits and
borrowings, of Community Bank as of March 31, 1996 and the pro forma
capitalization of the Holding Company at the minimum, the midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, after giving effect to
the Conversion and based on other assumptions set forth in the table and under
the caption "Pro Forma Data."
<TABLE>
<CAPTION>
Holding Company - Pro Forma Based
Upon Sale at $10.00 Per Share
----------------------------------------------------------
Bank's 892,500 1,050,000 1,207,500 1,388,625
Historical Shares Shares Shares Shares
------------- ---------- ------------ ------------- ------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Deposits/(1)/...................................... $ 67,916 $ 67,916 $ 67,916 $ 67,916 $ 67,916
FHLB advances...................................... 9,000 9,000 9,000 9,000 9,000
-------- --------- -------- -------- --------
Total deposits and borrowings.................. $ 76,916 $ 76,916 $ 76,916 $ 76,916 $ 76,916
======== ========= ======== ======== ========
Capital stock:
Preferred Stock, $.01 par value per share:
authorized - 500,000 shares; assumed
outstanding - none.............................. $ -- $ -- $ -- $ -- $ --
Common Stock, $.01 par value per share:
authorized - 3,500,000 shares; shares to
be outstanding - as shown/(5)/.................. -- 9 11 12 14
Additional paid-in capital........................ -- 8,391 9,965 11,538 13,347
Less common shares acquired by:
ESOP/(3)/........................................ -- (714) (840) (966) (1,111)
RRP.............................................. -- (357) (420) (483) (555)
-------- --------- -------- -------- -------
Retained earnings, substantially restricted/(2)/.. 7,896 7,896 7,896 7,896 7,896
-------- --------- -------- -------- -------
Unrealized (losses) on available-for-sale
securities, net of tax.......................... (13) (13) (13) (13) (13)
Total stockholders' equity..................... $ 7,883 $ 15,212 $ 16,599 $ 17,984 $ 19,578
======== ========= ======== ======== ========
</TABLE>
_____________________________
/(1)/ No effect has been given to withdrawals from savings accounts for
the purpose of purchasing Common Stock in the Conversion. Any
such withdrawals will reduce pro forma deposits by the amount of
such withdrawals.
/(2)/ See Notes 10, 11 and 12 of the Notes to Consolidated Financial
Statements for information regarding restrictions on retained
income, "Dividends" and "Regulation - Limitations on Dividends
and Other Capital Distributions" regarding restrictions on future
dividend payments and "The Conversion - Effects of Conversion to
Stock Form on Depositors and Borrowers of the Bank" regarding the
liquidation account to be established upon Conversion. Does not
take into account Holding Company dividends, if any, which may be
paid subsequent to the Conversion. See "Dividends."
/(3)/ Assumes that 8% of the shares issued in the Conversion will be
acquired by the ESOP and that the ESOP will be funded by the
Holding Company. The Bank intends to make contributions to the
ESOP sufficient to service and ultimately retire its debt. Since
the Holding Company will finance the ESOP debt, the ESOP debt
will be eliminated through consolidation and no liability will be
reflected on the Holding Company's consolidated financial
statements. Accordingly, the amount of stock acquired by the ESOP
is shown in this table as a reduction of total stockholders'
equity. See "Management - Benefit Plans -Employee Stock Ownership
Plan."
/(4)/ While management does not currently intend to do so, following
OTS and stockholder approval, shares utilized to fund the RRP
could be obtained from newly issued shares. In the event RRP
shares are obtained from authorized but unissued shares, the
existing ownership of current stockholders would be diluted by
approximately 3.8%. However, there would be no impact on
stockholders' equity.
/(5)/ Does not reflect the shares of Common Stock that may be reserved
for issuance pursuant to the proposed Stock Option Plan and the
proposed RRP. See "Management--Benefit Plans."
21
<PAGE>
\\ PRO FORMA DATA
The following table sets forth the historical consolidated net earnings,
total equity and per share data of the Bank at and for the nine months ended
March 31, 1996 and at and for the year ended June 30, 1995, and after giving
effect to the Conversion, the pro forma consolidated net income, stockholders'
equity and per share data of the Holding Company at and for the same period. The
pro forma data is computed on the assumptions that (i) the specified number of
shares of Common Stock were sold at the beginning of the specified period and
yielded net proceeds to the Holding Company as indicated and (ii) such net
proceeds were invested by the Bank and the Holding Company at the beginning of
the period to yield a return of 5.38% and 5.63% for the nine months ended March
31, 1996 and the fiscal year ended June 30, 1995, respectively. The assumed
return is based on the yield on one-year U.S. Government securities at March 31,
1996 and June 30, 1995, respectively, which is deemed by management to more
accurately reflect pro forma reinvestment rates than the arithmetic average of
the Bank's weighted average yield on all interest-earning assets and the
weighted average rate paid on deposits. After adjusting for applicable federal
and state taxes totaling 40%, the after-tax yields were equal to 3.23% and 3.38%
for the nine months ended March 31, 1996 and the fiscal year ended June 30,
1995, respectively. The table also assumes that the proposed RRP awards equal to
4% of the shares sold in the Conversion were purchased by the RRP at $10.00 per
share in the open market and fixed expenses (including a management fee of
$150,000 payable to Trident Securities) were $525,000. No effect has been given
to the stock reserved for issuance under the Stock Option Plan. ACTUAL
CONVERSION EXPENSES MAY BE MORE OR LESS THAN THOSE ESTIMATED BECAUSE FEES PAID
MAY VARY DEPENDING UPON WHETHER SELECTED BROKER-DEALERS ARE USED, MARKET
CONDITIONS AND OTHER FACTORS. THE PRO FORMA NET EARNINGS AMOUNTS DERIVED FROM
THE ASSUMPTIONS SET FORTH HEREIN SHOULD NOT BE CONSIDERED INDICATIVE OF THE
ACTUAL RESULTS OF OPERATIONS OF THE HOLDING COMPANY THAT WOULD HAVE BEEN
ATTAINED FOR ANY PERIOD IF THE CONVERSION HAD BEEN ACTUALLY CONSUMMATED AT THE
BEGINNING OF SUCH PERIOD, AND THE ASSUMPTIONS REGARDING INVESTMENT YIELDS SHOULD
NOT BE CONSIDERED INDICATIVE OF THE ACTUAL YIELDS EXPECTED TO BE ACHIEVED DURING
ANY FUTURE PERIOD.
The total number of shares to be issued in the Conversion may be increased
or decreased to reflect changes in market and financial conditions prior to the
close of the Offerings. However, if the aggregate Purchase Price of the Common
Stock actually sold in the Conversion is below $8,925,000 or more than
$13,886,250 (15% above the maximum of the Estimated Valuation Range) subscribers
will be offered the opportunity to modify or cancel their subscriptions. See
"The Conversion - Stock Pricing and Number of Shares to be Issued." //
22
<PAGE>
<TABLE>
<CAPTION>
At or For the Nine Months Ended March 31, 1996
\\ -----------------------------------------------------------------------
892,500 1,050,000 1,207,500 1,388,625
Shares Shares Shares Shares
at $10.00 at $10.00 at $10.00 at $10.00
per Share per Share per Share per Share
(Minimum) (Midpoint) (Maximum) (Supermax)/(1)/
----------- ----------- ---------- -----------
(In thousands, except per share amount)
<S> <C> <C> <C> <C>
Gross proceeds......................................... $ 8,925 $ 10,500 $ 12,075 $ 13,886
Less estimated expenses................................ 525 525 525 525
-------- ---------- ---------- ----------
Estimated net Conversion proceeds..................... 8,400 9,975 11,550 13,361
Less Common Stock acquired by ESOP.................... (714) (840) (966) (1,111)
Less Common Stock acquired by RRP..................... (357) (420) (483) (555)
-------- ---------- ---------- ----------
Estimated net proceeds available for
investment.......................................... $ 7,329 $ 8,715 $ 10,101 $ 11,695
======== ========== ========== ==========
Consolidated net earnings:
Historical............................................ $ 390 $ 390 $ 390 $ 390
Pro forma adjustments:
Net earnings from proceeds/(2)/...................... 177 211 245 283
Less pro forma ESOP adjustment /(3)/................. (32) (38) (43) (50)
Less pro forma RRP adjustment /(4)/.................. (32) (38) (43) (50)
-------- ---------- ---------- ----------
Pro forma net earnings............................. $ 503 $ 525 $ 549 $ 573
======== ========== ========== ==========
Consolidated net earnings per share: /(5)(6)/
Historical............................................ $ 0.47 $ 0.40 $ 0.35 $ 0.30
Pro forma adjustments:
Net earnings from proceeds /(2)/..................... 0.22 0.22 0.22 0.23
Less pro forma ESOP adjustment /(3)/................. (0.04) (0.04) (0.04) (0.04)
Less pro forma RRP adjustment /(4)/.................. (0.04) (0.04) (0.04) (0.04)
-------- ---------- ---------- ----------
Pro forma earnings per share....................... $ 0.61 $ 0.54 $ 0.49 $ 0.45
======== ========== ========== ==========
Consolidated stockholders' equity (book value):/(7)/
Historical............................................ $ 7,883 $ 7,883 $ 7,883 $ 7,883
Estimated net Conversion proceeds..................... 8,400 9,975 11,550 13,361
Less Common Stock acquired by:
ESOP................................................. (714) (840) (966) (1,111)
RRP /(4)/............................................ (357) (420) (483) (555)
-------- ---------- ---------- ----------
Pro forma stockholders' equity..................... $ 15,212 $ 16,598 $ 17,984 $ 19,578
======== ========== ========== ==========
Consolidated stockholders' equity per share: /(6)(8)/
Historical............................................ $ 8.83 $ 7.51 $ 6.53 $ 5.68
Estimated net Conversion proceeds..................... 9.41 9.50 9.56 9.62
Less Common Stock acquired by:
ESOP................................................. (0.80) (0.80) (0.80) (0.80)
RRP /(4)/............................................ (0.40) (0.40) (0.40) (0.40)
-------- ---------- ---------- ----------
Pro forma stockholders' equity/(9)/................ $ 17.04 $ 15.81 $ 14.89 $ 14.10
======== ========== ========== ==========
Pro forma price to book value.......................... 58.69% 63.25% 67.16% 70.92%
======== ========== ========== ==========
Pro forma price to earnings (P/E ratio) /(10)/......... 12.30 13.89 15.31 16.67
======== ========== ========== ==========
Number of shares used in calculating
earnings per share.................................... 826,455 972,300 1,118,145 1,285,867
======== ========== ========== ==========
Number of shares used in calculating
equity per share...................................... 892,500 1,050,000 1,207,500 1,388,625
======== ========== ========== ==========
</TABLE>
(footnotes begin on second following page)\\
23
<PAGE>
<TABLE>
<CAPTION>
\\ At or For the Year Ended June 30, 1995
---------------------------------------------------------------------------
892,500 1,050,000 1,207,500 1,388,625
Shares Shares Shares Shares
at $10.00 at $10.00 at $10.00 at $10.00
per Share per Share per Share per Share
(Minimum) (Midpoint) (Maximum) (Supermax)/(1)/
----------- ----------- ---------- ----------
(In thousands, except per share amount)
<S> <C> <C> <C> <C>
Gross proceeds......................................... $ 8,925 $ 10,500 $ 12,075 $ 13,886
Less estimated expenses................................ 525 525 525 525
-------- ---------- ---------- ----------
Estimated net Conversion proceeds..................... 8,400 9,975 11,550 13,361
Less Common Stock acquired by ESOP.................... (714) (840) (966) (1,111)
Less Common Stock acquired by RRP..................... (357) (420) (483) (555)
-------- ---------- ---------- ----------
Estimated net proceeds available for
investment.......................................... $ 7,329 $ 8,715 $ 10,101 $ 11,695
======== ========== ========== ==========
Consolidated net earnings:
Historical............................................ $ 164 $ 164 $ 164 $ 164
Pro forma adjustments:
Net earnings from proceeds/(2)/...................... 248 294 341 395
Less pro forma ESOP adjustment /(3)/................. (43) (50) (58) (67)
Less pro forma RRP adjustment /(4)/.................. (43) (50) (58) (67)
-------- ---------- ---------- ----------
Pro forma net earnings............................. $ 326 $ 358 $ 389 $ 425
======== ========== ========== ==========
Consolidated net earnings per share: /(5)(6)/
Historical............................................ $ 0.20 $ 0.17 $ 0.15 $ 0.13
Pro forma adjustments:
Net earnings from proceeds /(2)/..................... 0.30 0.30 0.30 0.31
Less pro forma ESOP adjustment /(3)/................. (0.05) (0.05) (0.05) (0.05)
Less pro forma RRP adjustment /(4)/.................. (0.05) (0.05) (0.05) (0.05)
-------- ---------- ---------- ----------
Pro forma earnings per share....................... $ 0.40 $ 0.37 $ 0.35 $ 0.34
======== ========== ========== ==========
Consolidated stockholders' equity (book value):/(7)/
Historical............................................ $ 7,481 $ 7,481 $ 7,481 $ 7,481
Estimated net Conversion proceeds..................... 8,400 9,975 11,550 13,361
Less Common Stock acquired by:
ESOP................................................. (714) (840) (966) (1,111)
RRP /(4)/............................................ (357) (420) (483) (555)
-------- ---------- ---------- ----------
Pro forma stockholders' equity..................... $ 14,810 $ 16,196 $ 17,582 $ 19,176
======== ========== ========== ==========
Consolidated stockholders' equity per share: /(6)(8)/
Historical............................................ $ 8.38 $ 7.12 $ 6.20 $ 5.39
Estimated net Conversion proceeds..................... 9.41 9.50 9.57 9.62
Less Common Stock acquired by:
ESOP................................................. (0.80) (0.80) (0.80) (0.80)
RRP /(4)/............................................ (0.40) (0.40) (0.40) (0.40)
-------- ---------- ---------- ----------
Pro forma stockholders' equity per share/(9)/...... $ 16.59 $ 15.42 $ 14.57 $ 13.81
======== ========== ========== ==========
Pro forma price to book value.......................... 60.28% 64.85% 68.63% 72.41%
======== ========== ========== ==========
Pro forma price to earnings (P/E ratio) /(10)/......... 25.00 27.03 28.57 29.41
======== ========== ========== ==========
Number of shares used in calculating
earnings per share.................................... 828,240 974,400 1,120,560 1,288,644
Number of shares used in calculating ======== ========== ========== ==========
equity per share...................................... 892,500 1,050,000 1,207,500 1,388,625
======== ========== ========== ==========
</TABLE>
(footnotes begin on following page)\\
24
<PAGE>
\\_____________________
/(1)/ Gives effect to the sale of an additional 181,125 shares in the
Conversion, which may be issued as a result of an increase in the pro
forma market value of the Holding Company and the Bank as converted,
without the resolicitation of subscribers or any right of cancellation.
The issuance of such additional shares will be conditioned on a
determination of the independent appraiser that such issuance is
compatible with its determination of the estimated pro forma market value
of the Holding Company and the Bank as converted. See "The Conversion--
Stock Pricing and Number of Shares to be Issued."
/(2)/ No effect has been given to withdrawals from accounts for the purpose of
purchasing Common Stock in the Conversion.
/(3)/ It is assumed that 8% of the shares of Common Stock offered in the
Conversion will be purchased by the ESOP. The funds used to acquire such
shares will be borrowed by the ESOP (at an interest rate equal to the
prime rate as published in The Wall Street Journal on the closing date of
the Conversion, which rate is currently 8.25%), from the net proceeds
from the Conversion retained by the Holding Company. The amount of this
borrowing has been reflected as a reduction from gross proceeds to
determine estimated net proceeds. The Bank intends to make contributions
to the ESOP in amounts at least equal to the principal and interest
requirement of the debt. As the debt is paid down, stockholders' equity
will be increased. The Bank's payment of the ESOP debt is based upon
equal installments of principal over a 10-year period, assuming a
combined federal and state tax rate of 40%. Interest income earned by the
Holding Company on the ESOP debt offsets the interest paid by the Bank on
the ESOP loan. No reinvestment is assumed on proceeds contributed to fund
the ESOP. The ESOP expense reflects adoption of Statement of Position
("SOP") 93-6, which will require recognition of expense based upon shares
committed to be released and the exclusion of unallocated shares from
earnings per share computations. The valuation of shares committed to be
released would be based upon the average market value of the shares
during the year, which, for purposes of this calculation, was assumed to
be equal to the $10.00 per share Purchase Price. See "Management of the
Bank--Benefits--Employee Stock Ownership Plan. "
/(4)/ In calculating the pro forma effect of the RRP, it is assumed that the
required stockholder approval has been received, that the shares were
acquired by the RRP at the beginning of the period presented in open
market purchases at the Purchase Price and that 20% of the amount
contributed was an amortized expense during such period. The issuance of
authorized but unissued shares of the Common Stock instead of open market
purchases would dilute the voting interests of existing stockholders by
approximately 3.85% and pro forma net income per share would be $0.59,
$0.53, $0.48 and $0.44 for the nine months ended March 31, 1996 and
$0.39, $0.36, $0.35 and $0.33 for the fiscal year ended June 30, 1995 at
the minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range for the nine months ended March 31, 1996 and for the
fiscal year ended June 30, 1995, respectively, and pro forma
stockholders' equity per share would be $16.77, $15.58, $14.71 and $13.94
at March 31, 1996 and $16.34, $15.22, $14.39 and $13.63 at June 30, 1995
at the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range at March 31, 1996 and June 30, 1995,
respectively. Shares issued under the RRP vest 20% per year and, for
purposes of this table, compensation expense is recognized on a straight-
line basis over each vesting period. In the event the fair market value
per share is greater than $10.00 per share on the date of stockholder
approval of the RRP, total RRP expense would increase. No effect has been
given to the shares reserved for issuance under the proposed Stock Option
Plan. If stockholders approve the Stock Option Plan following the
Conversion, the Holding Company will have reserved for issuance under the
Stock Option Plan authorized but unissued shares of Common Stock
representing an amount of shares equal to 10% of the shares sold in the
Conversion. If all of the options were to be exercised utilizing these
authorized but unissued shares rather than treasury shares (which could
be acquired), the voting interests of existing stockholders would be
diluted by approximately 9.1%. See "Management of the Bank--Benefits--
1996 Stock Option Plan" and "--Management Recognition Plan."
/(5)/ Per share amounts are based upon shares outstanding of 826,455, 972,300,
1,118,145 and 1,285,867, and of 828,240, 974,400, 1,120,560 and 1,288,644
at the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range for the nine months ended March 31, 1996 and
the fiscal year ended June 30, 1995, respectively, which includes the
shares of Common Stock sold in the Conversion less the number of shares
assumed to be held by the ESOP not committed to be released within the
first two months and year, respectively, following the Conversion.
/(6)/ Historical per share amounts have been computed as if the shares of
Common Stock expected to be issued in the Conversion had been outstanding
at the beginning of the period or on the date shown, but without any
adjustment of historical net income or historical retained earnings to
reflect the investment of the estimated net proceeds of the sale of
shares in the Conversion, the additional ESOP expense or the proposed RRP
expense, as described above.
25
<PAGE>
/(7)/ "Book value" represents the difference between the stated amounts of the
Bank's assets and liabilities. The amounts shown do not reflect the
liquidation account that will be established for the benefit of Eligible
Account Holders and Supplemental Eligible Account Holders in the
Conversion, or the federal income tax consequences of the restoration to
income of the Bank's special bad debt reserves for income tax purposes,
which would be required in the unlikely event of liquidation. See "The
Conversion--Effects of Conversion to Stock Form on Depositors and
Borrowers of the Bank" and "Taxation." The amounts shown for book value
do not represent fair market values or amounts distributable to
stockholders in the unlikely event of liquidation.
/(8)/ Per share amounts are based upon shares outstanding of 892,500,
1,050,000, 1,207,500 and 1,388,625 at the minimum, midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, respectively.
/(9)/ Neither represents, nor is intended to represent, possible future price
appreciation or depreciation of the Common Stock.
/(10)/ Annualized.\\
26
<PAGE>
\\ PRO FORMA REGULATORY CAPITAL
Set forth below is a summary of the Bank's compliance with the
regulatory capital standards as of March 31, 1996, on an historical and a pro
forma basis assuming that the indicated number of shares were sold as of such
date.
<TABLE>
<CAPTION>
Pro Forma Based Upon Sale of
--------------------------------------------------------------
892,500 Shares 1,050,000 Shares
(Minimum of Estimated (Midpoint of Estimated
Historical Valuation Range) Valuation Range)
------------------------- ------------------------------ ------------------------------
Amount Percent/(1)/ Amount/(2)/ Percent/(1)(2)/ Amount/(2)/ Percent/(1)(2)/
---------- ------------- ------------ ---------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Capital under generally
accepted accounting
principles..................... $7,883 9.15% $11,012 12.23% $11,611 12.80%
====== ===== ======= ===== ======= =====
Tangible capital/(2)/........... $7,896 9.15% $11,025 12.23% $11,624 12.79%
Tangible capital
requirement/(5)/............... 1,295 1.50 1,353 1.50 1,364 1.50
------ ----- ------- ----- ------- -----
Excess........................ $6,601 7.65% $ 9,672 10.73% $10,260 11.29%
====== ===== ======= ===== ======= =====
Core capital/(2)/............... $7,896 9.15% $11,025 12.23% $11,624 12.79%
Core capital requirement/(3)(5)/ 2,591 3.00 2,705 3.00 2,727 3.00
------ ----- ------- ----- ------- -----
Excess........................ $5,305 6.15% $ 8,321 9.23% 8,896 9.79%
====== ===== ======= ===== ======= =====
Risk-based capital/(2)(4)/...... $7,725 12.04% $10,854 16.71% $11,453 17.60%
Risk-based capital
requirement/(5)(6)/............ 5,133 8.00 5,195 8.00 5,207 8.00
------ ----- ------- ----- ------- -----
Excess........................ $2,592 4.04% $ 5,659 8.71% $ 6,247 9.60%
====== ===== ======= ===== ======= =====
<CAPTION>
------------------------------------------------------------
1,388,625 Shares
1,207,500 Shares (15% Above the
(Maximum of Estimated Maximum of Estimated
Valuation Range) Valuation Range)
----------------------------- -----------------------------
Amount/(2)/ Percent/(1)(2)/ Amount/(2)/ Percent/(1)(2)/
----------- ---------------- ----------- ----------------
<S> <C> <C> <C> <C>
Capital under generally
accepted accounting
principles..................... $12,209 13.35% $12,897 13.97%
======= ===== ======= =====
Tangible capital/(2)/........... $12,222 13.34% $12,910 13.96%
Tangible capital
requirement/(5)/............... 1,374 1.50 1,387 1.50
------- ----- ------- -----
Excess........................ $10,848 11.84% $11,523 12.46%
======= ===== ======= =====
Core capital/(2)/............... $12,222 13.34% $12,910 13.96%
Core capital requirement/(3)(5)/ 2,749 3.00 2,774 3.00
------- ----- ------- -----
Excess........................ $ 9,473 10.34% $10,137 10.96%
======= ===== ======= =====
Risk-based capital/(2)(4)/...... $12,051 18.48% $12,739 19.48%
Risk-based capital
requirement/(5)(6)/............ 5,218 8.00 5,231 8.00
------- ----- ------- -----
Excess........................ $ 6,833 10.48% $ 7,508 11.48%
======= ===== ======= =====
</TABLE>
______________________
/(1)/ Tangible and core capital levels are shown as a percentage of total
adjusted assets; risk-based capital levels are shown as a percentage of
risk-weighted assets.
/(2)/ Assumes retention by the Holding Company of 50% of the net Conversion
proceeds (less the amount of the loan made to the ESOP from the Holding
Company's portion of the net Conversion proceeds). The remaining 50% of
the net Conversion proceeds will be provided to the Bank. For regulatory
capital purposes, the Bank's capital will be reduced by the anticipated
purchases by the ESOP of 8% of the shares of Common Stock sold in the
Conversion and the proposed issuance of 4% of the shares of Common Stock
sold in the Conversion for the RRP. For purposes of calculating
regulatory capital, the valuation allowance applicable to investment
securities in accordance with Statement of Financial Accounting Standards
("SFAS") No. 115 has been excluded from capital. See Note 11 of Notes to
Consolidated Financial Statements.
/(3)/ In April 1991, the OTS proposed a core capital requirement for savings
associations comparable to the requirement for national banks that became
effective December 31, 1990. The proposal calls for an OTS core capital
requirement of at least 3% of total adjusted assets for thrifts that
receive the highest supervisory rating for safety and soundness, with a
4% to 5% core capital requirement for all other thrifts. If adopted as
proposed, management would expect the Bank to be subject to a 4% to 5%
core capital requirement. See "Regulation - Regulatory Capital
Requirements."
/(4)/ Includes $347,000 of general valuation allowances which qualify as
supplementary capital. See "Regulation - Regulatory Capital
Requirements."
/(5)/ Assumes investment of net proceeds in U.S. Government agency securities
which have a 20% risk weight.
/(6)/ The OTS utilizes a net market value methodology to measure the interest
rate risk exposure of savings associations. Effective March 31, 1996,
institutions with more than normal interest rate risk, as defined by OTS
regulations, are required to make a deduction from capital equal to 50%
of its interest rate risk exposure multiplied by the present value of its
assets. Based upon this methodology, at March 31, 1996, the latest date
for which such information is available, the Bank's interest rate risk
exposure to a 200 basis point increase in interest rates was considered
"normal" under this regulation. However, since the Bank has assets of
less than $300 million and a total risk-based capital ratio in excess of
12%, it is exempt from this requirement unless the OTS determines
otherwise. See "Regulation - Regulatory Capital Requirements."
\\
27
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of Common Stock in the Conversion, based on
the minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range, are estimated at $8.4 million, $10.0 million, $11.6 million and
$13.4 million, respectively. See "Pro Forma Data." The Holding Company will
retain up to 50% of the net Conversion proceeds as its initial capitalization
and will use the balance of the net Conversion proceeds to purchase all of the
common stock of the Bank to be issued upon Conversion. The Holding Company
intends to lend a portion of the net proceeds retained by it to the ESOP to
facilitate its purchase of 8% of the Common Stock in the Conversion. Based upon
the issuance of shares at the minimum and maximum of the Estimated Valuation
Range, the loan to the ESOP to purchase 8% of the Common Stock would be $714,000
and $966,000, respectively. See "Management - Benefit Plans - Employee Stock
Ownership Plan." The remainder of the proceeds will be invested on an interim
basis in short- and intermediate-term securities. These funds would be available
for general corporate purposes which may include expansion of operations through
acquisitions of other financial service organizations and diversification into
other related or unrelated businesses, or for investment purposes. See
"Regulation - Holding Company Regulation" for a discussion of OTS activity
restrictions. Currently, there are no specific plans being considered for the
expansion of the business of the Holding Company. In addition, the funds may be
used to infuse additional capital to the Bank when and if appropriate.
The net proceeds retained by the Holding Company may also be used to
repurchase the Holding Company's Common Stock as permitted by the OTS. Upon
completion of the Conversion, the Board of Directors will have the authority to
adopt stock repurchase plans, subject to statutory and regulatory requirements.
Since the Holding Company has not yet issued stock, there is currently
insufficient information upon which an intention to repurchase stock could be
based.
Based upon facts and circumstances which may arise following Conversion,
the Board of Directors may determine to repurchase stock in the future. Such
facts and circumstances may include but are not limited to: (i) market and
economic factors such as the price at which the stock is trading in the market,
the volume of trading, the attractiveness of other investment alternatives in
terms of the rate of return and risk involved in the investment, the ability to
increase the book value or earnings per share of the remaining outstanding
shares, and the effect on the Holding Company's return on equity; (ii) the
avoidance of dilution to stockholders by not having to issue additional shares
to cover the exercise of stock options or to fund employee stock benefit plans;
and (iii) any other circumstances in which repurchases would be in the best
interests of the Holding Company and its shareholders.
Any stock repurchases will be subject to the determination of the Board of
Directors that both the Holding Company and the Bank will be capitalized in
excess of all applicable regulatory requirements after any such repurchases and
that capital will be adequate taking into account, among other things, the level
of non-performing assets and other loans of concern, the Holding Company's and
the Bank's current and projected results of operations and asset/liability
structure, the economic environment and tax and other regulatory considerations.
Subject to certain exceptions, no repurchases may be implemented within the
first year following Conversion pursuant to OTS regulations. A stock repurchase
program may have the effect of: (i) reducing the overall market value of the
Holding Company, (ii) increasing the cost of capital and (iii) promoting a
temporary demand for Common Stock.
Should the Holding Company implement a restricted stock plan (i.e., the
RRP) following the Conversion, a portion of the net proceeds may be used to fund
the purchase by the plan of Common Stock in an amount up to 4% of the shares
sold in the Conversion. The actual cost of such purchase will depend on the
number of shares sold in the Conversion and the market price at the time of
purchase. Based upon the minimum and the maximum of the Estimated Valuation
Range and on a $10.00 per share purchase price, the cost would be approximately
$357,000 and $483,000, respectively.
The net proceeds from the sale of the Common Stock in the Conversion will
substantially increase the capital of Community Bank. Community Bank will use
the net proceeds for general corporate business purposes, such as
28
<PAGE>
lending and investment activities in the ordinary course of business. A portion
of the proceeds may be used to repay FHLB advances. On an interim basis, the
proceeds will be invested by the Bank in short- and intermediate-term
securities. Notwithstanding the foregoing, the Holding Company and the Bank
reserve the right to use the proceeds in any manner authorized by law.
The actual net proceeds may be more or less than the estimated net proceeds
calculated as shown under "Pro Forma Data," above. Additionally, the actual
expenses may be more or less than those estimated. See "The Conversion - Stock
Pricing and Number of Shares to be Issued."
DIVIDENDS
Although no decision has been made yet regarding the payment of dividends,
the Holding Company may consider a policy of paying cash dividends on the Common
Stock following the Conversion. Dividends, when and if paid, will be subject to
determination and declaration by the Board of Directors in its discretion, which
will take into account the Holding Company's consolidated financial condition
and results of operations, tax considerations, industry standards, economic
conditions, regulatory restrictions, general business practices and other
factors. Therefore, no assurances can be made as to the future ability of the
Holding Company to pay dividends. Delaware law generally limits dividends of
the Holding Company to an amount equal to the excess of its net assets (the
amount by which total assets exceeds total liabilities) over its paid-in capital
or, if there is no excess, to its net profits for the current and immediately
preceding fiscal year.
It is presently anticipated that the Holding Company will not conduct
significant operations independent of those of the Bank for some time following
the Conversion. As such, the Holding Company does not expect to have any
significant source of income other than earnings on the net Conversion proceeds
retained by the Holding Company and dividends from Community Bank, if any.
Consequently, the ability of the Holding Company to pay cash dividends to its
stockholders will be dependent upon such retained proceeds and earnings thereon,
and upon the ability of the Bank to pay dividends to the Holding Company.
Management believes that, upon completion of the Conversion, the Bank will
qualify as a Tier 1 institution, and thereby be entitled to make capital
distributions without OTS approval in an amount not exceeding 100% of its net
income year-to-date plus 50% of the Bank's capital surplus, as measured at the
beginning of the calendar year. See "Regulation - Regulatory Capital
Requirements" and "- Limitations on Dividends and Other Capital Distributions."
Assuming only the minimum number of shares are sold in the Conversion, the
purchase of the Bank's stock by the Holding Company in exchange for
substantially all the net proceeds from the Conversion (less 50% to be retained
by the Holding Company) and the investment of such proceeds in 20% risk-weighted
assets, on a pro forma basis as of March 31, 1996, the Bank would have had risk-
based capital of $5.7 million above its fully phased-in, risk-based capital
requirement. The 50% of net proceeds retained by the Holding Company would be
immediately available for the payment of dividends. See "Regulation -
Regulatory Capital Requirements" and "- Limitations on Dividends and Other
Capital Distributions." Earnings appropriated to the Bank's "excess" bad debt
reserves and deducted for federal income tax purposes cannot be used by the Bank
to pay cash dividends to the Holding Company without adverse tax consequences.
See "Regulation - Federal and State Taxation."
MARKET FOR COMMON STOCK
The Holding Company has never issued capital stock to the public and,
consequently, there is no existing market for the Common Stock and no assurance
can be given that an established and liquid trading market for the Common Stock
will develop. Depending on the number of shares sold, it is expected that
following the Conversion, the Common Stock will be traded in the over-the-
counter market. The Holding Company has applied to list the Common Stock on the
Nasdaq SmallCap Market under the symbol "CBES." However, there can be no
assurance that the Holding Company will meet Nasdaq SmallCap Market listing
requirements, which include a minimum market capitalization, at least two market
makers, and at least 300 stockholders. At the close of the Conversion,
29
<PAGE>
the Holding Company, assisted by Trident Securities, will use its best efforts
to encourage and assist market makers to establish and maintain a market for the
Common Stock and to list the Common Stock on the Nasdaq SmallCap Market,
although there can be no assurance that it will succeed in doing so. Trident
Securities has indicated its intention to make a market in the Holding Company's
Common Stock upon consummation of the Conversion, depending upon the volume or
trading activity in the Common Stock and subject to compliance with applicable
laws and other regulatory requirements.
The development of a public market that has depth, liquidity and
orderliness depends upon the presence in the marketplace of a sufficient number
of willing buyers and sellers at any given time, over which neither the Holding
Company nor any market maker has any control. Accordingly, there can be no
assurance that an active or liquid trading market for the Common Stock will
develop, or that if a market develops, it will continue. Furthermore, there can
be no assurance that purchasers will be able to sell their shares at or above
the Purchase Price. See "The Conversion - Stock Pricing and Number of Shares to
be Issued."
30
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
CONSOLIDATED STATEMENTS OF EARNINGS
The following Consolidated Statements of Earnings of the Bank for the
fiscal years ended June 30, 1995 and 1994 have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, whose report thereon appears
elsewhere herein. The Consolidated Statements of Earnings for the nine months
ended March 31, 1996 and 1995 are unaudited and have been prepared in accordance
with the requirements for a presentation of interim financial statements and are
in accordance with generally accepted accounting principles. In the opinion of
management, all adjustments, consisting of normal recurring adjustments, that
are necessary for a fair presentation of the interim periods, have been
reflected. The results of operations for the nine months ended March 31, 1996
are not necessarily indicative of the results of operations that may be expected
for the fiscal year ending June 30, 1996. These Statements should be read in
conjunction with the Consolidated Financial Statements of the Bank and Notes
thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
Nine Months ended Year ended
March 31, June 30,
-------------------------- --------------------------
1996 1995 1995 1994
------------- ----------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Interest income:
Loans receivable.................................... $ 4,811,056 $ 3,712,366 $ 5,249,045 $ 3,882,043
Mortgage-backed securities.......................... 129,261 233,026 304,343 398,903
Investment securities............................... 78,407 128,838 173,022 191,603
Loans held for sale................................. 51,631 792 25,820 32,125
Other............................................... 60,505 51,910 65,633 149,979
------------ ------------ ------------ ------------
Total interest income............................. 5,130,860 4,126,932 5,817,863 4,654,653
------------ ------------ ------------ ------------
Interest expense:
Deposits (note 6)................................... 2,484,979 1,782,516 2,577,149 2,090,280
FHLB advances....................................... 604,241 319,314 568,783 2,461
------------ ------------ ------------ ------------
Total interest expense............................ 3,089,220 2,101,830 3,145,932 2,092,741
------------ ------------ ------------ ------------
Net interest income 2,041,640 2,025,102 2,671,931 2,561,912
Provision for loan losses (note 4)................... 188,341 143,056 171,277 33,590
------------ ------------ ------------ ------------
Net interest income after provision
for loan losses.................................. 1,853,299 1,882,046 2,500,654 2,528,322
------------ ------------ ------------ ------------
Noninterest income:
Gain on sales of loans, net......................... 139,277 4,948 42,106 140,331
Customer service charges............................ 147,046 143,214 193,017 203,041
Loan servicing fees................................. 71,545 54,516 73,774 63,470
Net realized gain (loss) on sale of investment and
mortgage-backed securities available-for-sale...... 54,205 -- -- (135,933)
Writedown of investment in mutual fund (note 2)..... -- (314,148) (314,148) --
Other............................................... 93,022 76,576 101,940 103,269
------------ ------------ ------------ ------------
Total noninterest income.......................... 505,095 (34,894) 96,689 374,178
------------ ------------ ------------ ------------
Noninterest expense:
Compensation, payroll taxes and fringe benefits..... 914,857 809,447 1,080,572 952,462
Office property and equipment....................... 201,325 174,783 245,411 213,257
Data processing..................................... 128,246 119,034 162,722 152,215
Federal insurance premiums.......................... 118,058 104,274 139,020 136,103
Advertising......................................... 50,642 41,182 55,875 34,780
Real estate owned and repossessed assets............ 11,404 25,502 23,243 1,161
Other............................................... 336,733 334,596 425,704 359,812
------------ ------------ ------------ ------------
Total noninterest expense......................... 1,761,265 1,608,818 2,132,547 1,849,790
------------ ------------ ------------ ------------
Earnings before income taxes 597,129 238,334 464,796 1,052,710
Income taxes (note 8)................................ 207,098 210,650 301,238 352,000
------------ ------------ ------------ ------------
Net earnings........................................ $ 390,031 $ 27,684 $ 163,558 $ 700,710
============ ============ ============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
31
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
This discussion is intended to assist in understanding the financial
condition and results of operations of the Bank. The information contained in
this section should be read in conjunction with the Consolidated Financial
Statements and accompanying Notes thereto and the other sections contained in
this Prospectus.
The Holding Company has only recently been formed and, accordingly,
has no results of operations. The following discussion relates only to the
financial condition and results of operations of the Bank.
The earnings of the Bank depend primarily on its level of net interest
income, which is the difference between interest earned on interest-earning
assets, consisting primarily of mortgage and consumer loans and other
investments, and the interest paid on interest-bearing liabilities, consisting
of deposits and FHLB advances. Net interest income is a function of the Bank's
"interest rate spread," which is the difference between the average yield earned
on interest-earning assets and the average rate paid on interest-bearing
liabilities, as well as a function of the average balance of interest-earning
assets as compared to interest-bearing liabilities. The interest rate spread is
affected by regulatory, economic and competitive factors that influence interest
rates, loan demand and deposit flows. The Bank, like other financial
institutions, is subject to interest-rate risk to the degree that its interest-
earning assets mature or reprice at different times, or on different bases, than
its interest-bearing liabilities. The Bank's operating results are also
affected by the amount of its non-interest income, including gain on the sales
of loans, service charges, loan servicing income and other income. Non-interest
expense consists principally of employee compensation and benefits, occupancy
expense, data processing, federal insurance premiums, advertising, real estate
owned operations, and other operating expenses. The Bank's operating results
are significantly affected by general economic and competitive conditions, in
particular, the changes in market interest rates, government policies and
actions by regulatory authorities.
FINANCIAL CONDITION
Total assets decreased $6.9 million, or 7.4%, to $86.2 million at March 31,
1996 from $93.1 million at June 30, 1995. This was primarily the result of
decreases of $3.3 million in mortgage-backed securities, $1.5 million in loans
receivable, net and $2.0 million in investment securities and other interest-
earning assets. Additionally, deposits decreased by $358,000 and FHLB advances
by $6.9 million, partially offset by an increase of total equity of $402,000.
Mortgage-backed securities decreased $3.3 million, or 85.8%, to $549,000 at
March 31, 1996 from $3.9 million at June 30, 1995 reflecting the sale of $2.9
million of fixed rate securities in December 1995.
Loans receivable, net decreased by $1.6 million, or 2.0%, to $77.3
million at March 31, 1996 from $78.9 million at June 30, 1995 due to reductions
in one- to four-family portfolio loans of $2.8 million and consumer loans of
$600,000, partially offset by an increase in land loans of $1.6 million due to
an increase in demand for the construction of single-family housing.
Investment securities decreased $1.1 million, or 34.9%, to $2.0 million at
March 31, 1996 from $3.0 million at June 30, 1995 due to the sale of $1.1
million of mutual funds which were reinvested in loans.
Deposits decreased $358,000, or 0.5%, to $67.9 million at March 31, 1996
from $68.3 million at June 30, 1995. Interest credited during the nine months
ended March 31, 1996 totaled $2.0 million, while withdrawals exceeded deposits
by $2.4 million.
32
<PAGE>
FHLB advances decreased $6.9 million, or 43.3%, to $9.0 million at March
31, 1996 from $15.9 million at June 30, 1995. Cash flows from the sale of
mortgage-backed securities and mutual funds along with principal paydowns from
portfolio loans were used to pay down advances.
Total equity increased $402,000, or 5.4%, to $7.9 million at March 31, 1996
due to $390,000 of net earnings during the nine months ended March 31, 1996 and
a $12,000 unrealized gain on investment securities available for sale.
ANALYSIS OF NET INTEREST INCOME
Net interest income represents the difference between interest earned on
interest-earning assets and interest paid on interest-bearing liabilities. Net
interest income depends on the volumes of interest-earning assets and interest-
bearing liabilities and the interest rates earned or paid on them.
33
<PAGE>
The following table presents for the periods indicated the total dollar
amount of interest income from average interest-earning assets and the resultant
yields as well as the total dollar amount of interest expense on average
interest-bearing liabilities and the resultant rates. The average yields include
loan fees which are considered adjustments to yields. The amount of interest
income resulting from the recognition of loan fees was $211,000, $220,000,
$313,000 and $123,000 for the nine months ended March 31, 1996 and 1995 and for
the fiscal years ended June 30, 1995 and 1994, respectively. No tax equivalent
adjustments were made. All average balances are monthly average balances. The
Bank's management does not believe that the use of monthly balances instead of
daily balances has caused a material difference in the information presented.
Non-accruing loans have been included in the table as loans carrying a zero
yield.
<TABLE>
<CAPTION>
Nine Months Ended March 31,
-----------------------------------------------------------------------------
1996 1995
-------------------------------------- -------------------------------------
At March 31, 1996 Average Average
-----------------------
Outstanding Outstanding Interest Outstanding Interest
Balance Yield/Rate Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
----------- ----------- ----------- ------------ ----------- ----------- ------------ -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable (1)...... $ 77,273 8.03% $ 77,834 $ 4,863 8.33% $ 62,632 $ 3,713 7.90%
Mortgage-backed securities 549 6.93 2,482 129 6.93 4,405 233 7.05
Investment securities..... 1,981 4.48 2,309 78 4.50 3,026 129 5.68
Investments in other
financial institutions... 1,316 0.52 2,158 17 1.05 2,172 20 1.23
FHLB stock................ 811 6.71 801 44 7.32 532 32 8.02
------- ------- ------- ------- -------
Total interest-earning
assets (1)............. 81,930 7.80 85,584 5,131 7.99 72,767 4,127 7.56
------- -------
Noninterest-earning assets. 4,239 4,155 2,815
------- ------- -------
Total assets............ $ 86,169 $ 89,739 $ 75,582
======= ======= =======
Interest-bearing
liabilities:
Savings deposits.......... $ 3,656 2.25 3,587 60 2.23 3,827 64 2.23
Demand and NOW deposits... 13,697 2.28 13,291 216 2.17 14,438 239 2.21
Certificate accounts...... 49,042 5.65 49,586 2,209 5.94 41,623 1,480 4.74
FHLB advances............. 9,000 5.91 12,451 604 6.47 5,927 319 7.18
------- ------- ------- ------- -------
Total interest-bearing
liabilities............ 75,395 4.90 78,915 3,089 5.22 65,815 2,102 4.26
Noninterest-bearing ------- -------
liabilities............... 2,891 3,113 2,599
------- ------- -------
Total liabilities....... $ 78,286 $ 82,028 $ 68,414
======= ======= =======
Net interest income........ $ 2,042 $ 2,025
======= =======
Net interest rate spread
(2)....................... 2.90% 2.77% 3.30%
==== ==== ====
Net earning assets......... $ 6,535 $ 6,669 $ 6,952
======= ======= =======
Net yield on average
interest-earning 3.18% 3.71%
assets (3)................ ==== ====
Average interest-earning
assets to average interest-
bearing liabilities....... 108.45% 110.56%
======= =======
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Year Ended June 30,
-------------------------------------------------------------------------------
1995 1994
---------------------------------------- -------------------------------------
Average Average
Outstanding Interest Outstanding Interest
Balance Earned/Paid Yield/Rate Balance Earned/Paid Yield/Rate
----------- ------------ ------------ ----------- ----------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable (1)............ $66,107 $ 5,275 7.98% $49,380 $ 3,914 7.93%
Mortgage-backed securities...... 4,307 304 7.06 5,624 399 7.09
Investment securities........... 3,033 173 5.70 3,738 192 5.14
Investments in other financial
institutions................... 1,992 22 1.10 5,471 107 1.96
FHLB stock...................... 577 44 7.63 521 43 8.25
------- ------- ------- -------
Total interest-earning
assets (1)................... 76,016 5,818 7.65 64,734 4,655 7.19
------- -------
Noninterest-earning assets....... 3,110 2,406
------- -------
Total assets................ $79,126 $67,140
======= =======
Interest-bearing liabilities:
Savings deposits................ 3,819 85 2.23 3,719 83 2.23
Demand and NOW deposits......... 14,187 312 2.20 16,031 369 2.30
Certificate accounts............ 43,315 2,180 5.03 38,558 1,638 4.25
FHLB advances................... 7,919 569 7.19 57 3 5.26
------- ------- ------- -------
Total interest-bearing
liabilities.................. 69,240 3,146 4.54 58,365 2,093 3.59
------- -------
Noninterest-bearing liabilities.. 2,657 2,169
------- -------
Total liabilities........... $71,897 $60,534
======= =======
Net interest income.............. $ 2,672 $ 2,562
======= =======
Net interest rate spread (2)..... 3.11% 3.60%
==== ====
Net earning assets............... $ 6,776 $ 6,369
======= =======
Net yield on average interest-
earning assets (3).............. 3.52% 3.96%
==== ====
Average interest-earning
assets to average interest-
bearing liabilities............. 109.79% 110.91%
======= =======
</TABLE>
_______________________________
(1) Calculated net of deferred loan fees, loan discounts, loans in process and
loan loss reserves.
(2) Net interest rate spread represents the difference between the average rate
on interest-earning assets and the average cost of interest-bearing
liabilities.
(3) Net interest margin represents net interest income divided by average
interest-earning assets.
35
<PAGE>
RATE/VOLUME ANALYSIS
The following schedule presents the dollar amount of changes in interest
income and interest expense for major components of interest-earning assets and
interest-bearing liabilities. It distinguishes between the changes due to
changes in outstanding balances and those due to changes in interest rates. For
each category of interest-earning assets and interest-bearing liabilities,
information is provided on changes attributable to (i) changes in volume (i.e.,
changes in volume multiplied by prior interest rate) and (ii) changes in rate
(i.e., changes in rate multiplied by prior volume). For purposes of this table,
changes attributable to both rate and volume, which cannot be segregated, have
been allocated proportionately to the changes due to volume and the changes due
to rate.
<TABLE>
<CAPTION>
Nine Months Ended March 31, Years Ended June 30,
---------------------------------- ---------------------------------
1996 vs. 1995 1995 vs. 1994
---------------------------------- ---------------------------------
Increase/(Decrease) Increase/(Decrease)
Due to Total Due to Total
-------------------- ---------------------
Increase Increase
Volume Rate (Decrease) Volume Rate (Decrease)
-------- ------ ---------- -------- ------ ----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable...................... $ 940 $ 210 $ 1,150 $ 1,336 $ 25 $ 1,361
Mortgage-backed securities............ (100) (4) (104) (93) (2) (95)
Investment securities................. (27) (24) (51) (39) 20 (19)
Investments in other financial
institutions......................... -- (3) (3) (50) (35) (85)
FHLB stock............................ 17 (5) 12 4 (3) 1
------- ------- -------- ------- ------ ---------
Total interest-earning assets...... $ 830 $ 174 $ 1,004 $ 1,158 $ 5 $ 1,163
======= ======= -------- ======= ====== ---------
Interest-bearing liabilities:
Savings deposits...................... $ (4) $ -- $ (4) $ 2 $ -- $ 2
Demand and NOW deposits............... (19) (4) (23) (41) (16) (57)
Certificate accounts.................. 314 415 729 218 324 542
FHLB advances......................... 339 (54) 285 565 1 566
------- ------- -------- ------- ------ ---------
Total interest-bearing liabilities.. $ 630 $ 357 987 $ 744 $ 309 1,053
======= ======= -------- ======= ====== ---------
Net interest income..................... $ 17 $ 110
======== =========
</TABLE>
36
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND
1995
Performance Summary. Net earnings for the nine months ended March 31, 1996
increased by $362,000, or 1292.9%, to $390,000 from $28,000 for the nine months
ended March 31, 1995. The increase was primarily due to the combined effects of
a $17,000 increase in net interest income, a $538,000 increase in non-interest
income, and a $4,000 decrease in income taxes for the 1996 period as compared to
the 1995 period, which more than offset a $45,000 increase in the provision for
loan losses and a $152,000 increase in noninterest expense. For the nine months
ended March 31, 1996 and 1995, the returns on average assets were 0.60% and
0.05%, respectively, while the returns on average equity were 6.74% and 0.52%,
respectively.
Net Interest Income. For the nine months ended March 31, 1996, net interest
income increased by $17,000, or 0.8%, to $2.04 million from $2.03 million for
the nine months ended March 31, 1995. The increase reflected an increase of $1.0
million in interest income to $5.1 million from $4.1 million which more than
offset an increase of $987,000 in interest expense to $3.1 million from $2.1
million. The increase in interest income reflected increased balances of loans
receivable, primarily adjustable rate mortgage loans and consumer loans
originated in fiscal 1995 and construction lending on single-family residences.
Interest expense increased by $987,000, or 47.0%, as a result of an $8.0
million, or 19.1%, increase in average certificate accounts due principally to a
special certificate promotion as well as increased certificate rates, primarily
due to higher market interest rates, and increased borrowings to fund loan
demand.
For the nine months ended March 31, 1996 the average yield on interest-
earning assets was 7.99% compared to 7.56% for the nine months ended March 31,
1995. The average cost of interest-bearing liabilities was 5.22% for the nine
months ended March 31, 1996, an increase from 4.26% for the same period ended
March 31, 1995. The average balance of interest-earning assets increased by
$12.8 million to $85.6 million for the nine months ended March 31, 1996 from
$72.8 million for the nine months ended March 31, 1995. During this same period,
average interest-bearing liabilities increased by $13.1 million to $78.9 million
for the nine months ended March 31, 1996 from $65.8 million for the same period
ended March 31, 1995.
The Bank's average interest rate spread was 2.77% for the nine months ended
March 31, 1996 compared to 3.30% for the earlier year period. The average net
interest margin was 3.18% for the nine months ended March 31, 1996 compared to
3.71% for the nine months ended March 31, 1995.
Provision for Loan Losses. During the nine months ended March 31, 1996, the
Bank charged $188,000 against earnings as a provision for loan losses compared
to a provision of $143,000 for the nine months ended March 31, 1995. This charge
resulted in an allowance for loan losses of $347,000, or 0.45% of loans
receivable, net at March 31, 1996, compared to $205,000, or 0.28% of loans
receivable, net at March 31, 1995. The allowance for loan losses as a percentage
of non-performing loans increased to 109.46% at March 31, 1996 from 96.70% at
March 31, 1995. The ratio increased due to the provision for loan losses for the
nine months ended March 31, 1996 exceeding net charge-offs. The allowance for
loan losses is based on a detailed review of non-performing and other problem
loans, prevailing economic conditions, actual loss experience and other factors,
which, in management's view, recognizes the changing composition of the Bank's
loan portfolio and the inherent risk associated with different types of loans.
Management will continue to monitor its allowance for loan losses and make
future additions to the allowance through the provision for loan losses as
economic conditions dictate. Although the Bank maintains its allowance for loan
losses at a level which it considers to be adequate to provide for potential
losses, there can be no assurance that future losses will not exceed estimated
amounts or that additional provisions for loan losses will not be required in
future periods.
Non-Interest Income. For the nine months ended March 31, 1996, non-interest
income increased $538,000 to $504,000 from ($34,000) for the same period ended
March 31, 1995. Included in non-interest income was the gain on the sale of
loans originated for sale; during the nine months ended March 31, 1996, the Bank
sold $12.6
37
<PAGE>
million of such loans with a gain of $139,000. During the nine months ended
March 31, 1995, the gain on sale of loans was $5,000 represented by $1.2 million
of sold loans. Customer service charges, primarily relating to fees on
transaction accounts, were $147,000 for the nine months ended March 31, 1996 and
$143,000 for the same period ended March 31, 1995. During the nine months ended
March 31, 1996, the Bank recognized a gain of $54,000 on the sale of mortgage-
backed and investment securities. There were no sales of securities during the
nine months ended March 31, 1995; however, management determined its investment
in mutual funds had an other than temporary decline in value and wrote down its
investment by $314,000 during the nine months ended March 31, 1995. Other
income included late charges on loans of $46,000 and $38,000 for the nine months
ended March 31, 1996 and 1995, respectively.
Non-Interest Expense. Non-interest expense increased by $152,000 to $1.8
million for the nine months ended March 31, 1996 from $1.6 million for the nine
months ended March 31, 1995. Compensation expense increased $105,000 to $915,000
for the nine months ended March 31, 1996 from $809,000 for the same period ended
March 31, 1995, due to an increase in employees to staff the new branch office
in Kearney, Missouri and to increase the mortgage loan processing staff due to
an increase in originations of loans held for sale. Federal insurance premiums
increased $14,000 to $118,000 from $104,000 due to an increase in deposits.
Other increases in noninterest expense principally relate to the new branch
location in Kearney, Missouri.
Income Taxes. Income taxes increased by $4,000 to $207,000 for the nine
months ended March 31, 1996 from $211,000 for the nine months ended March 31,
1995. Exclusive of the mutual fund write down in 1995, the effective tax rates
were 34.7% and 38.1% for the nine months ended March 31, 1996 and 1995,
respectively.
COMPARISON OF OPERATING RESULTS FOR THE FISCAL YEARS ENDED JUNE 30, 1995 AND
1994
Performance Summary. Net earnings for the year ended June 30, 1995
decreased by $537,000, or 76.7%, to $164,000 from $701,000 for the year ended
June 30, 1994. The decrease was primarily due to a reduction in noninterest
income of $277,000, an increase in the provision for loan losses of $138,000,
and an increase in noninterest expense of $283,000, which was only partially
offset by an increase of $110,000 in net interest income and lower income taxes.
For the fiscal years ended June 30, 1995 and 1994, the returns on average assets
were 0.21% and 1.04%, respectively, while the returns on average equity were
2.27% and 10.52%, respectively.
Net Interest Income. For the year ended June 30, 1995, net interest income
increased by $110,000 to $2.7 million from $2.6 million for fiscal 1994. The
increase reflected an increase of $1.2 million in interest income to $5.8
million from $4.7 million, which more than offset an increase of $1.1 million in
interest expense to $3.1 million from $2.1 million. The increase in interest
income reflected the increase in loans receivable due to favorable economic
conditions and increased demand for single-family homes in communities northeast
of Kansas City, Missouri and management's aggressive pursuit of these markets.
Interest expense increased primarily due to increased borrowings to meet loan
demand and an increase in certificate balances and rates. Net interest income
increased primarily as a result of the increase in the average balance of
interest-eaming assets in fiscal 1995, as compared to the increase in the
average balance of interest-bearing liabilities.
For the year ended June 30, 1995 the average yield on interest-eaming
assets was 7.65% compared to 7.19% for fiscal 1994. The average cost of
interest-bearing liabilities was 4.54% for the year ended June 30, 1995, an
increase from 3.59% for fiscal 1994. The average balance of interest-earning
assets increased by $11.3 million to $76.0 million for the year ended June 30,
1995 compared to $64.7 million for fiscal 1994. During this same period, the
average balance of interest-bearing liabilities increased by $10.9 million to
$69.2 million for the year ended June 30, 1995 from $58.4 million for fiscal
1994.
Due to these higher funding costs, the average interest rate spread was
3.11% for the year ended June 30, 1995 compared to 3.60% a year earlier. The
average net interest margin was 3.52% for the year ended June 30, 1995 compared
to 3.96% for the year ended June 30, 1994.
38
<PAGE>
Provision for Loan Losses. During the year ended June 30, 1995 the Bank
charged $171,000 against earnings as a provision for loan losses compared to
$33,000 for the year ended June 30, 1994. The increase in the fiscal 1995
provision for loan losses resulted primarily from an increase in net charge-offs
on consumer loans of $86,000 and an increase in construction lending. The
consumer loan losses were principally due to loans made to customers purchasing
automobiles from one specific used-car dealer. The Bank has identified all these
loans. The allowance for loan losses was $226,000, or 0.29% of loans receivable
at June 30, 1995, compared to $163,000, or 0.30% of loans receivable at June 30,
1994. The allowance for loan losses as a percentage of non-performing loans
increased to 150.67% at June 30, 1995 from 57.80% at June 30, 1994.
Non-Interest Income. For the year ended June 30, 1995 non-interest income
decreased by $276,000 to $97,000 from $373,000 for fiscal 1994. Included in non-
interest income is gain on sales of loans originated for sale which decreased
$98,000 during fiscal 1995 due to consumers' lack of demand for fixed rate
product and increased demand for adjustable rate mortgages which the Bank
retains in its own portfolio. During the year ended June 30, 1995 management
recorded a write down of $314,000 for a mutual fund investment as it determined
an other-than-temporary decline in value existed. During fiscal 1994, mutual
funds were sold with a loss of $136,000 to offset taxable capital gains of a
like amount.
Non-Interest Expense. Non-interest expense increased by $284,000 to $2.1
million for the year ended June 30, 1995 from $1.8 million for the year ended
June 30, 1994. The increase reflected normal salary increases as well as an
increase of $128,000 in compensation, payroll taxes and fringe benefits due to
an increase in the number of employees to obtain and process mortgage loan
applications and to staff the opening of the Kearney, Missouri branch. Other
increases principally related to the new branch location in Kearney, Missouri
and the addition of mortgage lending personnel.
Income Taxes. Income taxes decreased by $51,000 to $301,000 for the year
ended June 30, 1995 from $352,000 for the year ended June 30, 1994. The
effective tax rates, exclusive of the mutual fund write down, were 38.6% and
33.4% for the years ended June 30, 1995 and 1994, respectively.
ASSET/LIABILITY MANAGEMENT
Savings institutions such as the Bank are subject to interest rate risk to
the extent their interest-bearing liabilities (consisting primarily of deposit
accounts, FHLB advances and other borrowings) mature or reprice more rapidly, or
on a different basis, than their interest-earning assets (consisting
predominantly of intermediate and long-term real estate loans and investments
held for investment and liquidity purposes). Having interest-bearing liabilities
that mature or reprice more frequently on average than assets may be beneficial
in times of declining interest rates, although such an asset/liability structure
may result in declining net interest earnings during periods of rising interest
rates. Conversely, having interest-earning assets that mature or reprice more
frequently on average than liabilities may be beneficial in times of rising
interest rates, although this asset/liability structure may result in declining
net interest earnings during periods of falling interest rates.
39
<PAGE>
The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at March 31, 1996, which are expected
to reprice or mature in each of the future time periods shown, assuming a 43.27%
annual pre-payment rate for fixed rate real estate loans, a 9.41% annual pre-
payment rate for mortgage-backed securities, a 15.15% annual pre-payment rate
for adjustable rate real estate loans, and a 51.05% annual pre-payment rate for
consumer loans. Except for deposits, which are classified as repricing in the
"within 1 year" category, the amounts of assets and liabilities shown which
reprice or mature during a particular period were determined in accordance with
the earlier of term to repricing or the contractual terms of the asset
liability. For information regarding the contractual maturities of the Bank's
loans, investments and deposits, see "Business--Lending Activities," "--
Investment Activities" and "--Sources of Funds."
<TABLE>
<CAPTION>
Amounts Maturing or Repricing at March 31, 1996
------------------------------------------------------------------------
Within Over
1 Year 1-3 Years 3-5 Years 5-10 Years 10 Years Total
------ --------- --------- ---------- -------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable, net (1)................... $ 66,145 $ 10,036 $ 739 $ 340 $ 13 $ 77,273
Mortgage-backed securities.................. 43 405 31 66 4 549
Investment securities....................... 1,981 -- -- -- -- 1,981
Investments in other financial institutions. 1,316 -- -- -- -- 1,316
FHLB stock.................................. 811 -- -- -- -- 811
-------- --------- --------- ------- --------- --------
Total interest-earning assets (1).......... $ 70,296 $ 10,441 $ 770 $ 406 $ 17 $ 81,930
======== ========= ========= ======= ========= ========
Interest-bearing liabilities:
Savings deposits............................ $ 3,656 $ -- $ -- $ -- $ -- $ 3,656
Demand and NOW deposits..................... 13,697 -- -- -- -- 13,697
Certificate accounts........................ 39,947 5,611 1,377 2,107 -- 49,042
FHLB advances............................... 4,000 2,000 3,000 -- -- 9,000
-------- --------- --------- ------- --------- --------
Total interest-bearing liabilities......... $ 61,300 $ 7,611 $ 4,377 $ 2,107 $ -- $ 75,395
======== ========= ========= ======= ========= ========
Interest sensitivity gap..................... $ 8,996 $ 2,830 $ (3,607) $(1,701) $ 17 $ 6,535
======== ========= ========= ====== ========= ========
Cumulative interest sensitivity gap.......... $ 8,996 $ 11,826 $ 8,219 $ 6,518 $ 6,535 $ 6,535
======== ========= ========= ======= ========= ========
Ratio of interest-earning assets to
interest-bearing liabilities................ 114.68% 137.18% 17.59% 19.27% --% 108.67%
====== ====== ====== ====== ======== ======
Ratio of cumulative gap to total assets...... 10.44% 13.72% 9.54% 7.56% 7.58% 7.58%
====== ====== ====== ====== ======== ======
</TABLE>
______________________________________
(1) Calculated net of deferred loan fees, loan discounts, loans in process and
loan loss reserves.
40
<PAGE>
Net Portfolio Value. In order to measure its interest rate risk, the Bank
computes the amounts by which the net present value of the Bank's cash flows
from assets, liabilities and off-balance sheet items, if any (the institution's
Net Portfolio Value, or NPV), would change in the event of a range of assumed
changes in market interest rates. These computations estimate the effect on the
Bank's NPV of instantaneous and permanent 1% to 4% increases and decreases in
market interest rates. The Board of Directors has established maximum increases
and decreases in NPV. The table below indicates the Board limits and the
estimates of projected changes in NPV in the event of 1%, 2%, 3% and 4%
instantaneous and permanent increases and decreases in market interest rates,
respectively.
The Net Portfolio Value method of calculating interest rate risk originated
in a rule adopted by the OTS for the purpose of incorporating an interest rate
risk ("IRR") component into its risk-based capital rules. The IRR component is a
dollar amount that will be deducted from total capital for the purpose of
calculating an institution's risk-based capital requirement and is measured in
terms of the sensitivity of its NPV to changes in interest rates. NPV is the
difference between incoming and outgoing discounted cash flows from assets,
liabilities and off-balance sheet contracts. An institution's IRR is measured as
the change to its NPV as a result of a hypothetical 200 basis point change in
market interest rates. A resulting change in NPV of more than 2% of the
estimated market value of its assets will require the institution to deduct from
its capital 50% of that excess change. The rule provides that the OTS will
calculate the IRR component quarterly for each institution. The Bank, based on
asset size and risk-based capital, has been informed by the OTS that it is
exempt from this rule. Nevertheless, the following table presents the Bank's NPV
at March 31, 1996, as calculated by the OTS, based on information provided to
the OTS by the Bank.
As another measure to calculate its interest rate risk, the Bank computes
the amounts by which Net Interest Income (NII) would change in the event of a
range of changes in interest rates. These computations estimate the effect on
the Bank's NII of instantaneous and permanent 1% to 4% increases and decreases
in interest rates. The Board has established maximum increases and decreases in
NII. The following table indicates the Board limits and the estimates of
projected changes in NII in the event of 1%, 2%, 3% and 4% instantaneous and
permanent increases and decreases in interest rates, respectively.
Computations of prospective effects of hypothetical interest rate changes
are based on numerous assumptions, including relative levels of market interest
rates, loan prepayments and deposit run offs, and should not be relied upon as
indicative of actual results. Further, the computations do not contemplate any
actions the Bank may undertake in response to changes in interest rates.
<TABLE>
<CAPTION>
Board Board
Change in Amount of Percent Limit of Amount of Percent Limit of
Interest Rates Estimated Change Change Change Net Interest Change Change Change
(basis points) NPV in NPV in NPV in NPV Income in NII in NII in NII
- ---------------- --------- --------- -------- -------- ------------ -------- ------- -------
(Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
+400bp $7,713 $(3,126) (28.84) (40.0) $2,993 $(369) (10.98) (30.0)
+300bp 8,843 (1,996) (18.41) (30.0) 3,148 (214) (6.37) (20.0)
+200bp 9,843 (996) (9.19) (20.0) 3,297 (65) (1.93) (20.0)
+100bp 10,547 (292) (2.69) (10.0) 3,427 65 1.93 (20.0)
0bp 10,839 -- -- -- 3,362 -- -- --
-100bp 10,724 (115) (1.06) (10.0) 3,299 (63) (1.87) (20.0)
-200bp 10,444 (395) (3.64) (20.0) 3,236 (126) (3.75) (20.0)
-300bp 10,291 (548) (5.06) (30.0) 3,180 (182) (5.41) (20.0)
-400bp 10,351 (488) (4.50) (40.0) 3,125 (237) (7.05) (30.0)
</TABLE>
Although the OTS has informed the Bank that it is not subject to the IRR
component discussed above, the Bank is still subject to interest rate risk and,
as can be seen above, rising interest rates will reduce the Bank's NPV. The
41
<PAGE>
OTS has the authority to require otherwise exempt institutions to comply with
the rule concerning interest rate risk. See "Regulation--Regulatory Capital
Requirements."
Certain shortcomings are inherent in the method of analysis presented in
both the computation of NPV and in the analysis presented in the prior table
setting forth the maturing and repricing of interest-earning assets and
interest-bearing liabilities. Although certain assets and liabilities may have
similar maturities or periods within which they will reprice, they may react
differently to changes in market interest rates. The interest rates on certain
types of assets and liabilities may fluctuate in advance of changes in market
interest rates, while interest rates on other types may lag behind changes in
market rates. Additionally, adjustable-rate mortgages have features which
restrict changes in interest rates on a short-term basis and over the life of
the asset. The proportion of adjustable-rate loans could be reduced in future
periods if market interest rates would decrease and remain at lower levels for a
sustained period, due to increased refinance activity. Further, in the event of
a change in interest rates, prepayment and early withdrawal levels would likely
deviate significantly from those assumed in the table. Finally, the ability of
many borrowers to service their adjustable-rate debt may decrease in the event
of a sustained interest rate increase.
The Bank's Board of Directors has formulated an Asset/Liability Policy
designed to promote long-term profitability while managing interest rate risk.
The Asset/Liability Policy is designed to reduce the impact of changes in
interest rates on the Bank's net interest income by achieving a more favorable
match between the maturity or repricing dates of its interest-earning assets and
interest-bearing liabilities. The Bank has sough to reduce exposure of its
earnings to changes in market interest rates by increasing the interest rate
sensitivity of the Bank's assets through the origination of loans with interest
rates subject to periodic adjustment to market conditions. Accordingly, the Bank
has emphasized the origination of adjustable-rate mortgage ("ARM") loans and
consumer loans for retention in its portfolio. The Bank also generally sells its
long-term fixed-rate loans in the secondary market. The Bank has also increased
its portfolio of construction loans which generally have shorter maturities and
higher yields. Finally, the Bank has sought to maintain a strong base of less
interest sensitive and lower costing "core deposits" in the form of passbook
accounts, NOW accounts, money market accounts and noninterest-bearing demand
accounts, and by promoting longer-term certificates of deposit in an effort to
extend the maturity of its liabilities.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of funds are deposits, FHLB advances, repayments
on and sales of loans, the maturity of investment securities and interest
income. Although maturity and scheduled amortization of loans are relatively
predictable sources of funds, deposit flows and prepayments on loans are
influenced significantly by general interest rates, economic conditions and
competition.
The primary investing activity of the Bank is the origination of loans to
be held for investment. For the nine months ended March 31, 1996 and the fiscal
year ended June 30, 1995, the Bank originated loans for portfolio in the amount
of $33.9 million and $52.8 million, respectively. There were no purchases of
loans during these periods. The Bank also originates loans for sale in the
secondary market. For the nine months ended March 31, 1996 and the fiscal year
ended June 30, 1995, the Bank originated $12.0 million and $6.1 million,
respectively, of mortgage loans for sale in the secondary market. For the nine
months ended March 31, 1996 and the fiscal year ended June 30, 1995, these
activities were funded primarily by principal repayments of $23.0 million and
$26.4 million, respectively, and proceeds from the sale of loans of $12.6
million and $4.7 million, respectively.
The Bank is required to maintain minimum levels of liquid assets under the
OTS regulations. Savings institutions are required to maintain an average daily
balance of liquid assets (including cash, certain time deposits, and specified
U.S. Government, state or federal agency obligations) of not less than 5.0% of
its average daily balance of net withdrawal accounts plus short-term borrowings.
It is the Bank's policy to maintain its liquidity portfolio in excess of
regulatory requirements. The Bank's eligible liquidity ratios were 5.96% and
9.53%, respectively, at March 31, 1996 and at June 30, 1995.
42
<PAGE>
The Bank's most liquid assets are cash and cash equivalents, which include
short-term investments. The levels of these assets are dependent on the Bank's
operating, financing, lending and investing activities during any given period.
At March 31, 1996 and at June 30, 1995, cash and cash equivalents were $2.1
million and $3.1 million, respectively. The decrease in cash and cash
equivalents in 1996 compared to 1995 resulted primarily from the use of cash to
fund loans. The principal component of cash provided during the nine months
ended March 31, 1996 and the fiscal year ended June 30, 1995 was the proceeds
from loan repayments, sales of loans, deposit activity, and investment
maturities. The Bank may initially maintain a somewhat higher level of liquidity
following consummation of the Conversion until appropriate investments are
identified for the proceeds raised. See "Use of Proceeds."
Liquidity management for the Bank is both an ongoing and long-term function
of the Bank's asset/liability management strategy. Excess funds generally are
invested in overnight deposits at the FHLB of Des Moines. Should the Bank
require funds beyond its ability to generate them internally, additional sources
of funds are available through FHLB of Des Moines advances. The Bank would
pledge its FHLB of Des Moines stock or certain other assets as collateral for
such advances. For the nine months ended March 31, 1996, the Bank had an
average balance of $12.5 million in FHLB advances.
At March 31, 1996, the Bank had outstanding loan commitments of $1.4
million, unused lines of credit of $428,000 and undisbursed loans in process of
$8.1 million. The Bank anticipates it will have sufficient funds available to
meet its current loan commitments, including loan applications received and in
process prior to the issuance of firm commitments. Certificates of deposit which
are scheduled to mature in one year or less at March 31, 1996 were $39.4
million. Management believes that a significant portion of such deposits will
remain with the Bank.
Following consummation of the Conversion, the Holding Company initially
will have no business other than holding the capital stock of the Bank and the
investment of the net proceeds from the Conversion retained by it. Management
believes the net proceeds will provide sufficient funds for the Holding
Company's operations.
Under federal law, the Bank is required to meet certain tangible, core and
risk based capital requirements. For information regarding the Bank's regulatory
capital compliance, see "Pro Forma Regulatory Capital" and "Regulation -
Regulatory Capital Requirements."
RECENT ACCOUNTING DEVELOPMENTS
Statement of Financial Accounting Standards No. 119, Disclosures About
Derivative Financial Instruments and Fair Value of Financial Instruments,
requires disclosures of information such as credit and market risks, cash
requirements and accounting policies about derivative financial instruments.
SFAS No. 119 is effective for financial statements issued for fiscal years
ending after December 15, 1994, except for entities with less than $150 million
in total assets. For those entities, SFAS No. 119 is effective for financial
statements issued for fiscal years ending after December 15, 1995. SFAS No. 119
is effective for the Bank for the fiscal year ending June 30, 1996.
The Financial Accounting Standards Board ("FASB") has issued SFAS No. 107,
Disclosure about Fair Value of Financial Instruments, which generally requires
disclosure of the fair value of financial instruments, both assets and
liabilities recognized and not recognized in the balance sheets. The FASB has
also issued SFAS No. 114, Accounting by Creditors for Impairment of a Loan, and
SFAS No. 118, Accounting by Creditors for Impairment of a Loan -Income
Recognition and Disclosures. SFAS No. 107, SFAS No. 114 and SFAS No. 118 are
effective for fiscal years beginning after December 15, 1994. SFAS No. 114, as
amended by SFAS No. 118, requires that impaired loans be measured at the present
value of expected future cash flows discounted at the loan's effective interest
rate or, as a practical expedient, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent. Homogeneous
loans, such as single-family loans and most categories of consumer loans, are
excluded from this requirement. Adoption of these statements will be effective
for the fiscal year beginning July 1, 1995. Management does not expect the
adoption of SFAS Nos. 114 and 118 will have a material adverse impact on the
Bank's financial position or results of operations.
43
<PAGE>
In November 1993, the AICPA issued SOP 93-6, "Employers' Accounting for
Employee Stock Ownership Plans," which is effective for fiscal years beginning
after December 15, 1993 and which applies to shares of capital stock of
sponsoring employers acquired by ESOPs after December 31, 1992 that have not
been committed to be released as of the beginning of the year in which the ESOP
is adopted. The SOP requires that shares to be released in an accounting period
should be reflected in the consolidated financial statements as compensation
expense equal to the fair value of the shares at the time of release. Thus, as
shares increase or decrease in value, earnings will be affected relative to the
shares to be released in that period. Additionally, the SOP requires that
outstanding shares for purposes of computing both primary and fully diluted
earnings per share include only those shares scheduled to be released in that or
prior periods. Thus, as additional shares are released by the ESOP in future
periods, earnings per share may be diluted. Shares of Common Stock of the
Holding Company to be acquired by the ESOP are scheduled to be released over a
ten-year period commencing with the consummation of the Conversion. However,
the effect on net income and book value per share for 1996 cannot be predicted
due to the uncertainty of the fair value of the shares subsequent to their
issuance.
SFAS No. 123, Accounting for Stock-Based Compensation, is effective for
fiscal years beginning after December 15, 1995. This statement establishes
financial accounting and reporting standards for stock-based employee
compensation plans, including stock option plans. These plans include all
arrangements by which employees receive shares of stock or other equity
investments of the employer or where an employer issues its equity instruments
to acquire goods and services from nonemployees. This statement will require pro
forma disclosures in fiscal 1997 of net income and earnings per share as if a
new accounting method based on the estimated fair value of employee stock
options had been adopted. The Bank has not yet determined whether the optional
accounting treatment proposed by SFAS No. 123 will be adopted.
SFAS No. 122, Accounting for Mortgage Servicing Rights, will be effective
for the Bank for the year beginning July 1, 1996 and generally requires entities
that sell or securitize loans and retain the mortgage servicing rights to
allocate the total cost of the mortgage loans to the mortgage servicing right
and the loan based on their relative fair value. Costs allocated to mortgage
servicing rights should be recognized as a separate asset and amortized over the
period of estimated net servicing income and evaluated for impairment based on
fair value. The adoption of this statement is not expected to have a material
effect on the Consolidated Financial Statements.
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and Long-
Lived Assets to be Disposed of, is effective for the fiscal year beginning July
1, 1996. The statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. An impairment loss is recognized if the sum of the
expected future cash flows is less than the carrying amount of the asset.
Management does not expect the implementation of SFAS No. 121 to have a material
impact on the Bank's consolidated financial position or results of operations.
In April 1995, the FASB issued SOP 94-6, Disclosure of Certain Significant
Risks and Uncertainties. This SOP applies to financial statements prepared in
conformity with generally accepted accounting principles by all nongovernmental
entities. The disclosure requirements in SOP 94-6 focus primarily on risks and
uncertainties that could significantly affect the amounts reported in the
financial statements in the near-term functioning of the reporting entity. The
risks and uncertainties discussed in SOP 94-6 stem from the nature of the
entity's operations, from the necessary use of estimates in the preparation of
the entity's financial statements, and from significant concentrations in
certain aspects of the entity's operations. SOP 94-6 is effective for financial
statements issued for fiscal years ending after June 30, 1995 and is not
expected to have any impact on the Bank's operations.
44
<PAGE>
IMPACT OF INFLATION AND CHANGING PRICES
The Consolidated Financial Statements and Notes thereto presented herein
have been prepared in accordance with generally accepted accounting principles,
which generally requires the measurement of financial position and operating
results in terms of historical dollars without considering the change in the
relative purchasing power of money over time due to inflation. The impact of
inflation is reflected in the increased cost of the Bank's operations. Nearly
all the assets and liabilities of the Bank are financial, unlike most industrial
companies. As a result, the Bank's performance is directly impacted by changes
in interest rates, which are indirectly influenced by inflationary expectations.
The Bank's ability to match the interest sensitivity of its financial assets to
the interest sensitivity of its financial liabilities in its asset/liability
management may tend to minimize the effect of change in interest rates on the
Bank's performance. Changes in interest rates do not necessarily move to the
same extent as changes in the price of goods and services. In the current
increasing interest rate environment, liquidity and the maturity structure of
the Bank's assets and liabilities are critical to the maintenance of acceptable
performance levels.
BUSINESS
GENERAL
Community Bank has been, and intends to continue to be, a community-
oriented financial institution offering selected financial services to meet the
needs of the communities it serves. The Bank attracts deposits from the general
public and historically has used such deposits, together with other funds,
primarily to originate one- to four-family residential mortgage loans,
construction and land loans for single-family residential properties, and
consumer loans consisting primarily of loans secured by automobiles. While the
Bank's primary business has been that of a traditional thrift institution,
originating loans in its primary market area for retention in its portfolio, the
Bank also has been an active participant in the secondary market, originating
residential mortgage loans for sale. At March 31, 1996, the Bank's total loan
portfolio was $86.0 million, of which 61.0% were one- to four-family residential
mortgage loans, 25.0% were construction and land loans (the vast majority of
which related to single-family residential properties), and 12.4% were consumer
loans. During the nine months ended March 31, 1996 and the fiscal year ended
June 30, 1995, the Bank originated and sold $12.6 million and $4.7 million,
respectively, of one-to four-family residential mortgage loans in the secondary
market. See "Lending Activities."
At March 31, 1996, substantially all of the Bank's real estate mortgage
loans were secured by properties located in the Bank's market area. See "Risk
Factors - Geographical Concentration of Loans." To a substantially lesser
extent, the Bank invests in various investment securities, including mortgage-
backed securities.
The Bank currently offers a variety of deposit accounts, which include
passbook savings, NOW, noninterest bearing demand, money market and certificate
accounts. The Bank generally solicits deposits in its primary market area. The
Bank does not accept any brokered deposits.
CURRENT BUSINESS STRATEGY
The Bank's business strategy is to operate as a well-capitalized,
profitable and independent community savings institution dedicated primarily to
home-mortgage lending. In recent years, in response to significant growth in its
primary market area, the Bank has implemented this strategy by (i) increasing
its construction and land lending in response to the increased demand for such
loans; (ii) increasing its origination of one- to four-family residential
mortgage loans for sale in the secondary mortgage market; and (iii) increasing
the origination of adjustable-rate one-to four-family residential mortgage loans
for retention in its portfolio. The Bank has sought to increase such lending
activity while simultaneously (1) maintaining asset quality, (2) managing
interest rate risk exposure, (3) maintaining acceptable levels of capital, (4)
controlling operating expenses, and (5) maintaining and, if possible, increasing
the Bank's profitability.
45
<PAGE>
The highlights of the Bank's business strategy are as follows:
. Increasing Construction and Land Lending. In order to take advantage
of significant new real estate development in the north Kansas City
area, the Bank has substantially increased its origination of
construction and land loans in recent years. At March 31, 1996 and at
June 30, 1995, construction and land loans constituted 25.0% and
21.3%, respectively, of the Bank's total loan portfolio. By
comparison, at June 30, 1994, construction and land loans constituted
14.5% of the Bank's total loan portfolio.
. Originating Single-Family Loans for Secondary Market Sale. Also in
response to market demand, the Bank has increased its originations and
sales of single-family fixed-rate mortgage loans into the secondary
mortgage market. The sale of such loans into the secondary mortgage
market reduces the Bank's interest rate risk and permits the Bank to
generate non-interest income from servicing such loans. For the nine
months ended March 31, 1996, the Bank originated $14.3 million of
fixed-rate one- to four-family residential mortgage loans and sold
$12.6 million, or 87.6%, of such loans into the secondary mortgage
market.
. Originating for Portfolio Adjustable-Rate Single Family Loans. The
Bank has sought to increase its portfolio of adjustable-rate single
family mortgage loans. For the nine months ended March 31, 1996, the
Bank originated $4.5 million in adjustable-rate single family mortgage
loans. The Bank's ability to originate adjustable-rate mortgage loans
to a certain extent is dependent upon relative customer demand for
such loans, which is affected by the interest rate environment, among
other factors.
. Asset Quality. The Bank's non-performing assets have ranged between
0.17% and 0.55% of total assets during the last two fiscal years and
represented 0.38% of total assets at March 31, 1996. The Bank's
allowance for loan losses at March 31, 1996 totalled $347,000, or
0.45% of total loans receivable, net.
. Managing Interest Rate Risk. Management of the Bank has attempted to
reduce interest rate risk by: (i) emphasizing the origination of
adjustable rate mortgages for retention in its portfolio; (ii)
originating virtually all of its long-term fixed rate loans for sale
in the secondary mortgage market; (iii) originating for retention in
its portfolio construction loans and non-mortgage consumer loans,
which have shorter terms; (iv) maintaining a strong base of less
interest rate sensitive "core deposits" and promoting longer-term
certificates of deposit, where practical; and (v) utilizing FHLB
borrowings to lengthen the maturity of its liabilities. For the nine
months ended March 31, 1996, of the $6.3 million in one- to four-
family mortgage loans originated by the Bank for its portfolio, $4.5
million, or 71.0%, had adjustable interest rates. In addition, of the
$14.3 million in fixed-rate one-to four-family residential mortgage
loans originated by the Bank, $12.6 million of such loans, or 88.1%,
were sold in the secondary mortgage market. The Bank's base of core
deposit accounts consisting of passbook accounts, demand deposits and
money market deposit accounts amounted to $18.9 million at March 31,
1996, or 27.8% of the Bank's total deposits.
. Capital Strength. At March 31, 1996, the Bank exceeded all of its
regulatory capital requirements with tangible and core capital of
9.14% of adjusted total assets and risk-based capital of 12.04% of
total risk-weighted assets. As a result of the Conversion and based on
the assumptions stated herein, at the midpoint of the Estimated
Valuation Range at March 31, 1996, the Bank would have had pro forma
equity of approximately $11.6 million, or 12.8% of total assets.
. Controlling Operating Expense. The Bank's management monitors
operating expenses on an ongoing basis and places significant emphasis
on controlling such costs. The Bank's noninterest expense totaled $1.8
million in the nine months ended March 31, 1996, $2.1 million in
fiscal 1995, and $1.8 million in fiscal 1994. The Bank's ratio of
noninterest expense to average total assets was 2.62% for
46
<PAGE>
the nine months ended March 31, 1996, and 2.70% and 2.75% for fiscal
1995 and 1994, respectively. In recent years, the Bank's operating
expenses have increased as a result of the increase in personnel hired
to originate one-to four-family and construction and land loans in
response to the increased demand for such loans in the Bank's primary
market area. The increase in operating expenses also reflects the
opening in 1995 of the Bank's Kearney branch office.
. Profitability. Although no assurance can be made regarding future
profitability, the Bank has been profitable during recent years. The
Bank had net earnings of $164,000 in fiscal 1995 and $701,000 in
fiscal 1994. The Bank's average interest rate spread was 2.77%, 3.11%
and 3.60%, respectively, for the nine months ended March 31, 1996 and
for fiscal 1995 and 1994. The Bank is attempting to increase its net
earnings by increasing its servicing fees on loans originated for sale
into the secondary market, and by increasing its interest rate spread
by increasing its portfolio of higher-yielding construction and land
loans, particularly for new home construction in the area around the
Bank's Kearney branch office, and by increasing the origination of
higher-yielding consumer loans. See "Business--Lending Activities" and
"Risk Factors--Construction and Land Lending."
MARKET AREA AND COMPETITION
Community Bank serves communities located in Clay and Ray Counties and in
surrounding counties in Missouri from its main office in Excelsior Springs and
its branch office in Kearney. Both Excelsior Springs and Kearney are located in
Clay County, which is part of the Kansas City Metropolitan Statistical Area.
Excelsior Springs and Kearney are small towns with 1990 populations estimated at
11,000 and 2,000, respectively. Clay County has a relatively large population
(estimated at 166,000 as of 1995), and the northern portion of Clay County is a
combination of suburban and rural areas containing a number of small towns,
including Excelsior Springs and Kearney. Southern Clay County is a rapidly
developing suburban market, and is home to a large number of people who commute
to jobs in areas closer to Kansas City.
Most of the employment in Clay County is provided by light manufacturing,
services and retail trade. Included among the largest employers in Clay County
are a number of hospitals (Liberty Hospital, Excelsior Springs Medical Center,
North Kansas City Hospital, and St. Luke's Northland Hospital), local school
districts and two community colleges. Employers in the manufacturing sector
include Ford Motor Company, Farmland Industries and Wilcox Electric. In the
immediate Excelsior Springs area, the largest employers are American Italian
Pasta, Precise Technology Incorporated, Douglas & Lomason and Gilmour
Manufacturing.
The Bank's business and operating results are significantly affected by the
general economic conditions present in the Bank's market area. As of April
1996, the latest date for which statistical data are available, the unemployment
rate in Clay County was 2.6% and the unemployment rate in Ray County was 3.5%.
The Bank faces significant competition in attracting deposits from
commercial banks, other savings institutions and credit unions. The Bank faces
additional competition for deposits from short-term money market funds, from
other corporate and government securities funds and from brokerage funds and
insurance companies. The Bank also faces significant competition in the
origination of loans from savings institutions, mortgage banking companies,
credit unions and commercial banks. In Clay County alone, where the Bank's two
offices are located, there are 36 commercial banks, 44 credit unions, and 10
savings institutions.
47
<PAGE>
LENDING ACTIVITIES
GENERAL. The Bank has emphasized and will continue to emphasize the
origination of one- to four-family residential mortgage loans. In recent years,
subject to market conditions, the Bank has emphasized the origination for
portfolio of ARM loans and the origination and sale of fixed-rate residential
mortgage loans. Due to the high level of construction activity in southern Clay
County in recent years, and in an effort to improve the yield on overall
interest-earning assets, the Bank has increased its portfolio of residential
construction loans. The Bank also originates land loans secured by vacant land
or building lots for which the borrower intends to ultimately construct a
residential property. The Bank also originates commercial real estate and multi-
family residential loans, which are generally offered on a case-by-case basis as
an accommodation to existing Bank customers. The Bank's non-mortgage loans
consist primarily of automobile loans, which are originated on a direct and on
an indirect basis.
Under OTS regulations, a thrift institution's loans-to-one borrower limit
is generally limited to the greater of 15% of unimpaired capital and surplus or
$500,000. See "Regulation - Federal Regulation of Savings Associations." At
March 31, 1996, the maximum amount which the Bank could have lent under this
limit to any one borrower and the borrower's related entities was approximately
$1.2 million. At March 31, 1996, the Bank had no loans or groups of loans to
related borrowers with outstanding balances in excess of this amount. The
Bank's largest lending relationship at March 31, 1996 was approximately $1.0
million in loans to a residential builder for the construction of single-family
residences and was secured by real estate located in Clay County, Missouri. At
March 31, 1996, all of these loans were performing in accordance with their
terms.
LOAN PORTFOLIO COMPOSITION. Set forth below is data relating to the
composition of the Bank's loan portfolio by type of loan as of the dates
indicated.
<TABLE>
<CAPTION>
At March 31, At June 30,
----------------- ------------------------------------
1996 1995 1994
----------------- ----------------- -----------------
Amount Percent Amount Percent Amount Percent
------- -------- ------- -------- ------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Real estate loans:
One- to four-family residential..... $52,471 61.00% $55,257 64.46% $39,001 67.32%
Multi-family........................ 321 0.37 134 0.16 163 0.28
Commercial.......................... 1,025 1.19 818 0.95 317 0.55
Land................................ 3,641 4.23 1,992 2.32 545 0.94
Construction........................ 17,888 20.80 16,221 18.93 7,857 13.56
------- ------ ------- ------ ------- ------
Total real estate loans.............. 75,346 87.59 74,422 86.82 47,883 82.65
------- ------ ------- ------ ------- ------
Consumer loans:
Direct automobile loans............. 6,452 7.50 6,426 7.50 5,240 9.05
Indirect automobile loans........... 2,302 2.68 2,960 3.45 3,090 5.33
Deposit accounts.................... 536 0.62 524 0.61 445 0.77
Home improvement.................... 236 0.27 279 0.33 292 0.50
Other............................... 1,150 1.34 1,107 1.29 985 1.70
------- ------ ------- ------ ------- ------
Total consumer loans............. 10,676 12.41 11,296 13.18 10,052 17.35
------- ------ ------- ------ ------- ------
Total loan portfolio............. 86,022 100.00% 85,718 100.00% 57,935 100.00%
====== ====== ======
Less:
Loans in process.................... 8,143 6,391 4,068
Deferred loan origination fees and
discounts on loans, net........... 259 221 251
Allowance for loan losses........... 347 226 163
------- ------- -------
Total loans receivable, net....... $77,273 $78,880 $53,453
======= ======= =======
</TABLE>
48
<PAGE>
The following table shows the composition of the Bank's loan portfolio by
fixed- and adjustable-rates at the dates indicated.
<TABLE>
<CAPTION>
At March 31, At June 30,
---------------------- -----------------------------------
1996 1995 1994
---------------------- ----------------- ----------------
Amount Percent Amount Percent Amount Percent
------------ -------- ------- -------- ------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Fixed Rate Loans:
Real estate:
One- to four-family............. $ 6,887 8.01% $ 6,924 8.08% $ 4,458 7.70%
Multi-family.................... 34 0.04 44 0.05 64 0.11
Commercial...................... 80 0.09 -- -- -- --
Land............................ 312 0.36 280 0.33 145 0.25
Construction.................... 17,888 20.80 16,221 18.93 7,857 13.56
------- ------ ------- ------ ------- -------
Total real estate loans.......... 25,201 29.30 23,469 27.38 12,524 21.62
------- ------ ------- ------ ------- -------
Consumer loans.................... 10,469 12.17 11,296 13.18 10,052 17.35
------- ------ ------- ------ ------- -------
Total fixed-rate loans....... 35,670 41.47 34,765 40.56 22,576 38.97
------- ------ ------- ------ ------- -------
Adjustable Rate Loans:
Real estate:
One- to four-family............. $45,584 52.99% $48,333 56.39% $34,543 59.62%
Multi-family.................... 287 0.33 90 0.10 99 0.17
Commercial...................... 945 1.10 818 0.95 317 0.55
Land............................ 3,329 3.87 1,712 2.00 400 0.69
Construction.................... -- -- -- -- -- --
------- ------ ------- ------ ------- -------
Total real estate loans.......... 50,145 58.29 50,953 59.44 35,359 61.03
------- ------ ------- ------ ------- -------
Consumer loans.................... 207 0.24 -- -- -- --
------- ------ ------- ------ ------- -------
Total adjustable-rate loans.. 50,352 58.53 50,953 59.44 35,359 61.03
------- ------ ------- ------ ------- -------
Total loan portfolio......... 86,022 100.00% 85,718 100.00% 57,935 100.00%
====== ====== =======
Less:
Loans in process................ 8,143 6,391 4,068
Deferred fees and discounts..... 259 221 251
Allowance for losses............ 347 226 163
------- ------- -------
Total loans receivable, net... $77,273 $ 78,880 $53,453
======= ======= =======
</TABLE>
ONE- TO FOUR-FAMILY MORTGAGE LOANS. The Bank's primary lending activity is
the origination of one- to four-family, owner-occupied, residential mortgage
loans secured by property located in the Bank's market area. Loans are generated
through the Bank's marketing efforts, its existing customers and referrals, real
estate brokers, builders and local businesses. The Bank also employs its
Chairman of the Board as a full-time loan originator to solicit loans. The Bank
generally has limited its real estate loan originations to the financing of
properties located within its market area and will not make out-of-state loans.
At March 31, 1996, the Bank had $52.5 million, or 61.0% of its loan portfolio,
invested in mortgage loans secured by one- to four-family residences.
The Bank originates fixed-rate residential one- to four-family loans with
terms of 15 and 30 years. Such loans may either be retained in portfolio or
sold in the secondary mortgage market depending on the yield on such loans and
the Bank's asset/liability management objectives. Currently, the Bank's policy
is to sell into the secondary market fixed-rate residential real estate loans.
As of March 31, 1996, $6.9 million, or 8.0% of the Bank's loan portfolio,
consisted of fixed-rate residential one- to four-family loans. The Bank's
fixed-rate mortgage loans amortize monthly with principal and interest due each
month. Residential real estate loans often remain outstanding for significantly
shorter periods than their contractual terms because borrowers may refinance or
prepay loans at their option.
49
<PAGE>
Fixed-rate residential one- to four-family loans originated for sale in the
secondary mortgage market are underwritten in conformity with the criteria
established by the Federal Home Loan Mortgage Corporation ("FHLMC") for sale
primarily to FHLMC. Such loans are sold on a non-recourse basis. The Bank
retains servicing rights on a portion of such loans, depending upon customer
preferences and competitive conditions. For the nine months ended March 31,
1996, of the $14.3 million in fixed-rate residential one- to four-family loans
originated by the Bank, $12.6 million of such loans, or 88.1%, were sold in the
secondary mortgage market.
The Bank also offers ARM loans for terms ranging up to 30 years. The Bank
currently offers ARM loans that adjust every year, with interest rate adjustment
limitations up to two percentage points per year and with a cap of up to six
percentage points on total interest rate increases over the life of the loan,
although a majority of the ARM loans in the Bank's portfolio have adjustment
limitations of one percentage point and five percentage point interest rate
caps. In a rising interest rate environment, such rate limitations may prevent
ARM loans from repricing to market interest rates, which would have an adverse
effect on net interest income. The Bank has used different interest indices for
ARM loans in the past, and currently uses the one year U.S. Treasury Index
adjusted to a constant maturity, with margins of 275 basis points for agency-
conforming ARM loans and 300 basis points for non-conforming ARM loans. ARM
loans secured by residential one- to four-family real estate totaled $45.6
million, or 53.0% of the Bank's total loan portfolio at March 31, 1996. The
origination of fixed-rate mortgage loans versus ARM loans is monitored on an
ongoing basis and is affected significantly by the level of market interest
rates, customer preference, the Bank's interest rate gap position and loan
products offered by the Bank's competitors. Particularly in a relatively low
interest rate environment, borrowers may prefer fixed-rate loans to ARM loans.
During the nine months ended March 31, 1996, the Bank originated $14.3 million
in fixed-rate residential mortgage loans and $4.5 million of ARM loans. During
1995, the Bank originated $6.6 million of fixed-rate residential mortgage loans
and $19.7 million of ARM loans.
The primary purpose of offering ARM loans is to make the Bank's loan
portfolio more interest rate sensitive. However, as the interest income earned
on ARM loans varies with prevailing interest rates, such loans do not offer the
Bank predictable cash flows as would long-term, fixed-rate loans. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Asset and Liability Management. ARM loans carry increased credit
risk associated with potentially higher monthly payments by borrowers as general
market interest rates increase. It is possible, therefore, during periods of
rising interest rates, that the risk of delinquencies and defaults on ARM loans
may increase due to the upward adjustment of interest costs to the borrower,
resulting in increased loan losses.
The Bank's residential first mortgage loans customarily include due-on-sale
clauses, which are provisions giving the Bank the right to declare a loan
immediately due and payable in the event, among other things, that the borrower
sells or otherwise disposes of the underlying real property serving as security
for the loan. Due-on-sale clauses are a means of imposing assumption fees and
increasing the interest rate on the Bank's mortgage portfolio during periods of
rising interest rates.
Regulations limit the amount that a savings association may lend relative
to the appraised value of the real estate securing the loan, as determined by an
appraisal at the time of loan origination. Such regulations permit a maximum
loan-to-value ("LTV") ratio of 95% for residential property (and 100% for loans
guaranteed by the Veterans Administration) and 90% for all other real estate
loans. The Bank's lending policies, however, generally limit the maximum LTV
ratio on fixed-rate and ARM loans to 80% of the lesser of the appraised value or
the purchase price of the property securing the loan in the case of loans
secured by one- to four-family owner-occupied properties. On conventional one-to
four-family loans, the Bank will lend up to a 95% LTV ratio; however, any loans
with LTV ratios in excess of 80% require private mortgage insurance. The maximum
LTV ratio on other types of real estate loans is generally the lesser of 80% of
the appraisal value or the purchase price of the property.
When underwriting residential real estate loans, the Bank reviews and
verifies each loan applicant's employment, income and credit history. The Bank's
policy is to obtain credit reports and financial statements on all borrowers and
guarantors, and to verify references. Properties securing real estate loans are
appraised by Bank-approved independent appraisers. Appraisals are subsequently
reviewed by the Bank's Loan Committee, as applicable.
50
<PAGE>
Management believes that stability of income, past credit history and adequacy
of the proposed security are integral parts in the underwriting process.
Generally, the applicant's total monthly mortgage payment, including all escrow
amounts, is limited to 28% of the applicant's total monthly income. In addition,
total monthly obligations of the applicant, including mortgage payments, should
not generally exceed 36% of total monthly income. Written appraisals are always
required on real estate property offered to secure an applicant's loan. The Bank
requires fire and casualty insurance on all properties securing real estate
loans, as well as title insurance.
CONSTRUCTION AND LAND LENDING. The Bank invests a significant proportion of
its loan portfolio in construction and land loans. Prompted by increased
residential development in Clay County in recent years, such lending has been a
growing part of the Bank's loan portfolio. Substantially all of the Bank's
construction and land loans are secured by residential properties located in
Clay County.
The Bank originates four basic types of construction and land loans:
1. "Speculative" construction loans are made to home builders for the
construction principally of one- to four-family residences and
residential development projects and, to a lesser extent, multi-family
residences (primarily duplexes). Speculative construction loans
generally do not have a sale contract or permanent loan in place for
the finished home, and the purchasers for the finished homes may be
identified either during or following the construction period.
2. "Contract" construction loans are made to builders who have a signed
contract to build a new home.
3. "Construction" loans are made to individuals who have contracted with
a builder to construct their personal residence.
4. "Land acquisition" loans ("land loans") are made by the Bank to
individuals and builders for the acquisition of land upon which the
borrower can then build.
The table below presents information on the Bank's construction and land
loans at March 31, 1996:
<TABLE>
<CAPTION>
Outstanding Percent of
Loan Balance/(1)/ Total
------------ ----------
(Millions)
<S> <C> <C>
\\ Speculative.............................. $12,259 57.0%
Contract................................. 2,010 9.3
Construction............................. 3,619 16.8
------- -------
Total construction....................... 17,888 83.1
Land..................................... 3,641 16.9
------- -----
Total construction and land.............. $21,529 100.0%
======= =======
</TABLE>
_____________________
/(1)/Includes loans in process.\\
At March 31, 1996, the Bank's $17.9 million of construction loans and $3.6
million of land loans represented 20.8% and 4.2%, respectively, of total loans
receivable. At the same time, the Bank's $12.3 million of speculative
construction loans represented 14.3% of total loans receivable.
Construction and land lending affords the Bank the opportunity to achieve
higher interest rates and fees with shorter terms to maturity than does its
single-family permanent mortgage lending. Construction and land lending,
however, is generally considered to involve a higher degree of risk than single-
family permanent mortgage lending due to (i) the concentration of principal
among relatively few borrowers and development projects, (ii) the increased
51
<PAGE>
difficulty at the time the loan is made of estimating building costs and the
selling price of the residence to be built, (iii) the increased difficulty and
costs of monitoring the loan, (iv) the higher degree of risk associated with
residential sales activity in changing real estate market conditions, and (v)
the increased difficulty of working out problem loans. Speculative construction
loans have the added risk associated with identifying an end-purchaser for the
finished home. See "Risk Factors -Construction and Land Lending." The Bank has
sought to address these risks by developing and adhering to underwriting
policies, disbursement procedures, and monitoring practices.
The Bank seeks to make construction loans to those builders with which it
has a long-standing history of satisfactory performance. New builders typically
borrow from the Bank in limited amounts and may borrow additional amounts based
on proven experience with the Bank. At March 31, 1996, the Bank had one borrower
for which speculative construction loans outstanding totaled more than $1.0
million. The foregoing builder with speculative construction and land loans
totaling more than $1.0 million has been a customer of the Bank for more than
two years.
While substantially all of the Bank's construction and land loans are
secured by properties located in southern Clay County, the Bank also seeks to
diversify its construction and land lending risks among several subdivisions. At
March 31, 1996, the Bank had speculative construction loans secured by
properties in 61 subdivisions of which two represented an exposure to a single
subdivision of more than $1.0 million.
One- to Four-Family Construction Loans. Loans for the construction of one-
to four-family residences are generally made for terms of six to 12 months. The
Bank's loan policy includes maximum loan-to-value ratios of up to 85% for
speculative construction loans and up to 80% for construction loans. Prior to
preliminary approval of a construction loan application, Bank personnel inspect
the site, review the existing or proposed improvements, identify the market for
the proposed project, analyze the pro forma data and assumptions on the project,
and satisfy themselves with the experience and expertise of the builder. After
preliminary approval has been given, the application is processed. Processing
includes obtaining credit reports, financial statements and tax returns on the
borrowers and guarantors, if any, an independent appraisal of the project, and
any other expert reports necessary to evaluate the proposed project.
The Bank requires that construction loan proceeds be disbursed in
increments as construction progresses based upon inspections by Bank personnel.
To control the disbursement process, the Bank requires that builders and their
subcontractors and vendors submit invoices to the Bank for payment. In the event
of cost overruns, depending on the circumstances (i.e., whether due to "add-ons"
not included in the original plans or due to unanticipated changes in building
costs) the Bank may seek to require the borrower to deposit funds with the Bank
for additional disbursements, increase the loan amount on the basis of an
increased appraisal and disburse additional loan proceeds consistent with the
original loan-to-value ratio, or become more active in the monitoring and
progress of the project.
The Bank regularly monitors the accuracy of assumptions made in its
construction loan business over time. In particular, the Bank tracks the
accuracy of its independent appraisers by comparing actual selling prices with
the appraised value estimated in connection with the loan approval.
Additionally, the Bank tracks the performance of its builder customers by
comparing actual costs with those estimated in the loan application.
Commercial and Multi-family Construction Loans. Occasionally, the Bank
originates loans for the construction of commercial buildings and multi-family
residences on terms similar to those on one- to four-family construction loans.
Land Loans. At March 31, 1996, the Bank had total land loans of $3.6
million. In making land loans, the Bank follows similar underwriting policies as
for construction loans. The Bank originates land loans with similar terms and at
similar rates as construction loans, except that the initial term on
conventional land loans is typically five to ten years (not to exceed 30 years)
as opposed to the term of up to 12 months that is typical of construction loans.
52
<PAGE>
MULTI-FAMILY AND COMMERCIAL REAL ESTATE LENDING. The Bank also originates
loans secured by multi-family and commercial real estate. At March 31, 1996,
$1.3 million, or 1.6%, of the Bank's loan portfolio consisted of multi-family
loans and commercial real estate loans.
Multi-family and commercial real estate loans originated by the Bank may be
either fixed- or adjustable-rate loans with terms to maturity and amortization
schedules of up to 30 years. Rates on such ARM loans generally adjust annually
to specified spreads over the one-year U.S. Treasury securities index adjusted
to a constant maturity of one year, subject to annual and life-of-loan interest
rate caps. Multi-family and commercial real estate loans are written in amounts
of up to 80% of the lesser of the appraised value of the property or the sales
price.
The Bank's commercial real estate portfolio consists primarily of loans on
small office buildings located in the Bank's primary market area. Multi-family
loans generally are secured by duplexes. Appraisals on properties which secure
multi-family and commercial real estate loans are performed by an independent
appraiser designated by the Bank before the loan is made. All appraisals on
multi-family and commercial real estate loans are reviewed by the Bank's
management. In underwriting such loans, the Bank primarily considers the cash
flows generated by the real estate to support the debt service, the financial
resources and income level of the borrower and the Bank's experience with the
borrower. In addition, the Bank's underwriting procedures require verification
of the borrower's credit history, an analysis of the borrower's income,
financial statements and banking relationships, a review of the borrower's
property management experience and references, and a review of the property,
including cash flow projections and historical operating results. The Bank seeks
to ensure that the property securing the loans will generate sufficient cash
flow to adequately cover operating expenses and debt service payments.
Multi-family and commercial real estate lending affords the Bank an
opportunity to receive interest at rates higher than those generally available
from one- to four-family residential lending. Nevertheless, loans secured by
such properties are generally larger, more difficult to evaluate and monitor
and, therefore generally, involve a greater degree of risk than one- to four-
family residential mortgage loans. Because payments on loans secured by
commercial real estate and multi-family properties are often dependent on the
successful operation or management of the properties, repayment of such loans
may be subject to adverse conditions in the real estate market or the economy.
If the cash flow from the project is reduced, the borrower's ability to repay
the loan might be impaired. The Bank has attempted to minimize these risks by
lending primarily to the ultimate user of the property or on existing income-
producing properties.
CONSUMER LENDING. Community Bank offers a variety of consumer loans,
including automobile and home improvement loans, second mortgage home equity
loans, lines of credit secured by first or second mortgage loans, and loans
secured by deposits. The Bank currently originates substantially all of its
consumer loans in its primary market area generally to its existing customers.
At March 31, 1996, the Bank's consumer loan portfolio totaled $10.7 million, or
12.4% of its loan portfolio.
The primary component of the Bank's consumer loan portfolio consists of
automobile loans secured by both new and used cars and light trucks. The Bank
originates automobile loans on a direct basis, where the Bank extends credit
directly to the borrower, and on an indirect basis through automobile
dealerships. Although applications for indirect automobile loans are taken by
employees of the dealer, the loans are made pursuant to the Bank's underwriting
standards using the Bank's documentation. All such indirect automobile loans
must be approved by a Bank loan officer before disbursement of loan proceeds.
The Bank seeks to limit the credit risk of indirect automobile lending by doing
business with local dealers with which it has had a satisfactory prior
relationship, and through strict adherence to its underwriting standards.
The Bank's automobile loans generally have terms that do not exceed five
years and carry a fixed-rate of interest. Generally, loans on new vehicles are
made in amounts up to 80% of dealer cost and loans on used vehicles are made in
amounts up to 80% of the vehicle's published NADA value. Collision and
comprehensive insurance and vendor single-interest coverage is required on all
automobile loans. At March 31, 1996, the Bank's indirect
53
<PAGE>
automobile loans totaled $2.3 million, or 2.7% of the Bank's loan portfolio and
direct automobile loans totalled $6.5 million, or 7.5% of the Bank's loan
portfolio.
Community Bank also originates Federal Housing Administration ("FHA") Title
I home improvement loans. Generally, such loans have a maximum term of ten
years, have fixed rates and may be originated up to a 100% loan-to-value ratio.
While the Bank retains a portion of such loans in portfolio, the majority of its
FHA Title I home improvement loans are originated for sale in the secondary
market. At March 31, 1996, the Bank's FHA Title I home improvement loans totaled
$210,000, or 0.2% of the Bank's loan portfolio.
The Bank also originates for portfolio second mortgage/home equity loans.
These loans are generally limited to 80% or less of the appraised value of the
property securing the loan. These loans are originated as fixed-rate loans and
generally have maximum terms of 15 years. At March 31, 1996, the Bank's second
mortgage/home equity loans totaled $732,000, or 0.9% of the Bank's loan
portfolio.
The Bank also originates for portfolio lines of credit secured by first or
second mortgages. Such loans are adjustable-rate loans, adjust annually, and may
be originated up to an 80% loan-to-value ratio, with a maximum term of five
years. At March 31, 1996, the Bank's lines of credit secured by first or second
mortgages totaled $1.2 million, or 1.5% of the Bank's loan portfolio.
Consumer loan terms vary according to the type and value of collateral,
length of contract and creditworthiness of the borrower. The underwriting
standards employed by the Bank for consumer loans include an application, a
determination of the applicant's payment history on other debts and an
assessment of ability to meet existing obligations and payments on the proposed
loan. Although creditworthiness of the applicant is a primary consideration, the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount.
Consumer loans entail greater credit risk than do residential mortgage
loans, particularly in the case of consumer loans which are unsecured or are
secured by rapidly depreciable assets, such as automobiles. Further, any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the outstanding loan balance as a result of the greater
likelihood of damage, loss or depreciation. In addition, consumer loan
collections are dependent on the borrower's continuing financial stability, and
thus are more likely to be affected by adverse personal circumstances.
Furthermore, the application of various federal and state laws, including
bankruptcy and insolvency laws, may limit the amount which can be recovered on
such loans. At March 31, 1996, $32,000 in consumer loans were non-performing.
See "Asset Quality--Delinquent Loans and Non-performing Assets." There can be no
assurances, however, that delinquencies will not increase in the future.
54
<PAGE>
LOAN MATURITY SCHEDULE
The following schedule illustrates the contractual maturity and weighted
average rates of the Bank's total loan portfolio at June 30, 1995. Mortages
which have adjustable or renegotiable interest rates are shown as maturing in
the period during which the contract is due. The schedule does not reflect the
effects of scheduled payments, possible prepayments or enforcement of due-on-
sale clauses. The total amount of loans due after June 30, 1996 that have
predetermined interest rates is $16.5 million, and that have floating or
adjustable rates is $49.8 million.
<TABLE>
<CAPTION>
Real Estate
---------------------------------------------------------------------------------------------
Multi-Family
One- to Four-Family and Commercial Land Construction
------------------- ---------------- ----------------------------------------------------
Weighted Weighted Weighted Weighted
Average Average Average Average
Amount Rate Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ ---- ------ ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Due During Years Ending June 30,
- --------------------------------
1996............................. $ 445 8.48% $ -- --% $ 264 8.23% $16,221 7.03%
1997............................. 131 9.60 -- -- 3 8.50 -- --
1998............................. 212 7.41 48 9.00 8 8.45 -- --
1999 and 2000.................... 777 8.01 84 8.19 25 9.68 -- --
2001 to 2005..................... 3,847 7.99 149 8.65 132 8.28 -- --
2006 to 2020..................... 20,117 7.70 239 8.76 587 8.50 -- --
2021 and following............... 29,728 7.14 432 7.19 973 8.47 -- --
------- ------ ------ -------
$55,257 7.43 $ 952 7.99 $1,992 8.45 $16,221 7.03
======= ====== ====== =======
<CAPTION>
Consumer Total
---------------- ---------------
Weighted Weighted
Average Average
Amount Rate Amount Rate
------ ---- ------ ----
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Due During Years Ending June 30,
- --------------------------------
1996............................. $ 2,482 9.61% $19,412 7.41%
1997............................. 1,301 10.91 1,435 10.79
1998............................. 2,561 10.05 2,829 9.83
1999 and 2000.................... 4,780 9.49 5,666 9.26
2001 to 2005..................... 161 10.27 4,289 8.11
2006 to 2020..................... 11 11.51 `20,954 7.74
2021 and following............... -- -- 31,133 7.18
------- -------
$11,296 9.82 $85,718 7.70
======= =======
</TABLE>
55
<PAGE>
ORIGINATION OF LOANS
Loan originations are developed from continuing business with depositors
and borrowers, soliciting realtors, builders, walk-in customers and third-party
sources. The Bank also employs its Chairman of the Board as a full-time loan
originator to solicit loans. The Board of Directors of the Bank has authorized
certain officers to originate loans within specified underwriting limits. Each
of the Chief Executive Officer and the Mortgage Lending Officer have authority
to make secured real estate loans up to $203,000 and secured installment loans
up to $30,000. Unsecured installment loans may be approved by the Chief
Executive Officer up to $15,000 and by the Mortgage Lending Officer up to
$10,000. All loans in excess of these limitations must be approved by the Board
of Directors. The Bank has established a Loan Audit Committee which reviews
loans made or denied by officers of the Bank. The Loan Audit Committee meets
monthly and consists of the Chief Executive Officer as well as three members of
the Board of Directors.
While the Bank originates both adjustable-rate and fixed-rate loans, its
ability to originate loans to a certain extent is dependent upon the relative
customer demand for loans in its market, which is affected by the interest rate
environment, among other factors. For the nine months ended March 31, 1996, the
Bank originated $38.5 million in fixed-rate loans and $7.4 million in
adjustable-rate loans. For the year ended June 30, 1995, the Bank originated
$37.7 million in fixed-rate loans and $21.3 million in adjustable-rate loans.
In recent years, the Bank has not purchased loans. For the nine months
ended March 31, 1996 and for the year ended June 30, 1995, the Bank purchased no
loans. The Bank has recently expanded its mortgage banking operations and
expects such operations to expand further in the future. For the nine months
ended March 31, 1996, the Bank sold $12.6 million in conforming residential one-
to four-family loans, compared to $1.2 million for the nine months ended March
31, 1995. The residential loans sold by the Bank are fixed-rate residential
loans with maturities of 15 and 30 years.
Set forth below is a table showing the Bank's loan originations, sales and
repayments for the periods indicated.
<TABLE>
<CAPTION>
Nine Months
Ended March 31, Year Ended June 30,
----------------------- --------------------------
1996 1995 1995 1994
-------- -------- --------- ---------
(In Thousands)
<S> <C> <C> <C> <C>
Originations by type:
Adjustable rate:
Real estate -
One- to four-family residential......... $ 4,499 $ 15,759 $ 19,693 $ 8,305
Multi-family............................ 52 -- -- --
Commercial.............................. 383 252 382 89
Land.................................... 2,247 817 1,176 379
Consumer................................. 187 -- -- --
-------- --------- --------- ---------
Total adjustable rate..................... 7,368 16,828 21,251 8,773
-------- --------- --------- ---------
Fixed rate:
Real estate -
One- to four-family residential......... 14,333 2,865 6,605 16,776
Land.................................... 126 156 198 151
Construction............................ 17,755 14,685 19,903 9,509
Consumer................................. 6,305 7,809 10,956 10,169
-------- --------- --------- ---------
Total fixed rate.......................... 38,519 25,515 37,662 36,605
-------- --------- --------- ---------
Total loans originated.................... 45,887 42,343 58,913 45,378
Sales and Repayments:
Real Estate -
One- to four-family residential.......... 12,561 1,156 4,721 15,809
-------- --------- --------- ---------
Total loans sold......................... 12,561 1,156 4,721 15,809
Principal repayments...................... 33,022 19,629 26,409 19,913
-------- --------- --------- ---------
Total sales and repayments............... 45,583 20,785 31,130 35,722
Decrease (increase) in other items, net.... (1,911) (2,558) (2,356) (2,927)
-------- --------- --------- ---------
Net (decrease) increase.................. $ (1,607) $ 19,000 $ 25,427 $ 6,729
======== ========= ========= =========
</TABLE>
56
<PAGE>
ASSET QUALITY
The Bank's collection procedures provide that when a loan is past due, a
first notice is sent to the borrower requesting payment ten days (for consumer
loans) and 16 days (for real estate loans) after the due date. A second notice
is sent 16 days (for consumer loans) and 30 days (for real estate) after the due
date. At the time of the second notice, phone calls are made by the Bank with
personal letter backups. If the loan remains delinquent for 30 days, a telephone
contact is made. If the loan becomes 60 days delinquent, a right-to-cure letter
generally is sent and the borrower is notified of the availability of financial
or counseling aid. If consumer loans are not resolved by 90 days, the account is
put on non-accrual status and repossession and/or legal action is normally
initiated. If a real estate loan is past due 60 days or more, the loan is
presented to the Board of Directors for future disposition. In most cases, the
Board of Directors authorizes the initiation of foreclosure proceedings. At
March 31, 1996, and at June 30, 1995 and 1994 the percentage of total loans
delinquent 90 days or more to net loans receivable were 0.42%, 0.21% and 0.71%,
respectively.
DELINQUENT LOANS AND NON-PERFORMING ASSETS. Loans are reviewed on a
regular basis and are placed on a non-accrual status when, in the opinion of
management, the collection of additional interest is doubtful. Mortgage loans
are placed on non-accrual status when principal is 90 days or more past due.
Interest accrued and unpaid at the time a loan is placed on non-accrual status
is charged against interest income. The loan will remain on non-accrual status
until the loan is brought current.
Real estate acquired through foreclosure or by deed-in-lieu of foreclosure
is classified as real estate owned until such time as it is sold. When real
estate owned is acquired, it is recorded at the lower of the unpaid principal
balance of the related loan, or its fair market value, less estimated selling
expenses. Any further write-down of real estate owned is charged against
earnings. At March 31, 1996, the Bank has no property classified as real estate
owned.
The following table sets forth information with respect to the Bank's
delinquent loans at March 31, 1996.
<TABLE>
<CAPTION>
Loans Delinquent For
------------------------------------------------------------------
60-89 Days 90 Days and Over Total Delinquent Loans
------------------------------- -------------------------------- --------------------------------
Percent Percent Percent
of Loan of Loan of Loan
Number Amount Category Number Amount Category Number Amount Category
-------- -------- --------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
One- to four-family....... 10 $ 733 1.40% 5 $ 285 0.54% 15 $ 1,018 1.94%
Consumer.................. 10 61 0.57 6 24 0.23 16 85 0.80
------- ------- ------- -------- ------- --------
Total.................... 20 $ 794 1.03 11 $ 309 0.40 31 $ 1,103 1.43
======= ======= ======= ======== ======= ========
</TABLE>
57
<PAGE>
The following table sets forth information regarding non-performing loans
and real estate owned by the Bank at the dates indicated. As of the dates
indicated, the Bank did not have any material restructured loans within the
meaning of SFAS No. 15.
<TABLE>
<CAPTION>
At March 31, At June 30,
-----------------------
1996 1995 1994
--------------- ----------- ----------
(Dollars In Thousands)
<S> <C> <C> <C>
Non-accruing loans:
One- to four-family............................ $ 70 $ 81 $ 221
Consumer....................................... 25 52 53
------- ------- -------
Total....................................... 95 133 274
------- ------- -------
Accruing loans delinquent more than 90 days:/(1)/
One- to four-family............................ 215 17 --
Consumer....................................... 7 -- 8
------- ------- -------
Total....................................... 222 17 8
------- ------- -------
Foreclosed assets:
One- to four-family............................ -- -- 68
Land........................................... -- -- 13
Consumer....................................... 11 12 16
------- ------- -------
Total....................................... 11 12 97
------- ------- -------
Total non-performing assets........................ $ 328 $ 162 $ 379
======= ======= =======
Total loans delinquent 90 days or more
to net loans receivable.......................... 0.41% 0.19% 0.53%
======= ======== ========
</TABLE>
_______________________
/(1)/These loans are not currently delinquent 90 days or more with respect to
principal, but are delinquent with respect to late fees or interest.
For the nine months ended March 31, 1996 and the fiscal year ended June 30,
1995, gross interest income which would have been recorded had the non-accruing
loans been current in accordance with their original terms amounted to $6,000
and $11,000, respectively. The amount that was included in interest income on
such loans was $6,000 and $7,000 for the nine months ended March 31, 1996 and
the fiscal year ended June 30, 1995, respectively.
CLASSIFIED ASSETS. Federal regulations provide for the classification of
loans and other assets, such as debt and equity securities, considered by the
OTS to be of lesser quality, as "substandard," "doubtful" or "loss." An asset is
considered "substandard" if it is inadequately protected by the current net
worth and paying capacity of the obligor or the collateral pledged, if any.
"Substandard" assets include those characterized by the "distinct possibility"
that the insured institution will sustain "some loss" if the deficiencies are
not corrected. Assets classified as "doubtful" have all of the weaknesses
inherent in those classified "substandard" with the added characteristic that
the weaknesses present make "collection or liquidation in full" on the basis of
currently existing facts, conditions and values, "highly questionable and
improbable." Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted.
When an insured institution classifies problem assets as either substandard
or doubtful, it may establish general allowances for losses in an amount deemed
prudent by management. General allowances represent loss
58
<PAGE>
allowances which have been established to recognize the inherent risk associated
with lending activities, but which, unlike specific allowances, have not been
allocated to particular problem assets. When an insured institution classifies
problem assets as "loss," it is required either to establish a specific
allowance for losses equal to 100% of that portion of the asset so classified or
to charge-off such amount. An institution's determination as to the
classification of its assets and the amount of its valuation allowances is
subject to review by the regulatory authorities, who may order the establishment
of additional general or specific loss allowances.
In connection with the filing of its periodic reports with the OTS and in
accordance with its classification of assets policy, the Bank reviews loans in
its portfolio monthly to determine whether such assets require classification in
accordance with applicable regulations. On the basis of management's review of
its assets, at March 31, 1996, the Bank had classified a total of $60,000 of its
assets as substandard. At March 31, 1996 the Bank had no assets classified as
doubtful or as loss. At March 31, 1996, total classified assets comprised
$60,000, or 0.76% of the Bank's capital and 0.07% of the Bank's total assets.
OTHER LOANS OF CONCERN. In addition to the non-performing loans set forth
in the tables above, as of March 31, 1996, there were no loans classified by the
Bank with respect to which known information about the possible credit problems
of the borrowers or the cash flows of the security properties have caused
management to have some doubts as to the ability of the borrowers to comply with
present loan repayment terms and which may result in the future inclusion of
such items in the non-performing asset categories.
ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established
through a provision for loan losses based on management's evaluation of the risk
inherent in its loan portfolio and changes in the nature and volume of its loan
activity, including those loans which are being specifically monitored by
management. Such evaluation, which includes a review of loans for which full
collectibility may not be reasonably assured, considers among other matters, the
loan classifications discussed above, the estimated fair value of the underlying
collateral, economic conditions, historical loan loss experience, the amount of
loans outstanding and other factors that warrant recognition in providing for an
adequate loan loss allowance.
Real estate properties acquired through foreclosure are recorded at the
lower of cost or fair value minus estimated cost to sell. If fair value at the
date of foreclosure is lower than the balance of the related loan, the
difference will be charged-off to the allowance for loan losses at the time of
transfer. Valuations are periodically updated by management and if the value
declines, a specific provision for losses on such property is established by a
charge to operations. At March 31, 1996, the Bank had no properties which were
acquired through foreclosure.
Although management believes that it uses the best information available to
determine the allowance, unforeseen market conditions could result in
adjustments and net earnings could be significantly affected if circumstances
differ substantially from the assumptions used in making the final
determination. Future additions to the Bank's allowance for loan losses will be
the result of periodic loan, property and collateral reviews and thus cannot be
predicted in advance. In addition, federal regulatory agencies, as an integral
part of the examination process, periodically review the Bank's allowance for
loan losses. Such agencies may require the Bank to increase the allowance based
upon their judgment of the information available to them at the time of their
examination. At March 31, 1996, the Bank had a total allowance for loan losses
of $347,000, representing 109.46% of total non-performing loans and 0.45% of the
Bank's loans receivable, net. See Note 1 of the Notes to Consolidated Financial
Statements.
59
<PAGE>
The following table sets forth the allocation for loan losses by category
for the periods indicated.
<TABLE>
<CAPTION>
At At June 30,
-------------------------------------------------------------
March 31, 1996 1995 1994
----------------------------------- ------------------------------ -----------------------------
Percent Percent Percent
of Loans of Loans of Loans
Loan in Each Loan in Each Loan in Each
Amount of Amounts Category Amount of Amounts Category Amount of Amounts Category
Loan Loss by to Total Loan Loss by to Total Loan Loss by to Total
Allowance Category Loans Allowance Category Loans Allowance Category Loans
--------- -------- -------- --------- -------- --------- --------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One- to four-family.......... $ 30 $ 52,471 61.00% $ 34 $ 55,257 64.46% $ 28 $ 39,001 67.32%
Multi-family................. 1 321 0.37 1 134 0.16 1 163 0.28
Commercial real estate....... 6 1,025 1.19 4 818 0.95 2 317 0.55
Land......................... 21 3,641 4.23 8 1,992 2.32 3 545 0.94
Construction or development.. 149 17,888 20.80 58 16,221 18.93 29 7,857 13.56
Consumer..................... 140 10,676 12.41 121 11,296 13.18 100 10,052 17.35
------- -------- ------- ------ -------- -------- ------ -------- --------
Total................... $ 347 $ 86,022 100.00% $ 226 $ 85,718 100.00% $ 163 $ 57,935 100.00%
======= ======== ======= ====== ======== ======== ====== ======== ========
</TABLE>
60
<PAGE>
The following table sets forth information with respect to the Bank's
allowance for loan losses for the periods indicated.
<TABLE>
<CAPTION>
Nine Months
Ended March 31, Years Ended June 30,
----------------- ----------------------
1996 1995 1995 1994
-------- ------- ---------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Balance at beginning of period........................................ $ 226 $ 163 $ 163 $ 150
------- ------ ------
Charge-offs:
One- to four-family................................................. -- 10 10 8
Consumer............................................................ 91 147 161 40
------- ------ ------- ------
91 157 171 48
Recoveries:
Consumer............................................................ 24 56 63 28
------- ------ ------- ------
24 56 63 28
------- ------ ------- ------
Net charge-offs....................................................... 67 101 108 20
Provision for loan losses............................................. 188 143 171 33
------- ------ ------- ------
Balance at end of period.............................................. $ 347 $ 205 $ 226 $ 163
======= ====== ======= ======
Ratio of net charge-offs during the period
to average loans outstanding during the period....................... 0.11% 0.21% 0.16% 0.04%
======= ====== ======= ======
Ratio of allowance for loan loss to ending
loans receivable, net................................................ 0.45% 0.28% 0.29% 0.30%
======= ====== ======= ======
Ratio of allowance for loan loss to non-
performing assets at end of period................................... 105.79% 67.88% 139.51% 43.01%
======= ====== ======= ======
</TABLE>
61
<PAGE>
INVESTMENT ACTIVITIES
GENERAL. Community Bank must maintain minimum levels of investments that
qualify as liquid assets under OTS regulations. Liquidity may increase or
decrease depending upon the availability of funds and comparative yields on
investments in relation to the return on loans. Historically, the Bank has
generally maintained liquid assets at levels above the minimum requirements
imposed by the OTS regulations and at levels believed adequate to meet the
requirements of normal operations, including repayments of maturing debt and
potential deposit outflows. Cash flows projections are regularly reviewed and
updated to assure that adequate liquidity is maintained. At March 31, 1996, the
Bank's liquidity ratio (liquid assets as a percentage of net withdrawable
savings deposits and current borrowings) was 5.96%. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations -Liquidity and
Capital Resources" and "Regulation - Liquidity."
Federally chartered savings institutions have the authority to invest in
various types of liquid assets, including U.S. Treasury obligations, securities
of various federal agencies, certain certificates of deposit of insured banks
and savings institutions, certain bankers' acceptances, repurchase agreements
and federal funds. Subject to various restrictions, federally chartered savings
institutions may also invest their assets in commercial paper, investment grade
corporate debt securities and mutual funds whose assets conform to the
investments that a federally chartered savings institution is otherwise
authorized to make directly.
Generally, the investment policy of the Bank, as established by the Board
of Directors, is to invest funds among various categories of investments and
maturities based upon the Bank's liquidity needs, asset/liability management
policies, investment quality, marketability and performance objectives.
MORTGAGE-BACKED SECURITIES. The Bank purchases mortgage-backed securities
to supplement residential loan production and as part of its asset/liability
strategy. The type of securities purchased is based upon the Bank's
asset/liability management strategy and balance sheet objectives. The Bank has
invested primarily in federal agency securities, principally FHLMC and
Government National Mortgage Association ("GNMA") obligations. At March 31,
1996, the Bank's investment in mortgage-backed securities totaled $549,000, or
0.6% of its total assets. At March 31, 1996 and at June 30, 1995 and 1994, all
of the Bank's mortgage-backed securities were classified as held-to-maturity.
See Note 3 of the Notes to Consolidated Financial Statements .
The FHLMC and GNMA certificates are modified pass-through mortgage-backed
securities that represent undivided interests in underlying pools of fixed-rate,
or certain types of adjustable-rate, single-family residential mortgages issued
by these government-sponsored entities. As a result, the interest rate risk
characteristics of the underlying pool of mortgages, i.e., fixed rate or
adjustable rate, as well as prepayment risk, are passed on to the certificate
holder. FHLMC provides the certificate holder a guarantee of timely payments of
interest and ultimate collection of principal, whether or not they have been
collected. GNMA's guarantee to the holder of timely payments of principal and
interest is backed by the full faith and credit of the U.S. Government.
While mortgage-backed securities carry a reduced credit risk as compared to
whole loans, such securities remain subject to the risk that a fluctuating
interest rate environment, along with other factors such as the geographic
distribution of the underlying mortgage loans, may alter the prepayment rate of
such mortgage loans and so affect both the prepayment speed, and value, of such
securities.
Set forth below is a table showing the Bank's purchases, sales and
repayments of mortgage-backed securities for the periods indicated.
<TABLE>
<CAPTION>
Nine Months
Ended March 31, Year Ended June 30,
---------------------------- --------------------------
1996 1995 1995 1994
---------- ---------- --------- ----------
(In Thousands)
<S> <C> <C> <C> <C>
Purchases.................................................. $ -- $ -- $ -- $ --
Sales...................................................... (2,914) -- -- --
Repayments................................................. (407) (753) (965) (1,572)
---------- ---------- --------- ----------
Net increase (decrease).................................... $ (3,321) $ (753) $ (965) $ (1,572)
========== ========== ========= ==========
</TABLE>
62
<PAGE>
OTHER INVESTMENTS. At March 31, 1996, the Bank's investment securities
other than mortgage-backed securities consisted of federal agency obligations,
FHLB stock and other FHLB interest-earning assets. In addition, in recent years,
the Bank has also invested in certain mutual funds whose assets conform to the
investments that a federally-chartered saving institution is otherwise
authorized to make directly.
OTS regulations restrict investments in corporate debt and equity
securities by the Bank. These restrictions include prohibitions against
investments in the debt securities of any one issuer in excess of 15% of the
Bank's unimpaired capital and unimpaired surplus as defined by federal
regulations, plus an additional 10% if the investments are fully secured by
readily marketable collateral. At March 31, 1996, the Bank was in compliance
with this regulation. See "Regulation - Federal Regulation of Savings
Associations" for a discussion of additional restrictions on the Bank's
investment activities.
The following table sets forth the composition of the Bank's investment
securities, net of premiums and discounts, at the dates indicated. The Bank
adopted SFAS No. 115 on July 1, 1993. Investment securities with an original
maturity of less than five years are classified as available-for-sale and are
valued at fair value at March 31, 1996 and at June 30, 1995.
<TABLE>
<CAPTION>
At At
March 31, June 30,
---------------------- -----------------------------------------
1996 1995 1994
--------------------- ----------------- --------------------
Book % of Book % of Book % of
Value Total Value Total Value Total
--------- --------- ------ ------ -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Investment securities available-for-sale:
Federal agency obligations........................... $ 1,981 48.22% $ 1,962 31.12% $ 1,994 25.74%
Mutual funds......................................... -- -- 1,079 17.11 1,038 13.40
--------- --------- -------- ------ -------- -------
Subtotal............................................... 1,981 48.22 3,041 48.23 3,032 39.14
FHLB stock............................................. 811 19.74 795 12.61 521 6.72
--------- --------- -------- ------ -------- -------
Total investment securities and
FHLB stock......................................... 2,792 67.96 3,836 60.84 3,553 45.86
--------- --------- -------- ------ -------- -------
Other interest-earning assets:
FHLB certificates of deposit......................... -- -- -- -- 1,600 20.65
FHLB checking........................................ 1,316 32.04 2,417 38.34 1,078 13.91
FHLB daily time...................................... -- -- 52 0.82 1,517 19.58
--------- --------- -------- ------ -------- -------
Total other interest-earnings assets................ 1,316 32.04 2,469 39.16 4,195 54.14
--------- --------- -------- ------ -------- -------
Total investment portfolio............................. $ 4,108 100.00% $ 6,305 100.00% $ 7,748 100.00%
========= ========= ======== ======= ======== =======
Average remaining life of investment
securities available for sale........................ 1.17 years 1.92 years 2.92 years
</TABLE>
63
<PAGE>
INVESTMENT PORTFOLIO MATURITIES. The following table sets forth the
scheduled maturities, carrying values, market values and average yields for the
Bank's investment securities excluding FHLB stock at March 31, 1996.
<TABLE>
<CAPTION>
March 31, 1996
--------------------------------------------------------------------------------
Less than 1 to 5 5 to 10 Over
1 Year Years Years 10 Years Total Investment Securities
--------------- ---------- ---------- ---------- ---------------------------
Book Book Book Book Book Market
Value Value Value Value Value Value
--------------- ---------- ---------- ---------- ------------ -----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Federal agency obligations.................... $ 991 $ 990 $ -- $ -- $ 1,981 $ 1,981
--------- --------- -------- -------- -------- --------
Total investment securities................... $ 991 $ 990 $ -- $ -- $ 1,981 $ 1,981
========= ========= ======== ======== ======== ========
Weighted average yield........................ 4.73% 4.23% --% --% 4.48% 4.48%
</TABLE>
SOURCES OF FUNDS
GENERAL. The Bank's primary sources of funds are deposits, receipt of
principal and interest on loans and securities, FHLB advances, and other funds
provided from operations.
FHLB advances are used to support lending activities and to assist in the
Bank's asset/liability management strategy. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -Asset\Liability
Management." Typically, the Bank does not use other forms of borrowings. At
March 31, 1996, the Bank had $9.0 million in FHLB advances.
DEPOSITS. Community Bank offers a variety of deposit accounts having a
wide range of interest rates and terms. The Bank's deposits consist of passbook,
demand, NOW, money market deposit and certificate accounts. The certificate
accounts currently range in terms from 91 days to seven years.
The Bank relies primarily on advertising, competitive pricing policies and
customer service to attract and retain these deposits. Currently, Community Bank
solicits deposits from its market area only, and does not use brokers to obtain
deposits. The flow of deposits is influenced significantly by general economic
conditions, changes in money market and prevailing interest rates and
competition.
The Bank has become more susceptible to short-term fluctuations in
deposit flows as customers have become more interest-rate conscious. The Bank
endeavors to manage the pricing of its deposits in keeping with its
profitability objectives giving consideration to its asset/liability management.
Notwithstanding the foregoing, a significant percentage of the Bank's deposits
are for terms of less than one year. At March 31, 1996, $39.4 million, or 80.3%
of the Bank's certificates of deposit were in certificates of deposit with terms
of 12 months or less. The Bank believes that upon maturity most of these
deposits will remain at the Bank. The ability of the Bank to attract and
maintain savings accounts and certificates of deposit, and the rates paid on
these deposits, has been and will continue to be significantly affected by
market conditions.
64
<PAGE>
SAVINGS PORTFOLIO
The following table sets forth the dollar amount of savings deposits with
various types of deposit programs offered by the Bank at the periods indicated.
<TABLE>
<CAPTION>
At March 31, At June 30,
------------------------------------------------------
1996 1995 1994
-------------------------- ------------------------- -------------------------
Balance Percent Balance Percent Balance Percent
----------- ------------ ----------- ------------ ------------ ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Transactions and Savings
Deposits:
Passbook savings.......................... $ 3,656 5.38% $ 3,740 5.48% $ 3,952 6.57%
NOW accounts.............................. 7,919 11.66 7,601 11.13 7,619 12.66
Money market accounts..................... 5,778 8.51 5,874 8.61 8,178 13.59
Noninterest-bearing demand accouts........ 1,521 2.24 1,320 1.93 936 1.55
------- ------ ------- ------ ------- ------
Total non-certificates.................. 18,874 27.79 18,535 27.15 20,685 34.37
------- ------ ------- ------ ------- ------
Certificates:
2.00 - 3.99%.............................. 13 0.02 876 1.28 16,894 28.07
4.00 - 5.99%.............................. 37,675 55.47 19,118 28.00 19,812 32.92
6.00 - 7.99%.............................. 10,869 16.01 29,114 42.64 1,598 2.66
8.00 - 9.99%.............................. 485 0.71 631 0.93 868 1.44
10.00% & over............................. -- -- -- -- 323 0.54
------- ------ ------- ----- ------- ------
Total certificates...................... 49,042 72.21 49,739 72.85 39,495 65.63
------- ------ ------- ----- ------- ------
Total.............................. $67,916 100.00% $68,274 100.00% $60,180 100.00%
======= ====== ======= ====== ======= ======
</TABLE>
DEPOSIT ACTIVITY
The following table sets forth the deposit activities of the Bank for the
periods indicated:
<TABLE>
<CAPTION>
Nine Months
Ended March 31, Years Ended June 30,
---------------------- ------------------------
1996 1995 1995 1994
-------- -------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Opening balance................................. $ 68,274 $ 60,180 $ 60,180 $ 58,750
Deposits(1)..................................... 117,991 117,519 161,534 134,976
Withdrawals..................................... 120,345 112,572 155,498 135,252
Interest credited............................... 1,996 1,386 2,058 1,706
-------- -------- -------- --------
Ending balance.................................. $ 67,916 $ 66,513 $ 68,274 $ 60,180
======== ======== ======== ========
Net (decrease) increase......................... $ (358) $ 6,333 $ 8,094 $ 1,430
======== ======== ======== ========
Percent (decrease) increase..................... (0.52)% 10.52% 13.45% 2.43%
======== ======== ======== ========
</TABLE>
_____________________
(1) Does not reflect the rollover of certificates of deposit.
65
<PAGE>
TIME DEPOSIT MATURITY SCHEDULE
The following table shows rate and maturity information for the Bank's
certificates of deposit as of March 31, 1996.
<TABLE>
<CAPTION>
Percent
2.00-3.99% 4.00-5.99% 6.00-7.99% 8.00-9.99% Total of Total
---------- ---------- ---------- ---------- ----- --------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Certificate accounts
maturing in quarter ending:
- --------------------------
June 30, 1996................ $ -- $ 6,715 $ 8,110 $ 201 $15,026 30.64%
September 30, 1996........... -- 7,989 13 239 8,241 16.80
December 31, 1996............ -- 3,946 161 45 4,152 8.47
March 31, 1997............... -- 11,942 10 -- 11,952 24.37
June 30, 1997................ -- 1,041 -- -- 1,041 2.12
September 30, 1997........... -- 1,871 -- -- 1,871 3.82
December 31, 1997............ -- 880 -- -- 880 1.79
March 31, 1998............... -- 661 -- -- 661 1.35
June 30, 1998................ -- 874 15 -- 889 1.81
September 30, 1998........... -- 490 34 -- 524 1.07
December 31, 1998............ -- 157 97 -- 254 0.52
March 31, 1999............... -- 64 -- -- 64 0.13
Thereafter................... 13 574 2,900 -- 3,487 7.11
--------- ---------- ---------- ---------- ------- --------
Total....................... $ 13 $ 37,204 $ 11,340 $ 485 $49,042 $100.00%
========= ========== ========== ========== ======= ========
Percent of total............. 0.03% 75.86% 23.12% 0.99% 100.00%
========= ========== ========== ========== =======
</TABLE>
The following table indicates the amount of the Bank's certificates of
deposit and other deposits by time remaining until maturity as of March 31,
1996.
<TABLE>
<CAPTION>
Maturity
-------------------------------------------------------
3 Months Over 3 to 6 Over 6 to 12 Over
or Less Months Months 12 Months Total
-------- ----------- ------------ --------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Certificates of deposit less
than $100,000................... $13,880 $7,935 $15,162 $9,063 $46,040
Certificates of deposit of
$100,000 or more................ 1,146 306 942 608 3,002
------- ------ ------- ------ -------
Total certificates of deposit.. $15,026 $8,241 $16,104 $9,671 $49,042
======= ====== ======= ====== =======
</TABLE>
66
<PAGE>
BORROWINGS. Community Bank's borrowings historically have consisted of
advances from the FHLB of Des Moines. Such advances may be made pursuant to
different credit programs, each of which has its own interest rate and range of
maturities. Federal law limits an institution's borrowings from the FHLB to 20
times the amount paid for capital stock in the FHLB, subject to regulatory
collateral requirements. At March 31, 1996, the Bank had $9.0 million in
advances from the FHLB. The Bank has the ability to purchase additional capital
stock from the FHLB. For additional information regarding the term to maturity
on FHLB advances, see Note 7 of the Notes to Consolidated Financial Statements
and "Business - Lending Activities."
The following tables set forth the maximum month-end balance and average
balance of FHLB advances for the periods indicated, as well as the amount of
such advances and the weighted average interest rate at the dates indicated.
<TABLE>
<CAPTION>
Nine Months
Ended March 31, Years Ended June 30,
-------------------- ---------------------
1996 1995 1995 1994
---------- -------- ------ -------
(In Thousands)
<S> <C> <C> <C> <C>
Maximum Balance:
- ---------------
FHLB advances................... $14,360 $10,926 $15,877 $ --
Average Balance:
- ---------------
FHLB advances................... $12,451 $ 5,927 $ 7,919 $ 57
At
March 31, At June 30,
--------------------
1996 1995 1994
------- ------- ---------
(In Thousands)
<S> <C> <C> <C>
FHLB advances................... $ 9,000 $15,877 $ --
======= ======= ==========
Weighted average interest rate.. 5.91% 6.91% --%
</TABLE>
EMPLOYEES
At March 31, 1996, the Bank had a total of 42 full-time and eight
part-time employees. The Bank's employees are not represented by any collective
bargaining group. Management considers its employee relations to be good.
PROPERTIES
The Bank conducts its business through its main office, located in
Excelsior Springs, Missouri and one branch office located in Kearney, Missouri.
The Bank's Kearney branch office space is leased. The following table sets
forth information relating to the Bank's offices as of March 31, 1996. The
total net book value of the Bank's premises and equipment (including land,
buildings and leasehold improvements and furniture, fixtures and equipment) at
March 31, 1996 was approximately $1.3 million.
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<TABLE>
<CAPTION>
Total
Approximate
Date Square Net Book Value at
Location Acquired Footage March 31, 1996
- ------------------------------------ -------------- ----------- ------------------
(In thousands)
<S> <C> <C> <C>
Main Office: 1983 10,000 $1,159
1001 North Jesse James Road
Excelsior Springs, Missouri 64020
Branch Office: Leased 2,725 127
178 West 6th Street (Expires
Kearney, Missouri 64020 January 2000)
</TABLE>
Community Bank believes that its current facilities are adequate to meet the
present and forseeable needs of the Bank and the Holding Company.
LEGAL PROCEEDINGS
Community Bank is involved, from time to time, as plaintiff or defendant in
various legal actions arising in the normal course of their businesses. While
the ultimate outcome of these proceedings cannot be predicted with certainty, it
is the opinion of management, after consultation with counsel representing
Community Bank in the proceedings, that the resolution of these proceedings
should not have a material effect on the Holding Company's financial position or
results of operations on a consolidated basis.
SERVICE CORPORATION ACTIVITIES
As a federally chartered savings association, Community Bank is permitted
by OTS regulations to invest up to 2% of its assets, or approximately $1.7
million at March 31, 1996, in the stock of, or loans to, service corporation
subsidiaries. Community may invest an additional 1% of its assets in service
corporations where such additional funds are used for inner-city or community
development purposes and up to 50% of its total capital in conforming loans to
service corporations in which it owns more than 10% of the capital stock. In
addition to investments in service corporations, federal associations are
permitted to invest an unlimited amount in operating subsidiaries engaged solely
in activities in which a federal association may engage. At March 31, 1996,
Community Bank had one subsidiary, CBES Service Corporation ("CBES"). CBES was
established in March 1993 for the purpose of offering credit life, health and
accident insurance to its customers. At March 31, 1996, the Bank's investment in
CBES was $1,000. Also, for the fiscal year ended June 30, 1995, CBES had pre-tax
income of approximately $2.
REGULATION
GENERAL
Community Bank is a federally chartered savings bank, the deposits of which
are federally insured and backed by the full faith and credit of the U.S.
Government. Accordingly, the Bank is subject to broad federal regulation and
oversight extending to all its operations. The Bank is a member of the FHLB of
Des Moines and is subject to certain limited regulation by the Federal Reserve
Board. As the savings and loan holding company of the Bank, the Holding Company
also is subject to federal regulation and oversight. The purpose of the
regulation of the Holding Company and other holding companies is to protect
subsidiary savings and loan associations. The Bank is a member of the SAIF. The
deposits of the Bank are insured by the SAIF of the FDIC. As a result, the FDIC
has certain regulatory and examination authority over the Bank.
Certain of these regulatory requirements and restrictions are discussed
below or elsewhere in this document.
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FEDERAL REGULATION OF SAVINGS ASSOCIATIONS
The OTS has extensive authority over the operations of savings and loan
associations. As part of this authority, the Bank is required to file periodic
reports with the OTS and is subject to periodic examinations by the OTS and the
FDIC. The last regular OTS and FDIC examinations of the Bank were as of May 1995
and April 1991, respectively. When these examinations are conducted by the OTS
and the FDIC, the examiners may require the Bank to provide for higher general
or specific loan loss reserves.
All savings associations are subject to a semi-annual assessment, based
upon the savings and loan association's total assets. The Bank's OTS assessment
for the fiscal year ended June 30, 1995, was approximately $24,000.
The OTS also has extensive enforcement authority over all savings
institutions and their holding companies, including the Bank and the Holding
Company. This enforcement authority includes, among other things, the ability to
assess civil money penalties, to issue cease-and-desist or removal orders and to
initiate injunctive actions. In general, these enforcement actions may be
initiated for violations of laws and regulations and unsafe or unsound
practices. Other actions or inactions may provide the basis for enforcement
action, including misleading or untimely reports filed with the OTS. Except
under certain circumstances, public disclosure of final enforcement actions by
the OTS is required.
In addition, the investment, lending and branching authority of the Bank is
prescribed by federal laws, and regulations, and it is prohibited from engaging
in any activities not permitted by such laws and regulations. For example, no
savings institution may invest in non-investment grade corporate debt
securities. In addition, the permissible level of investment by federal
associations in loans secured by non-residential real property may not exceed
400% of total capital, except with approval of the OTS. Federal savings and loan
associations are also generally authorized to branch nationwide. The Bank is in
compliance with the noted restrictions.
OTS regulations limit a thrift institution's loans to one borrower to the
greater of $500,000 or 15% of unimpaired capital and surplus (except for loans
fully secured by certain readily marketable collateral, in which case this limit
is increased to 25% of unimpaired capital and surplus). At March 31, 1996, the
Bank's lending limit under this restriction was approximately $1.2 million.
Assuming the sale of the minimum number of shares in the Conversion at March 31,
1996, that limit would be increased to approximately $1.7 million. The Bank is
in compliance with the loans-to-one borrower limitation.
The OTS, as well as the other federal banking agencies, has adopted
guidelines establishing safety and soundness standards on such matters as loan
underwriting and documentation, internal controls and audit systems, interest
rate risk exposure and compensation and other employee benefits. Any institution
which fails to comply with these standards must submit a capital compliance
plan. A failure to submit a plan or to comply with an approved plan will subject
the institution to further enforcement action. The OTS and the other federal
banking agencies have also proposed additional guidelines on asset quality and
earnings standards. No assurance can be given as to whether or in what form the
proposed regulations will be adopted. The guidelines are not expected to
materially effect the Bank.
INSURANCE OF ACCOUNTS AND REGULATION BY THE FDIC
Community Bank is a member of the SAIF, which is administered by the FDIC.
Deposits are insured up to applicable limits by the FDIC and such insurance is
backed by the full faith and credit of the U.S. Government. As insurer, the FDIC
imposes deposit insurance premiums and is authorized to conduct examinations of
and to require reporting by FDIC-insured institutions. It also may prohibit any
FDIC-insured institution from engaging in any activity the FDIC determines by
regulation or order to pose a serious risk to the FDIC. The FDIC also has the
authority to initiate enforcement actions against savings and loan associations,
after giving the OTS an opportunity to take such action, and may terminate the
deposit insurance if it determines that the institution has engaged or is
engaging in unsafe or unsound practices, or is in an unsafe or unsound
condition.
The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured depository institutions are placed into one of
nine categories and assessed insurance premiums, ranging from .23% to .31% of
deposits, based upon their level of capital and supervisory evaluation. Under
the system, institutions classified as well capitalized (i.e., a core capital
ratio of at least 5%, a ratio of core capital to risk-weighted assets of at
least 6% and a risk-based capital ratio of at least 10%) and considered healthy
would pay the lowest premium while institutions
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that are less than adequately capitalized (i.e., a core capital or core capital
to risk-based capital ratios of less than 4% or a risk-based capital ratio of
less than 8%) and considered of substantial supervisory concern would pay the
highest premium. Risk classification of all insured institutions will be made
by the FDIC for each semi-annual assessment period.
The FDIC is authorized to increase assessment rates, on a semiannual basis,
if it determines that the reserve ratio of the SAIF will be less than the
designated reserve ratio of 1.25% of SAIF insured deposits. In setting these
increased assessments, the FDIC must seek to restore the reserve ratio to that
designated reserve level, or such higher reserve ratio as established by the
FDIC. The FDIC may also impose special assessments on SAIF members to repay
amounts borrowed from the United States Treasury or for any other reason deemed
necessary by the FDIC. See "Risk Factors -Recapitalization of SAIF, Disparity
Between BIF and SAIF Premiums" for information regarding the FDIC's proposed
regulations which would revise BIF premiums.
As is the case with the SAIF, the FDIC is authorized to adjust the
insurance premium rates for banks that are insured by the BIF of the FDIC in
order to maintain the reserve ratio of the BIF at 1.25% of BIF insured deposits.
The FDIC has reported that the BIF attained the 1.25% reserve ratio in May 1995
but that the SAIF is not likely to reach the 1.25% reserve ratio until 2002. In
August 1995, the FDIC issued final regulations to reduce the assessment rates
for the BIF. Under the revised assessment schedule, which became effective on
June 1, 1995, BIF-insured institutions paid an average of 0.045% of deposits,
with new assessment rates ranging from 0.04% of deposits to 0.31% of deposits.
The FDIC refunded any assessments collected in excess of those due under the
revised schedule. On November 14, 1995, the FDIC voted to reduce annual BIF
assessments to the legal minimum of $2,000, effective January 1, 1996 for all
BIF-insured institutions except for those that were not well capitalized or were
assigned to the higher supervisory risk categories. It is estimated that 92% of
the BIF-insured institutions will pay only the minimum annual assessment. SAIF-
insured institutions will continue to pay assessments at the current assessment
rates until the SAIF attains the 1.25% reserve ratio. The resulting disparity in
deposit insurance assessments between SAIF members and BIF members is likely to
provide BIF-insured institutions with certain competitive advantages in the
pricing of loans and deposits, and in lowered operating costs, pending any
legislative action to remedy the disparity.
The proposed Budget Act, which was vetoed by the President, included
provisions that focused on a resolution of the financial problems of the SAIF.
Under the provisions of the Budget Act, all SAIF member institutions would pay a
special assessment to recapitalize the SAIF, and the assessment base for the
payments on the FICO bonds would be expanded to include the deposits of both
BIF and SAIF-insured institutions. The amount of the special assessment required
to recapitalize the SAIF has been estimated to be approximately 80 basis points
of the SAIF-assessable deposits. This estimate of the special SAIF assessment is
less than the assessment of 85 to 90 basis points that had been previously
estimated. The special assessment would have been imposed on the first business
day of January 1996, or on such other date prescribed by the FDIC not later than
60 days after enactment of the Budget Act, based on the amount of SAIF deposits
on March 31, 1995. The Budget Act would have also permitted BIF-insured
institutions with deposits subject to SAIF assessments to reduce such SAIF-
deposits by 20% in computing the institution's special assessment. If an 85 or a
90 basis point assessment were assessed against the Bank's deposits as of March
31, 1996, the Bank's aggregate special SAIF assessment would be approximately
$577,000 or $611,000, respectively, and an assessment of 80 basis points would
be $543,000. The Budget Act also would have provided that the BIF could not
assess regular insurance assessments when it has a reserve ratio of 1.25% or
more except on those of its member institutions that have been found to have
"moderately severe" or "unsatisfactory" financial, operational, or compliance
weaknesses.
The Budget Act also provided for the merger of the BIF and SAIF on January
1, 1998, with such merger being conditioned upon the prior elimination of the
thrift charter. Congressional leaders had also agreed that Congress should
consider and act upon separate legislation to eliminate the thrift charter as
early as possible in 1996. If adopted, such legislation would require that the
Bank, as a federal savings and loan association, convert to a bank charter. Such
a requirement to convert to a bank charter could cause the Bank to lose the
favorable tax treatment for its bad debt reserves that it currently enjoys under
Section 593 of the Code and to have all or part of its existing bad debt
reserves recaptured into income. At March 31, 1996, the Bank had a balance of
approximately $1.7 million in bad debt reserves.
The above described provisions of the Budget Act were not the basis for the
President's veto, and Congressional leaders have indicated that these provisions
will be the basis for future legislation to recapitalize the SAIF. If enacted by
Congress, such legislation would have the effect of reducing the capital of SAIF
member institutions by the after-tax
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cost of the special SAIF assessment, plus any related additional tax
liabilities. The legislation would also have the effect of reducing any
differential that may otherwise be required in the assessment rates for the BIF
and SAIF.
REGULATORY CAPITAL REQUIREMENTS
Federally insured savings and loan associations, such as the Bank, are
required to maintain a minimum level of regulatory capital. The OTS has
established capital standards, including a tangible capital requirement, a
leverage ratio (or core capital) requirement and a risk-based capital
requirement applicable to such savings and loan associations. Generally, these
capital requirements must be generally as stringent as the comparable capital
requirements for national banks. The OTS is also authorized to impose capital
requirements in excess of these standards on individual associations on a case-
by-case basis.
The capital regulations require tangible capital of at least 1.5% of
adjusted total assets (as defined by regulation). Tangible capital generally
includes common stockholders' equity and retained income, and certain
noncumulative perpetual preferred stock and related income. In addition, all
intangible assets, other than a limited amount of purchased mortgage servicing
rights, must be deducted from tangible capital for calculating compliance with
the requirement. Further, the valuation allowance applicable to the write-down
of investments and mortgage-backed securities in accordance with SFAS No. 115 is
excluded from the regulatory capital calculation. At March 31, 1996, the Bank
had no intangible assets and a valuation allowance, net of tax under SFAS No.
115 of $13,000.
The OTS regulations establish special capitalization requirements for
savings and loan associations that own subsidiaries. In determining compliance
with the capital requirements, all subsidiaries engaged solely in activities
permissible for national banks or engaged in certain other activities solely as
agent for its customers are "includable" subsidiaries that are consolidated for
capital purposes in proportion to the Bank's level of ownership. For excludable
subsidiaries the debt and equity investments in such subsidiaries are deducted
from assets and capital. The Bank has one service corporation subsidiary.
At March 31, 1996, the Bank had tangible capital of $7.9 million, or 9.15%
of adjusted total assets, which is approximately $6.6 million above the minimum
requirement of 1.5% of adjusted total assets in effect on that date. On a pro
forma basis, after giving effect to the sale of the minimum, midpoint and
maximum number of shares of Common Stock offered in the Conversion and
investment of the net proceeds in assets not excluded for tangible capital
purposes, the Bank would have had tangible capital equal to 12.23%, 12.79% and
13.34%, respectively, of adjusted total assets at March 31, 1996, which is $9.7
million, $10.3 million and $10.9 million, respectively, above the requirement.
The capital standards also require core capital equal to at least 3% of
adjusted total assets (as defined by regulation). Core capital generally
consists of tangible capital plus certain intangible assets, including
supervisory goodwill (which is phased-out over a five-year period) and a limited
amount of purchased credit card relationships and purchased mortgage servicing
rights. As a result of the prompt corrective action provisions of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") discussed
below, however, a savings and loan association must maintain a core capital
ratio of at least 4% to be considered adequately capitalized unless its
supervisory condition is such to allow it to maintain a 3% ratio. At March 31,
1996, the Bank had no intangibles which were subject to these tests.
At March 31, 1996, the Bank had core capital equal to $7.9 million, or
9.15% of adjusted total assets, which is $5.3 million above the minimum leverage
ratio requirement of 3% as in effect on that date. On a pro forma basis, after
giving effect to the sale of the minimum, midpoint and maximum number of shares
of Common Stock offered in the Conversion and investment of the net proceeds in
assets not excluded from core capital, the Bank would have had core capital
equal to 12.23%, 12.79% and 13.34%, respectively, of adjusted total assets at
March 31, 1996, which is $8.4 million, $8.9 million and $9.5 million,
respectively, above the requirement.
The OTS risk-based requirement requires savings and loan associations to
have total capital of at least 8% of risk-weighted assets. Total capital
consists of core capital, as defined above, and supplementary capital.
Supplementary capital consists of certain permanent and maturing capital
instruments that do not qualify as core capital and general valuation loan and
lease loss allowances up to a maximum of 1.25% of risk-weighted assets.
Supplementary capital may be used to satisfy the risk-based requirement only to
the extent of core capital. At March 31, 1996, the Bank had $347,000 of general
loan valuation allowances, which was less than 1.25% of risk-weighted assets.
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Certain exclusions from capital and assets are required to be made for the
purpose of calculating total capital. Such exclusions consist of equity
investments (as defined by regulation) and that portion of land loans and
nonresidential construction loans in excess of an 80% loan-to-value ratio (these
items are excluded on a sliding scale through March 31, 1995, after which they
must be excluded in their entirety) and reciprocal holdings of qualifying
capital instruments. Community Bank had $518,000 of such exclusions from capital
and assets at March 31, 1996.
In determining the amount of risk-weighted assets, all assets, including
certain off-balance sheet items, will be multiplied by a risk weight, ranging
from 0% to 100%, based on the risk inherent in the type of asset. For example,
the OTS has assigned a risk weight of 50% for prudently underwritten permanent
one- to four-family first lien mortgage loans not more than 90 days delinquent
and having a loan to value ratio of not more than 80% at origination unless the
loan amount in excess of such ratio is insured by an insurer approved by the
Federal National Mortgage Association ("FNMA") or FHLMC.
On March 31, 1996, the Bank had total capital of $7.9 million
(including approximately $7.9 million in core capital and $347,000 in qualifying
supplementary capital) and risk-weighted assets of $64.2 million (with no
converted off-balance sheet assets); or total capital of 12.0% of risk-weighted
assets. This amount was $2.6 million above the 8% requirement in effect on that
date. On a pro forma basis, after giving effect to the sale of the minimum,
midpoint and maximum number of shares of Common Stock offered in the Conversion,
the infusion to the Bank of 50% of the net Conversion proceeds and the
investment of those proceeds in 20% risk-weighted government securities, the
Bank would have had total capital of 16.71%, 17.60% and 18.48%, respectively, of
risk-weighted assets, which is above the current 8% requirement by $5.7 million,
$6.2 million and $6.8 million, respectively.
The OTS has adopted a final rule that requires every savings and loan
association with more than normal interest rate risk exposure to deduct from its
total capital, for purposes of determining compliance with such requirement, an
amount equal to 50% of its interest-rate risk exposure multiplied by the present
value of its assets. This exposure is a measure of the potential decline in the
net portfolio value of a savings association, greater than 2% of the present
value of its assets, based upon a hypothetical 200 basis point increase or
decrease in interest rates (whichever results in a greater decline). Net
portfolio value is the present value of expected cash flows from assets,
liabilities and off-balance sheet contracts. The rule provides for a two quarter
lag between calculating interest rate risk and recognizing any deduction from
capital. The rule will not become effective until the OTS adopts the process by
which savings and loan associations may appeal an interest rate risk deduction
determination. Any savings and loan association with less than $300 million in
assets and a total risk-based capital ratio in excess of 12% is exempt from this
requirement unless the OTS determines otherwise. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Asset/Liability
Management" for information regarding the effect of this rule on the Bank.
Pursuant to FDICIA, the federal banking agencies, including the OTS, have
also proposed regulations authorizing the agencies to require a depository
institution to maintain additional total capital to account for concentration of
credit risk and the risk of non-traditional activities. No assurance can be
given as to the final form of any such regulation.
The OTS and the FDIC are authorized and, under certain circumstances
required, to take certain actions against savings and loan associations that
fail to meet their capital requirements. Effective December 19, 1992, the
federal banking agencies, including the OTS, were given additional enforcement
authority over undercapitalized depository institutions. The OTS is generally
required to take action to restrict the activities of an "undercapitalized
association" (generally defined to be one with less than either a 4% core
capital ratio, a 4% Tier 1 risked-based capital ratio or an 8% risk-based
capital ratio). Any such association must submit a capital restoration plan and
until such plan is approved by the OTS may not increase its assets, acquire
another institution, establish a branch or engage in any new activities, and
generally may not make capital distributions. The OTS is authorized to impose
the additional restrictions that are applicable to significantly
undercapitalized associations.
As a condition to the approval of the capital restoration plan, any company
controlling an undercapitalized association must agree that it will enter into a
limited capital maintenance guarantee with respect to the institution's
achievement of its capital requirements.
Any savings and loan association that fails to comply with its capital
plan or is "significantly undercapitalized" (i.e., Tier 1 risk-based or core
capital ratios of less than 3% or a risk-based capital ratio of less than 6%)
must be made
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subject to one or more of additional specified actions and operating
restrictions, which may cover all aspects of its operations and include a forced
merger or acquisition of the Bank. An association that becomes "critically
undercapitalized" (i.e., a tangible capital ratio of 2% or less) is subject to
further mandatory restrictions on its activities in addition to those applicable
to significantly undercapitalized associations. In addition, the OTS must
appoint a receiver (or conservator with the concurrence of the FDIC) for a
savings association, with certain limited exceptions, within 90 days after it
becomes critically undercapitalized.
Any undercapitalized association is also subject to the general enforcement
activity of the OTS and the FDIC, including the appointment of a receiver or
conservator.
The OTS is also generally authorized to reclassify an association into a
lower capital category and impose restrictions applicable to such category if
the institution is engaged in unsafe or unsound practices or is in an unsafe or
unsound condition.
The imposition by the OTS or the FDIC of any of these measures on Community
Bank may have a substantial adverse effect on the Bank's operations and
profitability and the value of the Common Stock purchased in the Conversion.
Holding Company shareholders do not have preemptive rights and, therefore, if
the Holding Company is directed by the OTS or the FDIC to issue additional
shares of Common Stock, such issuance may result in the dilution in the
percentage of ownership of the Holding Company of those persons purchasing
shares in the Conversion.
LIMITATIONS ON DIVIDENDS AND OTHER CAPITAL DISTRIBUTIONS
OTS regulations impose various restrictions or requirements on associations
with respect to their ability to pay dividends or make other distributions of
capital. OTS regulations prohibit an association from declaring or paying any
dividends or from repurchasing any of its stock if, as a result, the regulatory
capital of the Bank would be reduced below the amount required to be maintained
for the liquidation account established in connection with its mutual-to-stock
conversion. See "The Conversion - Effects of Conversion to Stock Form on
Depositors and Borrowers of the Bank" and "-Restrictions on Repurchase of
Stock."
The OTS utilizes a three-tiered approach to permit associations, based on
their capital level and supervisory condition, to make capital distributions
which include dividends, stock redemptions or repurchases, cash-out mergers and
other transactions charged to the capital account. See "- Regulatory Capital
Requirements."
Generally, Tier 1 associations, which are associations that before and
after the proposed distribution meet their fully phased-in capital requirements,
may make capital distributions during any calendar year equal to the greater of
100% of net income for the year-to-date plus 50% of the amount by which the
lesser of the Bank's tangible, core or risk-based capital exceeds its fully
phased-in capital requirement for such capital component, as measured at the
beginning of the calendar year, or the amount authorized for a Tier 2
association. However, a Tier 1 association deemed to be in need of more than
normal supervision by the OTS may be downgraded to a Tier 2 or Tier 3
association as a result of such a determination. The Bank meets the requirements
for a Tier 1 association and has not been notified of a need for more than
normal supervision. Tier 2 associations, which are associations that before and
after the proposed distribution meet their current minimum capital requirements,
may make capital distributions of up to 75% of net income over the most recent
four quarter period.
Tier 3 associations (which are associations that do not meet current
minimum capital requirements) that propose to make any capital distribution and
Tier 2 associations that propose to make a capital distribution in excess of the
noted safe harbor level must obtain OTS approval prior to making such
distribution. Tier 2 associations proposing to make a capital distribution
within the safe harbor provisions and Tier 1 associations proposing to make any
capital distribution need only submit written notice to the OTS 30 days prior to
such distribution. As a subsidiary of the Holding Company, the Bank will also be
required to give the OTS 30 days' notice prior to declaring any dividend on its
stock. The OTS may object to the distribution during that 30-day period based on
safety and soundness concerns. See "- Regulatory Capital Requirements."
The OTS has proposed regulations that would revise the current capital
distribution restrictions. The proposal eliminates the current tiered structure
and the safe-harbor percentage limitations. Under the proposal a savings and
loan association may make a capital distribution without notice to the OTS
(unless it is a subsidiary of a holding company)
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provided that it has a CAMEL 1 or 2 rating, is not in troubled condition and
would remain adequately capitalized (as defined by regulation) following the
proposed distribution. Savings and loan associations that would remain
adequately capitalized following the proposed distribution but do not meet the
other noted requirements must notify the OTS 30 days prior to declaring a
capital distribution. The OTS stated it will generally regard as permissible
that amount of capital distributions that do not exceed 50% of the institution's
excess regulatory capital plus net income to date during the calendar year. A
savings and loan association may not make a capital distribution without prior
approval of the OTS and the FDIC if it is undercapitalized before, or as a
result of, such a distribution. A savings and loan association will be
considered in troubled condition if it has a CAMEL rating of 4 or 5, is subject
to an enforcement action relating to its safety and soundness or financial
viability or has been informed in writing by the OTS that it is in troubled
condition. As under the current rule, the OTS may object to a capital
distribution if it would constitute an unsafe or unsound practice. No assurance
may be given as to whether or in what form the regulations may be adopted.
LIQUIDITY
All savings and loan associations, including the Bank, are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. For a discussion of what the Bank
includes in liquid assets, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources." This liquid asset ratio requirement may vary from time to time
(between 4% and 10%) depending upon economic conditions and savings flows of all
savings and loan associations. At the present time, the minimum liquid asset
ratio is 5%.
In addition, short-term liquid assets (e.g., cash, certain time deposits,
certain bankers acceptances and short-term U.S. Treasury obligations) currently
must constitute at least 1% of the Bank's average daily balance of net
withdrawable deposit accounts and current borrowings. Penalties may be imposed
upon associations for violations of either liquid assets ratio requirement. At
March 31, 1996, the Bank was in compliance with both requirements, with an
overall liquid assets ratio of 5.96% and a short-term liquid assets ratio of
4.06%.
ACCOUNTING
An OTS policy statement applicable to all savings and loan associations
clarifies and re-emphasizes that the investment activities of a savings and loan
association must be in compliance with approved and documented investment
policies and strategies, and must be accounted for in accordance with generally
accepted accounting principles. Under the policy statement, management must
support its classification of and accounting for loans and securities (i.e.,
whether held for investment, sale or trading) with appropriate documentation.
The OTS has adopted an amendment to its accounting regulations, which may
be made more stringent than generally accepted accounting principles by the OTS,
to require that transactions be reported in a manner that best reflects their
underlying economic substance and inherent risk and that financial reports must
incorporate any other accounting regulations or orders prescribed by the OTS.
The Bank is in compliance with these amended rules.
QUALIFIED THRIFT LENDER TEST
All savings and loan associations, including the Bank, are required to meet
a qualified thrift lender ("QTL") test to avoid certain restrictions on their
operations. This test requires a savings and loan association to have at least
65% of its portfolio assets (as defined by regulation) in qualified thrift
investments on a monthly average for nine out of every 12 months on a rolling
basis. Such assets primarily consist of residential housing related loans and
investments. At March 31, 1996, the Bank met the test and has always met the
test since its effectiveness.
Any savings and loan association that fails to meet the QTL test must
convert to a national bank charter, unless it requalifies as a QTL and
thereafter remains a QTL. If an association does not requalify and converts to a
national bank charter, it must remain SAIF-insured until the FDIC permits it to
transfer to the BIF. If such an association has not yet requalified or converted
to a national bank, its new investments and activities are limited to those
permissible for both a savings and loan association and a national bank, and it
is limited to national bank branching rights in its home state. In addition, the
Bank is immediately ineligible to receive any new FHLB borrowings and is subject
to national bank limits for payment of dividends. If such association has not
requalified or converted to a national bank within three years
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after the failure, it must divest of all investments and cease all activities
not permissible for a national bank. In addition, it must repay promptly any
outstanding FHLB borrowings, which may result in prepayment penalties. If any
association that fails the QTL test is controlled by a holding company, then
within one year after the failure, the holding company must register as a bank
holding company and become subject to all restrictions on bank holding
companies. See "- Holding Company Regulation."
COMMUNITY REINVESTMENT ACT
Under the Community Reinvestment Act ("CRA"), every FDIC insured
institution has a continuing and affirmative obligation consistent with safe and
sound banking practices to help meet the credit needs of its entire community,
including low and moderate income neighborhoods. The CRA does not establish
specific lending requirements or programs for financial institutions nor does it
limit an institution's discretion to develop the types of products and services
that it believes are best suited to its particular community, consistent with
the CRA. The CRA requires the OTS, in connection with the examination of the
Bank, to assess the institution's record of meeting the credit needs of its
community and to take such record into account in its evaluation of certain
applications, such as a merger or the establishment of a branch, by the Bank. An
unsatisfactory rating may be used as the basis for the denial of an application
by the OTS.
The federal banking agencies, including the OTS, have recently revised the
CRA regulations and the methodology for determining an institution's compliance
with the CRA. Due to the heightened attention being given to the CRA in the past
few years, the Bank may be required to devote additional funds for investment
and lending in its local community. The Bank was examined for CRA compliance in
January 1996 and received a rating of "satisfactory record of meeting community
credit needs."
TRANSACTIONS WITH AFFILIATES
Generally, transactions between a savings and loan association or its
subsidiaries and its affiliates are required to be on terms as favorable to the
Bank as transactions with non-affiliates. In addition, certain of these
transactions, such as loans to an affiliate, are restricted to a percentage of
the Bank's capital. Affiliates of the Bank include the Holding Company and any
company which is under common control with the Bank. In addition, a savings and
loan association may not lend to any affiliate engaged in activities not
permissible for a bank holding company or acquire the securities of most
affiliates.
Certain transactions with directors, officers or controlling persons are
also subject to conflict of interest regulations enforced by the OTS. These
conflict of interest regulations and other statutes also impose restrictions on
loans to such persons and their related interests. Among other things, such
loans must be made on terms substantially the same as for loans to unaffiliated
individuals.
HOLDING COMPANY REGULATION
The Holding Company will be a unitary savings and loan holding company
subject to regulatory oversight by the OTS. As such, the Holding Company is
required to register and file reports with the OTS and is subject to regulation
and examination by the OTS. In addition, the OTS has enforcement authority over
the Holding Company and its non-savings and loan association subsidiaries which
also permits the OTS to restrict or prohibit activities that are determined to
be a serious risk to the subsidiary savings and loan association.
As a unitary savings and loan holding company, the Holding Company
generally is not subject to activity restrictions. If the Holding Company
acquires control of another savings and loan association as a separate
subsidiary, it would become a multiple savings and loan holding company, and the
activities of the Holding Company and any of its subsidiaries (other than the
Bank or any other SAIF-insured savings and loan association) would become
subject to such restrictions unless such other associations each qualify as a
QTL and were acquired in a supervisory acquisition.
If the Bank fails the QTL test, the Holding Company must obtain the
approval of the OTS prior to continuing after such failure, directly or through
its other subsidiaries, any business activity other than those approved for
multiple savings and loan holding companies or their subsidiaries. In addition,
within one year of such failure the Holding Company must register as, and will
become subject to, the restrictions applicable to bank holding companies. The
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<PAGE>
activities authorized for a bank holding company are more limited than are the
activities authorized for a unitary or multiple savings and loan holding
company. See "- Qualified Thrift Lender Test."
The Holding Company must obtain approval from the OTS before acquiring
control of any other SAIF-insured association. Such acquisitions are generally
prohibited if they result in a multiple savings and loan holding company
controlling savings and loan associations in more than one state. However, such
interstate acquisitions are permitted based on specific state authorization or
in a supervisory acquisition of a failing savings and loan association.
FEDERAL SECURITIES LAW
The stock of the Holding Company will be registered with the Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The Holding Company will be subject to the
information, proxy solicitation, insider trading restrictions and other
requirements of the SEC under the Exchange Act.
Holding Company stock held by persons who are affiliates (generally
officers, directors and principal stockholders) of the Holding Company may not
be resold without registration or unless sold in accordance with certain resale
restrictions. If the Holding Company meets specified current public information
requirements, each affiliate of the Holding Company is able to sell in the
public market, without registration, a limited number of shares in any three-
month period.
FEDERAL RESERVE SYSTEM
The Federal Reserve Board requires all depository institutions to maintain
noninterest-bearing reserves at specified levels against their transaction
accounts (primarily checking, NOW and Super NOW checking accounts). At March 31,
1996, the Bank was in compliance with these reserve requirements. The balances
maintained to meet the reserve requirements imposed by the Federal Reserve Board
may be used to satisfy liquidity requirements that may be imposed by the OTS.
See "- Liquidity."
Savings and loan associations are authorized to borrow from the Federal
Reserve Bank "discount window," but Federal Reserve Board regulations require
associations to exhaust other reasonable alternative sources of funds, including
FHLB borrowings, before borrowing from the Federal Reserve Bank.
FEDERAL HOME LOAN BANK SYSTEM
The Bank is a member of the FHLB of Des Moines, which is one of 12 regional
FHLBs, that administers the home financing credit function of savings and loan
associations. Each FHLB serves as a reserve or central bank for its members
within its assigned region. It is funded primarily from proceeds derived from
the sale of consolidated obligations of the FHLB System. It makes loans to
members (i.e., advances) in accordance with policies and procedures established
by the board of directors of the FHLB. These policies and procedures are subject
to the regulation and oversight of the Federal Housing Finance Board. All
advances from the FHLB are required to be fully secured by sufficient collateral
as determined by the FHLB. In addition, all long-term advances are required to
provide funds for residential home financing.
As a member, the Bank is required to purchase and maintain stock in the
FHLB of Des Moines. At March 31, 1996, the Bank had $810,700 (at cost) of FHLB
stock, which was in compliance with this requirement. In past years, the Bank
has received substantial dividends on its FHLB stock. Over the past five fiscal
years such dividends have averaged 8.10% and were 7.63% for fiscal 1995. For the
fiscal year ended June 30, 1995, dividends paid by the FHLB of Des Moines to the
Bank totaled approximately $44,000, which constitutes a $1,000 increase over the
amount of dividends received in fiscal year 1994. No assurance can be given that
such dividends will continue in the future at such levels.
Under federal law, the FHLBs are required to provide funds for the
resolution of troubled savings and loan associations and to contribute to low-
and moderately priced housing programs through direct loans or interest
subsidies on advances targeted for community investment and low- and moderate-
income housing projects. These contributions have affected adversely the level
of FHLB dividends paid and could continue to do so in the future. These
contributions
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<PAGE>
could also have an adverse effect on the value of FHLB stock in the future. A
reduction in value of the Bank's FHLB stock may result in a corresponding
reduction in the Bank's capital.
FEDERAL AND STATE TAXATION
FEDERAL TAXATION. Savings and loan associations such as the Bank that meet
certain definitional tests relating to the composition of assets and other
conditions prescribed by the Code are permitted to establish reserves for bad
debts and to make annual additions thereto which may, within specified formula
limits, be taken as a deduction in computing taxable income for federal income
tax purposes. The amount of the bad debt reserve deduction for "non-qualifying
loans" is computed under the experience method. The amount of the bad debt
reserve deduction for "qualifying real property loans" (generally loans secured
by improved real estate) may be computed under either the experience method or
the percentage of taxable income method (based on an annual election).
Under the experience method, the bad debt reserve deduction is an amount
determined under a formula based generally upon the bad debts actually sustained
by the savings and loan association over a period of years.
The percentage of specially computed taxable income that is used to compute
a savings and loan association's bad debt reserve deduction under the percentage
of taxable income method (the "percentage bad debt deduction") is 8%. The
percentage bad debt deduction thus computed is reduced by the amount permitted
as a deduction for non-qualifying loans under the experience method. The
availability of the percentage of taxable income method permits qualifying
savings and loan associations to be taxed at a lower effective federal income
tax rate than that applicable to corporations generally (approximately 31.3%
assuming the maximum percentage bad debt deduction).
If an association's specified assets (generally, loans secured by
residential real estate or deposits, educational loans, cash and certain
government obligations) constitute less than 60% of its total assets, the Bank
may not deduct any addition to a bad debt reserve and generally must include
existing reserves in income over a four-year period. No representation can be
made as to whether the Bank will meet the 60% test for subsequent taxable years.
Under the percentage of taxable income method, the percentage bad debt
deduction cannot exceed the amount necessary to increase the balance in the
reserve for "qualifying real property loans" to an amount equal to 6% of such
loans outstanding at the end of the taxable year or the greater of (i) the
amount deductible under the experience method or (ii) the amount which when
added to the bad debt deduction for "non-qualifying loans" equals the amount by
which 12% of the amount comprising savings accounts at year end exceeds the sum
of surplus, undivided profits and reserves at the beginning of the year. At
March 31, 1996, the 6% and 12% limitations did not restrict the percentage bad
debt deduction available to the Bank. It is possible that these limitations will
be a limiting factor in the future.
In addition to the regular federal income tax, corporations, including
savings and loan associations such as the Bank, generally are subject to a
minimum tax. An alternative minimum tax is imposed at a minimum tax rate of 20%
on alternative minimum taxable income, which is the sum of a corporation's
regular taxable income (with certain adjustments) and tax preference items, less
any available exemption. The alternative minimum tax is imposed to the extent it
exceeds the corporation's regular income tax and net operating losses can offset
no more than 90% of alternative minimum taxable income. For taxable years
beginning after 1986 and before 1996, corporations, including savings and loan
associations such as the Bank, are also subject to an environmental tax equal to
0.12% of the excess of alternative minimum taxable income for the taxable year
(determined without regard to net operating losses and the deduction for the
environmental tax) over $2 million.
To the extent earnings appropriated to a savings and loan association's bad
debt reserves for "qualifying real property loans" and deducted for federal
income tax purposes exceed the allowable amount of such reserves computed under
the experience method and to the extent of the Bank's supplemental reserves for
losses on loans ("Excess"), such Excess may not, without adverse tax
consequences, be utilized for the payment of cash dividends or other
distributions to a shareholder (including distributions on redemption,
dissolution or liquidation) or for any other purpose (except to absorb bad debt
losses). As of March 31, 1996, the Bank's Excess for tax purposes totaled
approximately $1.7 million.
The Bank and its subsidiary file consolidated federal income tax returns on
a fiscal year basis using the accrual method of accounting. The Holding Company
intends to file consolidated federal income tax returns with the Bank. Savings
and loan associations, such as the Bank, that file federal income tax returns as
part of a consolidated group are
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<PAGE>
required by applicable Treasury regulations to reduce their taxable income for
purposes of computing the percentage bad debt deduction for losses attributable
to activities of the non-savings and loan association members of the
consolidated group that are functionally related to the activities of the
savings and loan association member.
The Bank has not been audited by the IRS recently with respect to federal
income tax returns. In the opinion of management, any examination of still open
returns would not result in a deficiency which could have a material adverse
effect on the financial condition of the Bank.
STATE TAXATION. The Missouri Corporation Income Tax Act provides for an
exemption from the Missouri Corporation Income Tax for mutual savings banks and
for banking corporations, which includes stock associations (e.g., the Bank).
However, this exemption does not extend to non-banking entities such as the
Company. The non-banking subsidiaries of the Bank (as well as the Company) are
subject to the Missouri Corporate Income Tax based on their Missouri taxable
income, as well as franchise taxes. The Missouri Corporation Income Tax applies
at graduated rates from 4% upon the first $25,000 of Missouri taxable income to
8% on all Missouri taxable income in excess of $200,000. For these purposes,
"Missouri taxable income" means net income which is earned within or derived
from sources within the State of Missouri, after adjustments permitted under
Missouri law including a federal income tax deduction and an allowance for net
operating losses, if any. In addition, the Bank will become subject to the
Missouri Shares Tax after the Conversion, which will be imposed on the assessed
value of the Bank's stock. The formula for deriving the assessed value is to
calculate 15% of the sum of (i) 20% of a corporation's capitalized earnings,
plus (ii) 80% of a corporation's taxable stockholders' equity, and to subtract
from that amount 50% of a corporation's real and personal property assessment.
Other various items may also be subtracted in calculating a corporation's
capitalized earnings.
DELAWARE TAXATION. As a Delaware holding company, the Holding Company is
exempted from Delaware corporate income tax but is required to file an annual
report with and pay an annual fee to the State of Delaware. The Holding Company
is also subject to an annual franchise tax imposed by the State of Delaware.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF THE HOLDING COMPANY
The Board of Directors of the Holding Company currently consists of six
members, each of whom is also a director of the Bank. See "Directors of the
Bank." Each Director of the Holding Company has served as such since the Holding
Company's incorporation in June 1996. Directors of the Holding Company will
serve three-year staggered terms so that approximately one-third of the
directors will be elected at each annual meeting of stockholders. The terms of
the current directors of the Holding Company are the same as their terms as
directors of the Bank. The Holding Company intends to pay directors a fee of
$2,000 per annum, payable on a quarterly basis. See "-Directors of the Bank."
The executive officers of the Holding Company, each of whom held his
present position since June 1996, are elected annually and hold office until his
respective successor has been elected and qualified or until death, resignation
or removal by the Board of Directors. The executive officers of the Holding
Company, are set forth below. See "-Executive Officers Who are Not Directors."
<TABLE>
<CAPTION>
Name Title
----------------- ----------------------------
<S> <C>
Larry E. Hermreck Chief Executive Officer and Secretary
Dennis D. Hartman Controller and Chief Financial Officer
</TABLE>
It is not anticipated that the executive officers of the Holding Company
will receive any remuneration in their capacity as Holding Company executive
officers. For information regarding compensation of directors and executive
officers of the Bank, see "- Meetings of the Board of Directors of the Bank," "-
Compensation of the Board of Directors of the Bank" and "- Executive
Compensation."
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<PAGE>
COMMITTEES OF THE HOLDING COMPANY
The Holding Company formed standing Audit, Nominating and Compensation
Committees in connection with its organization in June 1996. The Holding Company
was not incorporated in fiscal 1995 and therefore the committees did not meet
during that fiscal year.
The Audit Committee will review audit reports and related matters to ensure
effective compliance with regulations and internal policies and procedures. This
committee also will act on the recommendation by management of an accounting
firm to perform the Holding Company's annual audit and acts as a liaison between
the auditors and the Board. The current members of this committee are Directors
Cox, Lalumondier, Lamb, Radley and Rounkles.
The Nominating Committee will meet annually in order to nominate candidates
for membership on the Board of Directors. This committee is comprised of the
Board members who are not up for election.
The Compensation Committee will establish the Holding Company's
compensation policies and review compensation matters. The current members of
this Committee are Directors Cox, Lalumondier, Lamb, Radley and Rounkles.
INDEMNIFICATION
The Certificate of Incorporation of the Holding Company provides that a
director or officer of the Holding Company shall be indemnified by the Holding
Company to the fullest extent authorized by the Delaware General Corporation Law
("DGCL") against all expenses, liability and loss reasonably incurred or
suffered by such person in connection with his activities as a director or
officer or as a director or officer of another company, if the director or
officer held such position at the request of the Holding Company. Delaware law
requires that such director, officer, employee or agent, in order to be
indemnified, must have acted in good faith and in a manner reasonably believed
to be not opposed to the best interests of the Holding Company and, with respect
to any criminal action or proceeding, either had reasonable cause to believe
such conduct was lawful or did not have reasonable cause to believe his conduct
was unlawful.
The Certificate of Incorporation and Delaware law also provide that the
indemnification provisions of such Certificate and the statute are not exclusive
of any other right which a person seeking indemnification may have or later
acquire under any statute, provision of the Certificate of Incorporation, Bylaws
of the Holding Company, agreement, vote of stockholders or disinterested
directors or otherwise.
These provisions may have the effect of deterring shareholder derivative
actions, since the Holding Company may ultimately be responsible for expenses
for both parties to the action. A similar effect would not be expected for
third-party claims.
In addition, the Certificate of Incorporation and Delaware law also provide
that the Holding Company may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Holding Company or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Holding Company has
the power to indemnify such person against such expense, liability or loss under
the DGCL. The Holding Company intends to obtain such insurance.
DIRECTORS OF THE BANK
Prior to the Conversion, the direction and control of the Bank, as a mutual
savings institution, had been vested in its Board of Directors. Upon conversion
of the Bank to stock form, each of the directors of the Bank will continue to
serve as a director of the converted Bank. The Board of Directors of the Bank
currently consists of six directors. The directors are divided into three
classes. Approximately one-third of the directors are elected at each annual
meeting of stockholders. Because the Holding Company will own all of the issued
and outstanding shares of capital stock of the converted Bank after the
Conversion, directors of the Holding Company will elect the directors of the
Bank.
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The following table sets forth certain information regarding the directors
of the Bank and the Holding Company:
<TABLE>
<CAPTION>
Director Term
Name Position(s) Held with the Bank Age/(1)/ Since Expires
- ---- ----------------------------------- -------- ---------- -----------
<S> <C> <C> <C> <C>
Robert E. McCrorey Chairman of the Board and President 55 1973 1996
Edgar L. Radley Vice Chairman of the Board 68 1979 1997
Richard N. Cox Director 49 1992 1996
Robert L. Lalumondier Director 56 1992 1998
Cecil E. Lamb Director 67 1985 1998
Rodney G. Rounkles Director 58 1984 1997
</TABLE>
____________________________
/(1)/ At March 31, 1996.
The business experience of each director is set forth below. All directors
have held their present position for at least the past five years, except as
otherwise indicated.
ROBERT E. MCCROREY. Mr. McCrorey has served as a loan originator for the
Bank since 1993. Prior to that time, he served as a branch manager for a beer
distributor.
EDGAR L. RADLEY. Mr. Radley is the retired owner and operator of a Coast to
Coast hardware store, which he operated until 1990.
RICHARD N. COX. Mr. Cox is the owner and operator of Cox Tool Co., Inc., a
designer/builder of plastic molds, located in Excelsior Springs, Missouri.
ROBERT L. LALUMONDIER. Mr. Lalumondier is the owner of Lalumondier
Insurance Agency, located in Kearney, Missouri.
CECIL E. LAMB. Mr. Lamb is a retired postmaster.
RODNEY G. ROUNKLES. Mr. Rounkles was the plant manager of a molding
products plant in Excelsior Springs, Missouri until his retirement in 1995.
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The Bank's executive officers who are not also directors will retain their
offices in the converted Bank. Officers of the Bank are elected annually by the
Board of Directors of the Bank. The business experience of the executive
officers of the Bank and the Holding Company who are not also directors are set
forth below.
LARRY E. HERMRECK. Mr. Hermreck, age 56, has been with the Bank for the
past 23 years and has served as Chief Executive Officer for 18 years. In that
capacity, he is responsible for overseeing the day to day operations of the
Bank.
DERYL R. GOETTLING. Mr. Goettling, age 49, is the Manager of the Bank's
Mortgage Loan Department and is responsible for the supervision of all mortgage
lending operations of the Bank. Mr. Goettling joined the Bank in 1986 and served
in various capacities prior to being promoted to his current position in 1992.
MARGARET E. TEEGARDEN. Ms. Teegarden, age 47, is the Manager of the Bank's
Savings Department, responsible for managing the Bank's savings department. Ms.
Teegarden joined the Bank in 1978.
DENNIS D. HARTMAN. Mr. Hartman, age 41, is the Controller and Manager of
the Bank's Accounting Department. He is responsible for the supervision of the
Accounting Department and reporting to the regulatory authorities. He is also
responsible for overseeing the Bank's asset/liability management program. Mr.
Hartman joined the Bank in 1978.
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JAMES V. ALDERSON. Mr. Alderson, age 50, has served as the Manager of the
Consumer Loan Department since June 1994, responsible for supervision of the
Bank's consumer lending operations. Mr. Alderson has been with the Bank since
1990 and served as a loan officer until June 1994.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BANK
The Board of Directors met 28 times during the year ended June 30, 1995.
During fiscal 1995, no director of the Bank attended fewer than 75% of the
aggregate of the total number of Board meetings and the total number of meetings
held by the committees of the Board of Directors on which he served.
The Board of Directors of the Bank has established various committees,
including Executive, Audit and Salary Review Committees. The Board of Directors
does not have a separate Nominating Committee. The full Board of Directors acts
as the Nominating Committee, except for directors who are up for election at the
upcoming meeting.
The Executive Committee generally has the power and authority to act on
behalf of the Board of Directors on important matters between scheduled Board
meetings, unless specific Board of Directors action is required. The members of
the Executive Committee consist of Messrs. McCrorey, Radley and Rounkles. The
Executive Committee did not meet during the year ended June 30, 1995.
The Audit Committee reviews (i) the independent auditors' reports and
results of their examination, subject to review by and with the entire Board of
Directors, (ii) the internal audit function, which is under the control of and
reports directly to the Audit Committee, and (iii) the examination reports of
the OTS and the FDIC and other regulatory reports, subject to review by and with
the entire Board of Directors. The Bank's full Board of Directors acts as the
Audit Committee. The Audit Committee met 12 times during the year ended June 30,
1995.
The Salary Review Committee reviews the compensation of the Bank's officers
and employees, and it is expected that the members of the Committee will serve
as trustees of the ESOP and as administrators of the Stock Option Plan and the
Recognition and Retention Plan. The members of the committee are Messrs. Lamb,
Rounkles, Lalumondier, Radley, Cox and Hermreck, and the committee met one time
during the year ended June 30, 1995.
COMPENSATION OF THE BOARD OF DIRECTORS OF THE BANK
During fiscal 1995, all directors received a fee of $650 per month from
July to December 1994, plus an additional $650 fee for a year-end special
meeting of the board held in December 1994, and a fee of $700 per month from
January to June 1995. During fiscal 1995, directors also received fees of $200
per month for participation on board committees. Each director received
aggregate board and committee fees of $11,150 during fiscal 1995. During fiscal
1996, the Bank paid directors board fees of $700 per month from July to December
1995, plus an additional $700 fee for a special meeting of the board held in
December 1995. Effective January 1996, board fees were increased to $800 per
month. Each director except for Mr. Lalumondier also receives group
hospitalization, dental, prescription and life insurance coverage. Mr. McCrorey
also is paid a salary for services performed as a loan originator for the Bank.
In order to encourage directors to remain members of the Bank's board, in
February 1995 the Bank entered into Director Emeritus Agreements (the "Emeritus
Agreements") with each of the directors of the Bank. Pursuant to the Emeritus
Agreements, upon reaching age 75, directors Radley, Lamb, Lalumondier, McCrorey,
Rounkles and Cox will receive a benefit of $671, $525, $642, $1,225, $817, and
$846, respectively, per month paid monthly for ten years following retirement.
Upon termination of service for disability or retirement prior to age 75, the
director will receive a reduced amount pursuant to a schedule as set forth in
the Emeritus Agreements, paid monthly for ten years following termination, or if
earlier, until the director's recovery from disability. Upon termination
following a change in control of the Bank, each director would be entitled to a
lump sum payment of a reduced amount pursuant to a schedule as set forth in the
Emeritus Agreement. Upon the death or termination for cause of a director, no
benefits will be paid to such director. The Bank purchased life insurance to
finance the benefits that would be payable to five of the six directors. The
Bank accrued expenses during fiscal 1995 in the aggregate amount of $4,440 for
the Emeritus Agreements.
Upon completion of the Conversion, and subject to the approval of the
Holding Company's stockholders, each director of the Bank who is not a full-time
employee (5 persons) will receive an option to purchase shares of Common Stock
and an award of restricted stock under the RRP equal to 0.5% and 0.2%,
respectively, of the Common Stock issued
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in the Conversion. See "Benefit Plans - Stock Option and Incentive Plan" and
"Benefit Plans Recognition and Retention Plan." In addition, Mr. McCrorey, who
serves as both a director of the Bank and as the Bank's loan originator will
receive an option to purchase shares of Common Stock and an award of restricted
stock under the RRP equal to 1.0% and 0.4%, respectively, of the Common Stock
issued in the Conversion. One-half of Mr. McCrorey's awards are being granted to
him as a director, and the other half as the Bank's loan originator.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
or granted to the Bank's Chief Executive Officer. No other executive officer of
the Bank had aggregate compensation (salary plus bonus) in excess of $100,000 in
fiscal 1995.
<TABLE>
<CAPTION>
===================================================================================================================
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------
LONG-TERM
Compensation
ANNUAL COMPENSATION/(1)/ AWARDS
- -------------------------------------------------------------------------------------------------------------------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ ALL OTHER
NAME AND PRINCIPAL FISCAL COMPENSATION AWARD SARS COMPENSATION
POSITION YEAR/(1)/ SALARY($) BONUS($) ($) ($) (#) ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Larry E. Hermreck, Chief 1995 $56,000 $16,000 $ --- ---/(2)/ ---/(2)/ $ ---
Executive Officer
===================================================================================================================
</TABLE>
________________________
/(1)/ In accordance with the revised rules on executive officer and
director compensation disclosure adopted by the SEC, Summary
Compensation information is excluded for the fiscal years ended
June 30, 1993 and 1994, as the Bank was not a public company during
such periods.
/(2)/ Pursuant to the proposed Stock Option Plan, the Holding Company
intends to grant to Mr. Hermreck options to purchase a number of
shares equal to 2.2% (19,635 shares at the minimum and 26,565
shares at the maximum of the Estimated Valuation Range) of the
total number of shares of Common Stock sold in the Conversion at an
exercise price equal to the market value per share of the Common
Stock on the date of the grant. See "- Benefit Plans - Stock Option
and Incentive Plan." In addition, pursuant to the proposed RRP, the
Holding Company intends to grant to Mr. Hermreck a number of shares
of restricted stock equal to 0.88% (7,854 shares at the minimum and
10,626 shares at the maximum of the Estimated Valuation Range), of
the total number of shares of Common Stock sold in the Conversion.
See " - Benefit Plans -Recognition and Retention Plan."
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<PAGE>
EMPLOYMENT AGREEMENTS
The Bank has determined to enter into an employment agreement effective
upon consummation of the Conversion, with Larry E. Hermreck, the Bank's Chief
Executive Officer, providing for a term of three years. The contract provides
for payment to the employee for the remaining term of the contract unless the
employee is terminated "for cause."
The employment agreement for Mr. Hermreck provides for an annual base
salary as determined by the Board of Directors, but not less than the employee's
current salary. Mr. Hermreck's base salary (exclusive of director fees and
bonuses) will be $56,000, assuming the employment contract is entered into in
fiscal 1997. So long as the contract remains in force, salary increases will be
reviewed not less often than annually thereafter, and are subject to the sole
discretion of the Board of Directors. The employment contract provides for
annual extensions for one additional year, but only upon express authorization
by the Board of Directors at the end of each year. The contract provides for
termination upon the employee's death, for cause or in certain events specified
by OTS regulations. The employment contract is terminable by the employee upon
90 days' notice to the Bank.
In the event there is a change in control of the Holding Company or the
Bank, as defined in the agreement, if employment terminates involuntarily, as
defined in the Agreement, in connection with such change in control or within 12
months thereafter, the employment contract provides for a payment equal to 299%
of Mr. Hermreck's base amount of compensation as defined in the Code. Assuming
a change in control were to take place as of March 31, 1996, the aggregate
amounts payable to Mr. Hermreck pursuant to this change in control provision
would be approximately $215,280.
The contract provides, among other things, for participation in an
equitable manner in employee benefits applicable to executive personnel. The
employment contract may have an "anti-takeover" effect that could affect a
proposed future acquisition of control of the Bank after its Conversion. See
"Restrictions on Acquisitions of Stock and Related Takeover Defensive
Provisions."
The Bank also intends to enter into an employment agreement with Messrs.
Goettling and Hartman and Ms. Teegarden. These agreements will each provide for
a term of three years and a change of control payment equal to 299% of the
employee's base amount of compensation. These agreements are expected to be
similar to the employment agreement with Mr. Hermreck.
SALARY CONTINUATION AGREEMENTS
In order to encourage the Bank's Chief Executive Officer to remain an
employee of the Bank, the Bank entered into Salary Continuation Agreement (the
"Agreement") in February 1995 with Mr. Hermreck. Pursuant to the Agreement,
upon retirement on or after reaching age 65, Mr. Hermreck would receive a
monthly benefit of $2,917 paid monthly for 15 years following retirement. Upon
termination of service for disability or retirement prior to age 65, Mr.
Hermreck would receive a reduced amount pursuant to a schedule set forth in the
Agreement, paid monthly for 15 years following termination or, if earlier, until
Mr. Hermreck's recovery from disability. Upon termination following a change in
control of the Bank, Mr. Hermreck would be entitled to a lump sum payment of a
reduced amount pursuant to a schedule set forth in the Agreement. The Agreement
provides for a death benefit if Mr. Hermreck dies while in active service of the
Bank equal to the amount that would be paid to Mr. Hermreck upon serving until
age 65. If Mr. Hermreck dies after benefit payments commence but before
receiving all payments, the Bank will pay the remaining benefits at the same
time and in the same amounts they would have been paid had Mr. Hermreck
survived. The Bank purchased life insurance on Mr. Hermreck whereby the Bank is
the beneficiary in order to offset the expected payments to Mr. Hermreck. The
Bank has also entered into Salary Continuation Agreements with Messrs. Alderson,
Goettling and Hartman and Ms. Teegarden. These agreements are similar to the
Agreement with Mr. Hermreck, although providing for lower payments.
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BENEFIT PLANS
GENERAL. The Bank currently provides health care benefits, including
medical, prescription and dental, subject to certain deductibles and copayments
by employees, and group life insurance to its full time employees.
STOCK OPTION AND INCENTIVE PLAN. Among the benefits to the Bank
anticipated from the Conversion is the ability to attract and retain personnel
through prudent use of stock option and other stock-related incentive programs.
It is anticipated that a Stock Option Plan will be adopted by the Board of
Directors of the Holding Company, subject to approval by stockholders of the
Holding Company following Conversion. Stock options, stock appreciation rights
and limited stock appreciation rights covering shares representing an aggregate
of up to 10% of the shares of Common Stock sold in the Conversion may be granted
to directors, officers and employees of the Holding Company or its subsidiaries
under the Stock Option Plan.
Options granted under the Stock Option Plan may be either options that
qualify as "incentive stock options" (options that afford tax treatment to
recipients upon compliance with certain restrictions and that do not normally
result in tax deductions to the employer) or options that do not so qualify. In
the event of a change in control of the Holding Company, outstanding options may
become immediately exercisable to the extent such options have vested. The
exercise price of stock options granted under the Stock Option Plan is required
to be at least equal to the fair market value per share of the stock on the date
of grant.
The proposed Stock Option Plan provides for the grant of Stock Appreciation
Rights ("SARs") at any time, whether or not the participant then holds stock
options, granting the right to receive the excess of the market value of the
shares represented by the SARs on the date exercised over the exercise price.
SARs generally will be subject to the same terms and conditions and exercisable
to the same extent as stock options. There is no present intention to grant any
SARs.
The Stock Option Plan will be administered by the Holding Company's
Compensation Committee each of the members of which is a "disinterested person"
under applicable regulations. The Compensation Committee will select the
recipients and terms of awards pursuant to the Stock Option Plan. See " -
Committees of the Holding Company."
The Compensation Committee currently intends to grant options to employees
to purchase shares of Common Stock in amounts expressed as a percentage of the
shares offered in the Conversion, as follows: Mr. Hermreck - 2.2%; and all
executive officers of the Bank and Holding Company as a group (5 persons) -
5.5%. Under the terms of the Stock Option Plan, a ten-year, non-qualified stock
option is intended to be granted to each current director of the Bank or the
Company in an amount equal to 0.5% of the shares issued in the Conversion. It is
further expected that Mr. McCrorey will be granted an incentive option to
purchase an additional 0.5% of the shares issued in the Conversion. In
addition, the Bank intends to grant each director elected subsequent to the
Conversion a ten-year, non-qualified stock option in an amount equal to 0.5% of
the shares issued in the Conversion, subject to availability. The options
granted under the Stock Option Plan will have an exercise price equal to the
market value per share of the Common Stock on the date of the grant, which under
OTS regulations may not be any sooner than six months after completion of the
Conversion. All of these grants are made upon consideration of past services
rendered to the Bank and in an amount deemed necessary (after a review of grants
made by other converting institutions) to encourage the continued retention of
the officers and directors who are considered necessary for the continued
success of the Bank. In this regard, all options granted as described above
will vest in five equal annual installments commencing one year from the date of
grant, subject to the continued service of the holder of such option. All
options will expire ten years after the date such option was granted, which is
the date of shareholder approval of the Stock Option Plan.
In granting awards under the proposed Stock Option Plan, the Compensation
Committee will consider, among other things, position and years of service,
value of the participant's service to the Bank and the Holding Company and the
added responsibilities of such individuals as executive officers and directors
of a public company. As a stock-related incentive plan, the proposed Stock
Option Plan is designed to recognize the past contributions of the officers,
directors and employees to the Bank and to encourage them to remain with the
Bank. The Bank also believes that the equity stake of such persons in the
Holding Company will give them an incentive to perform to the best of their
abilities in the interest of the Bank and its affiliates. All proposed grants
to officers are subject to modification by the Compensation Committee based upon
its performance evaluation of the option recipients prior to ratification of the
Stock Option Plan by stockholders following completion of the Conversion and
subject to OTS regulations.
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EMPLOYEE STOCK OWNERSHIP PLAN. The Boards of Directors of Community and
the Holding Company have approved the adoption of an ESOP for the benefit of
employees of Community. The ESOP is designed to meet the requirements of an
employee stock ownership plan as described at Section 4975(e)(7) of the Code and
Section 407(d)(6) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and, as such, the ESOP is empowered to borrow in order to
finance purchases of the Holding Company's Common Stock.
It is anticipated that the ESOP will be capitalized with a loan from the
Holding Company. The proceeds from this loan are expected to be used by the
ESOP to purchase up to 8.0% of the Common Stock issued in the Conversion. After
the Conversion, as a qualified employee pension plan under Section 401(a) of the
Code, the ESOP will be in the form of a stock bonus plan and will provide for
contributions, predominantly in the form of either the Holding Company's Common
Stock or cash, which will be used within a reasonable period after the date of
contributions primarily to purchase Holding Company Common Stock. The Bank will
receive a tax deduction equal to the amount it contributes to the ESOP, subject
to the limitations set forth in the Code. The maximum tax-deductible
contribution by the Bank in any year is an amount equal to the maximum amount
that may be deducted by the Bank under Section 404 of the Code, subject to
reduction based on contributions to other Tax-Qualified Employee Plans.
Additionally, the Bank will not make contributions if such contributions would
cause the Bank to violate its regulatory capital requirements. The assets of
the ESOP will be invested primarily in Holding Company Common Stock.
From time to time, the ESOP may purchase additional shares of Common Stock
for the benefit of plan participants through purchases of outstanding shares in
the market, upon the original issuance of additional shares by the Holding
Company or upon the sale of shares held in treasury by the Holding Company.
Such purchases, which are not currently contemplated, would be subject to then-
applicable laws, regulations and market conditions.
Generally accepted accounting principles require that any borrowing by the
ESOP be reflected as a liability in the Holding Company's consolidated financial
statements, whether or not such borrowing is guaranteed by, or constitutes a
legally binding contribution commitment of the Holding Company or the Bank. In
addition, shares purchased with borrowed funds will, to the extent of the
borrowings, be excluded from stockholders' equity, representing unearned
compensation to employees for future services not yet performed. Consequently,
if the ESOP purchases already-issued shares in the open market, the Holding
Company's consolidated liabilities will increase to the extent of the ESOP's
borrowings, and total and per share stockholders' equity will be reduced to
reflect such borrowings. If the ESOP purchases newly issued shares from the
Holding Company, total stockholders' equity would neither increase nor decrease,
but per share stockholders' equity and per share net income would decrease
because of the increase in the number of outstanding shares. In either case, as
the borrowings used to fund ESOP purchases are repaid, total stockholders'
equity will correspondingly increase.
All employees of the Bank are eligible to participate in the ESOP after
they attain age 21 and complete one year of service during which they work at
least 1,000 hours. Employees will be credited for years of service to the Bank
prior to the adoption of the ESOP for participation and vesting purposes. The
Bank's contribution to the ESOP is allocated among participants on the basis of
compensation. Each participant's account will be credited with cash and shares
of Holding Company Common Stock based upon compensation earned during the year
with respect to which the contribution is made. After completing five years of
service, a participant will be 100% vested in his ESOP account. ESOP
participants are entitled to receive distributions from their ESOP accounts only
upon termination of service. Distribution will be made in cash and in whole
shares of Holding Company Common Stock. Fractional shares will be paid in cash.
Participants will not incur a tax liability until a distribution is made.
Participating employees are entitled to instruct the trustee of the ESOP as
to how to vote the shares held in their account. The trustee, who has
dispositive power over the shares in the Plan, will not be affiliated with the
Holding Company or Community. The ESOP may be amended by the Board of Directors
of the Holding Company, except that no amendment may be made which would reduce
the interest of any participant in the ESOP trust fund or divert any of the
assets of the ESOP trust fund to purposes other than the benefit of participants
or their beneficiaries.
RECOGNITION AND RETENTION PLAN. It is anticipated that the Holding Company
will establish an RRP as a method of providing directors, officers and employees
with a proprietary interest in the Holding Company in a manner designed to
encourage such individuals to remain with the Bank. In this respect, it is
anticipated that Restricted Stock Awards ("Awards") covering up to 4% of the
shares of Common Stock that will be outstanding upon completion of the
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Conversion may be awarded to the Bank's directors, officers and key employees
under the RRP. The RRP will be subject to stockholder approval at the Holding
Company's meeting of stockholders following the Conversion.
The RRP will be administered by the Compensation Committee. Under the
terms of the proposed RRP, Awards may be granted to directors and key employees
in the form of shares of Common Stock held by the RRP. Awards are non-
transferable and non-assignable. Recipients will earn (i.e., become vested in),
over a period of time, the shares of Common Stock covered by the Awards. The
Compensation Committee will determine the period of time over which the Awards
are to be earned. Awards will be 100% vested upon termination of employment due
to death or disability.
The Compensation Committee currently intends to grant to Mr. Hermreck, and
all executive officers of the Bank and Holding Company as a group (5 persons)
RRP awards of 0.88% and 2.2%, respectively, of the shares issued in the
Conversion, respectively. It is intended that the Awards to officers and
employees will vest in five equal annual installments commencing one year from
the date of grant, subject in each case to the continued service of the holder
as an employee, officer, director or advisory director of the Bank and to the
Bank meeting its fully phased-in regulatory capital requirements. In addition,
it is intended that each director of the Bank (6 persons) at the date of
completion of the Conversion receive an Award of 0.2% of the Common Stock sold
in the Conversion. It is further expected that Mr. McCrorey will receive an
additional award of 0.2% of the shares issued in the Conversion. Each director
elected subsequent to approval of the RRP by stockholders who is not an employee
is intended to receive an Award equal to 0.2% of the dollar value of the Award
to each non-employee director at the date of the approval of the RRP, subject to
availability. Awards are intended to vest in five equal annual installments
commencing one year from the date of grant, subject to the continued service of
the director and to the Bank's meeting its fully phased-in capital requirements.
The Award recipient may receive any dividends paid on the restricted shares
upon vesting of such shares. In addition, upon the vesting of such shares,
recipients of Awards may direct the voting of the shares allocated to them. The
cost of the RRP will be reflected as compensation expense in the Statements of
Income as vesting occurs.
In granting awards under the RRP, the Compensation Committee will consider,
among other things, position and years of service, value of the participant's
service to the Bank and the Holding Company and the added responsibilities of
such individuals as executive officers and directors of a public company. In
addition, as a stock-based retention plan, the RRP is designed to recognize the
past contributions of the officers, directors and employees to the Bank and to
encourage them to remain with the Bank. The Bank also believes that the equity
stake of such persons will give them incentive to perform in the best interests
of the Bank and the Holding Company. All proposed grants to officers are
subject to modification by the Compensation Committee based upon its performance
evaluation of the award recipients prior to ratification of the RRP by
stockholders following completion of the Conversion.
It is currently anticipated that the RRP will be funded by shares
subsequently reacquired and held as treasury shares or through the issuance of
authorized but unissued shares. To the extent the RRP is funded from authorized
but unissued shares, the funding of the RRP will have the effect of diluting
existing stockholders. See "Prospectus Summary-Benefits of Conversion to
Directors and Executive Officers" and "Capitalization."
INDEBTEDNESS OF MANAGEMENT
The Bank has followed a policy of granting consumer loans and loans secured
by one- to four-family real estate to officers, directors and employees. Loans
to directors and executive officers are made in the ordinary course of business
and on the same terms and conditions as those of comparable transactions with
the general public prevailing at the time, in accordance with the Bank's
underwriting guidelines, and do not involve more than the normal risk of
collectibility or present other unfavorable features.
All loans by the Bank to its directors and executive officers are subject
to OTS regulations restricting loan and other transactions with affiliated
persons of the Bank. Federal law currently requires that all loans to directors
and executive officers be made on terms and conditions comparable to those for
similar transactions with non-affiliates. Loans to all directors, executive
officers, employees and their associates totaled $1,795,400 at March 31, 1996,
which was 15.5% of the Bank's equity capital at that date and 10.8% of the
Holding Company's stockholders' equity at that date, assuming completion of the
Conversion at the midpoint of the Estimated Valuation Range. There were no
loans outstanding to any director, executive officer or their affiliates at
preferential rates or terms which in the aggregate
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exceeded $60,000 during the three years ended June 30, 1995 and the nine months
ended March 31, 1996. All loans to directors and officers were performing in
accordance with their terms at March 31, 1996.
THE CONVERSION
The Board of Directors of the Bank and the OTS have approved the Plan of
Conversion, subject to approval by the members of the Bank and the satisfaction
of certain other conditions. OTS approval does not constitute a recommendation
or endorsement by the OTS of the Plan of Conversion. Certain terms used in the
following summary are defined in the Plan of Conversion, a copy of which may be
obtained by contacting the Bank.
GENERAL
On May 14, 1996, the Board of Directors of the Bank adopted the Plan,
subject to approval by the OTS and the members of the Bank. Pursuant to the
Plan, the Bank is to be converted from a federal mutual savings bank to a
federal stock savings bank, with the concurrent formation of a holding company.
The OTS has approved the Plan, subject to its approval by the affirmative vote
of the members of the Bank holding not less than a majority of the total number
of votes eligible to be cast at a Special Meeting called for that purpose to be
held on September ___, 1996.
The Conversion will be accomplished through amendment of the Bank's federal
mutual charter to authorize the issuance of capital stock, at which time the
Bank will become a wholly owned subsidiary of the Holding Company. The
Conversion will be accounted for as a pooling of interests.
Subscription Rights are being given to Eligible Account Holders as of March
31, 1995, the Tax-Qualified Employee Plans of the Bank and the Holding Company,
Supplemental Eligible Account Holders, Other Members, and officers, directors
and employees of the Bank. Concurrently with, during, or following the
Subscription Offering, and subject to the prior rights of holders of
Subscription Rights, members of the general public to whom a prospectus is
delivered are being afforded the opportunity to subscribe for Holding Company
Common Stock in the Community Offering with a preference to natural persons
residing in the Local Community. The residence of such individuals shall be
determined by the Bank in its sole discretion based upon the books and records
of the Bank. See "- Offering of Holding Company Common Stock." Depending upon
market conditions, any shares not initially subscribed for in the Subscription
Offering may be offered for sale by the Holding Company to the general public in
a Syndicated Community Offering. See "-Syndicated Community Offering."
Subscriptions for shares will be subject to the maximum and minimum purchase
limitations set forth in the Plan of Conversion.
BUSINESS PURPOSES
The Bank has several business purposes for the Conversion. The sale of
Holding Company Common Stock will have the immediate result of providing the
Bank with additional equity capital. This increased capital will support
expansion of its financial services, subject to applicable regulatory
restrictions. The sale of the Common Stock is the most effective means of
increasing the Bank's permanent capital and does not involve the high interest
cost and repayment obligation of subordinated debt. In addition, investment of
the net Conversion proceeds is expected to provide additional operating income
to further increase the Bank's capital on a continuing basis.
The Board of Directors of the Bank believes that a holding company
structure could facilitate the acquisition of other financial institutions as
well as other companies. If a multiple holding company structure is utilized in
a future acquisition, the acquired savings institution would be able to operate
on a more autonomous basis as a wholly owned subsidiary of the Holding Company
rather than as a division of the Bank. For example, the acquired savings
institution could retain its own directors, officers and corporate name as well
and have representation on the Board of Directors of the Holding Company. As of
the date hereof, there are no plans or understandings by the Bank or the Holding
Company regarding the acquisition of any other institutions.
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The Board of Directors of the Bank also believes that a holding company
structure will facilitate the diversification of the Bank's business activities.
While diversification will be maximized if a unitary holding company structure
is utilized because the types of business activities permitted to a unitary
holding company are broader than those of a multiple holding company, either
type of holding company may engage in a broader range of activities than may a
thrift institution directly. Currently, there are no plans that the Holding
Company engage, immediately after Conversion, in any material activities apart
from holding the shares of the Bank, although the Board may determine to expand
the Holding Company's activities after Conversion.
The preferred stock and additional common stock of the Holding Company
being authorized in the Conversion will be available for future acquisitions
(although the Holding Company has no current negotiations, understandings or
plans with respect to any acquisition) and for issuance and sale to raise
additional equity capital, subject to market conditions and generally without
stockholder approval.
The Conversion will structure the Bank in the stock form used in the United
States by all commercial banks, most major business corporations and an
increasing number of savings institutions. The Conversion will permit the
Bank's members to become stockholders of the Holding Company, thereby allowing
them to own stock in the parent corporation of the Bank in which they maintain
deposit accounts or with which they have a borrowing relationship. Such
ownership may encourage customers who become stockholders to promote the Bank to
others, thereby further contributing to the Bank's growth. The more flexible
operating structure provided by the Holding Company and the stock form of
ownership is expected to assist the Bank in competing aggressively with other
financial institutions in its principal market area.
The Bank is also expected to benefit from its management and employees
owning stock, because stock ownership is viewed as an effective performance
incentive and a means of attracting, retaining and compensating personnel.
EFFECTS OF CONVERSION TO STOCK FORM ON DEPOSITORS AND BORROWERS OF THE BANK
VOTING RIGHTS. Upon Conversion, neither deposit account holders nor
borrowers will have voting rights in the Bank or the Holding Company and will
therefore not be able to elect directors of either entity or to control their
affairs. These rights are currently accorded to deposit account holders with
regard to the Bank. Subsequent to Conversion, voting rights will be vested
exclusively in the Holding Company as the sole stockholder of the Bank. Voting
rights as to the Holding Company will be held exclusively by its stockholders.
Each purchaser of Holding Company Common Stock shall be entitled to vote on any
matters to be considered by the Holding Company stockholders. A stockholder
will be entitled to one vote for each share of Common Stock owned, subject to
certain limitations applicable to holders of 10% or more of the shares of the
Common Stock. See "Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions." The Holding Company intends to supply each stockholder
with quarterly and annual reports and proxy statements.
DEPOSIT ACCOUNTS AND LOANS. The terms of the Bank's deposit accounts, the
balances of the individual accounts and the existing FDIC insurance coverage
will not be affected by the Conversion. Furthermore, the Conversion will not
affect the loan accounts, the balances of these accounts, or the obligations of
the borrowers under their individual contractual arrangements with the Bank.
TAX EFFECTS. The Bank has received an opinion from Luse Lehman Gorman
Pomerenk & Schick, P.C. with regard to federal income taxation, and an opinion
of KPMG Peat Marwick LLP with regard to Missouri taxation, to the effect that
the adoption and implementation of the Plan of Conversion set forth herein will
not be taxable for federal or Missouri tax purposes to the Bank or the Holding
Company. See "- Income Tax Consequences."
LIQUIDATION RIGHTS. The Bank has no plan to liquidate either before or
after the Conversion. However, if there should ever be a complete liquidation,
either before or after Conversion, deposit account holders would receive the
protection of insurance by the FDIC up to applicable limits. Subject thereto,
liquidation rights before and after Conversion would be as follows:
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LIQUIDATION RIGHTS IN PRESENT MUTUAL BANK. In addition to the protection
of FDIC insurance up to applicable limits, in the event of a complete
liquidation each holder of a deposit account in the Bank in its present mutual
form would receive his pro rata share of any assets of the Bank remaining after
payment of claims of all creditors (including the claims of all depositors in
the amount of the withdrawal value of their accounts). Such holder's pro rata
share of such remaining assets, if any, would be in the same proportion of such
assets as the balance in his deposit account was to the aggregate balance in all
deposit accounts in the Bank at the time of liquidation.
LIQUIDATION RIGHTS IN PROPOSED CONVERTED BANK. After Conversion each
deposit account holder, in the event of a complete liquidation, would have a
claim of the same general priority as the claims of all other general creditors
of the Bank in addition to the protection of FDIC insurance up to applicable
limits. Therefore, except as described below, the deposit account holder's claim
would be solely in the amount of the balance in his deposit account plus accrued
interest and the holder would have no interest in the value of the Bank above
that amount.
The Plan of Conversion provides that there shall be established, upon the
completion of the Conversion, a special "liquidation account" for the benefit of
Eligible Account Holders and Supplemental Eligible Account Holders (i.e.,
depositors with an account balance of $50 or more at March 31, 1995 and June 30,
1996, respectively) in an amount equal to the net worth of the Bank as of the
date of its latest consolidated statement of financial condition contained in
the final Prospectus relating to the sales of shares of Holding Company Common
Stock in the Conversion. Each Eligible Account Holder and Supplemental Eligible
Account Holder would have an initial interest in such liquidation account for
each qualifying deposit account held in the Bank on the qualifying date. An
Eligible Account Holder's or Supplemental Eligible Account Holder's interest as
to each deposit account would be in the same proportion of the total liquidation
account as the balance in his account on March 31, 1995 and June 30, 1996,
respectively, was to the aggregate balance in all qualifying deposit accounts of
Eligible Account Holders and Supplemental Eligible Account Holders on such date.
For accounts in existence on both dates, separate subaccounts shall be
determined on the basis of the qualifying deposits in such accounts on the
record dates. However, if an Eligible Account Holder or Supplemental Eligible
Account Holder should reduce the amount in the qualifying deposit account on any
annual closing date of the Bank to a level less than the lowest amount in such
account on March 31, 1995 or June 30, 1996, respectively, and on any subsequent
closing date, then the account holder's interest in this special liquidation
account would be reduced by an amount proportionate to any such reduction, and
the account holder's interest would cease to exist if such qualifying deposit
account were closed.
In addition, the interest in the special liquidation account would never be
increased despite any increase in the balance of the account holders' related
accounts after Conversion, and would only decrease.
Any assets remaining after the above liquidation rights of Eligible Account
Holders and Supplemental Eligible Account Holders were satisfied would be
distributed to the Holding Company as the sole stockholder of the Bank.
No merger, consolidation, purchase of bulk assets with assumption of
deposit accounts and other liabilities, or similar transaction, whether the
Bank, as converted, or another SAIF-insured institution if the surviving
institution, is deemed to be a complete liquidation for purposes of distribution
of the liquidation account and, in any such transaction, the liquidation account
would be assumed to the full extent authorized by regulations of the OTS as then
in effect. The OTS has stated that the consummation of a transaction of the type
described in the preceding sentence in which the surviving entity is not an
SAIF-insured institution would be reviewed on a case-by-case basis to determine
whether the transaction should constitute a "complete liquidation" requiring
distribution of any then remaining balance in the liquidation account. While the
Bank believes that such a transaction should not constitute a complete
liquidation, there can be no assurance that the OTS will not adopt a contrary
position and, in such event, that the Bank's position will be determined to be
correct.
COMMON STOCK. For information as to the characteristics of the Common
Stock to be issued under the Plan of Conversion, see "Dividends" and
"Description of Capital Stock." Common Stock issued under the Plan of Conversion
cannot, and will not, be insured by the FDIC or any other government agency.
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THE BANK WILL CONTINUE, IMMEDIATELY AFTER COMPLETION OF THE CONVERSION, TO
PROVIDE ITS SERVICES TO DEPOSITORS AND BORROWERS PURSUANT TO ITS EXISTING
POLICIES AND WILL MAINTAIN THE EXISTING MANAGEMENT AND EMPLOYEES OF THE BANK.
OTHER THAN FOR PAYMENT OF EXPENSES INCIDENT TO THE CONVERSION, NO ASSETS OF THE
BANK WILL BE DISTRIBUTED IN THE CONVERSION. THE BANK WILL CONTINUE TO BE A
MEMBER OF THE FHLB SYSTEM, AND ITS DEPOSIT ACCOUNTS WILL CONTINUE TO BE INSURED
BY THE FDIC. THE AFFAIRS OF THE BANK WILL CONTINUE TO BE DIRECTED BY THE
EXISTING BOARD OF DIRECTORS AND MANAGEMENT.
OFFERING OF HOLDING COMPANY COMMON STOCK
Under the Plan of Conversion, up to 1,207,500 shares of Holding Company
Common Stock will be offered for sale, subject to certain restrictions described
below through a Subscription and Community Offering.
SUBSCRIPTION OFFERING. The Subscription Offering will expire at ______
p.m. Excelsior Springs, Missouri Time, on September ____, 1996 (the
"Subscription Expiration Date") unless extended by the Bank and the Holding
Company. Regulations of the OTS require that all shares to be offered in the
Conversion be sold within a period ending not more than 45 days after the
Subscription Expiration Date (or such longer period as may be approved by the
OTS) or, despite approval of the Plan of Conversion by members, the Conversion
will not be effected and the Bank will remain in mutual form. This period
expires on ________, 1996, unless extended with the approval of the OTS. If the
Conversion is not completed by __________, 1996, all subscribers will have the
right to modify or rescind their subscriptions and to have their subscription
funds returned promptly with interest. In the event of such an extension, all
subscribers will be notified in writing of the time period within which
subscribers must notify the Bank of their intention to maintain, modify or
rescind their subscriptions. If the subscriber rescinds or does not respond in
any manner to the Bank's notice, the funds submitted will be refunded to the
subscriber with interest at 2.25%, the Bank's current passbook rate per annum,
and/or the subscriber's withdrawal authorizations will be terminated. In the
event that the Conversion is not effected, all funds submitted and not
previously refunded pursuant to the Subscription and Community Offering will be
promptly refunded to subscribers with interest at 2.25%, the Bank's current
passbook rate per annum, and all withdrawal authorizations will be terminated.
SUBSCRIPTION RIGHTS. In accordance with OTS regulations, non-transferable
Subscription Rights have been granted under the Plan of Conversion to the
following persons in the following order of priority: (1) Eligible Account
Holders (deposit account holders of the Bank maintaining an account balance of
$50 or more as of March 31, 1995), (2) Tax-Qualified Employee Plans, (3)
Supplemental Eligible Account Holders (deposit account holders of the Bank
maintaining an account balance of $50 or more as of June 30, 1996); (4) Other
Members of the Bank (deposit account holders of the Bank as of _________, 1996
and certain borrowers as of both ________, 1995 and _______, 1996, who continue
to be borrowers as of the date of the Special Meeting, other than Eligible
Account Holders and Supplemental Eligible Account Holders), and (5) officers,
directors and employees of the Bank. All subscriptions received will be subject
to the availability of Common Stock after satisfaction of all subscriptions of
all persons having prior rights in the Subscription Offering, and to the maximum
and minimum purchase limitations set forth in the Plan of Conversion.
SUBSCRIPTION RIGHTS ARE NON-TRANSFERABLE. PERSONS FOUND TO BE SELLING OR
OTHERWISE TRANSFERRING THEIR RIGHT TO PURCHASE STOCK IN THE SUBSCRIPTION
OFFERING OR PURCHASING COMMON STOCK ON BEHALF OF ANOTHER PERSON WILL BE SUBJECT
TO FORFEITURE OF SUCH RIGHTS AND POSSIBLE FURTHER SANCTIONS AND PENALTIES
IMPOSED BY THE OTS, AN AGENCY OF THE U.S. GOVERNMENT. The preference categories
are more fully described below.
Category No. 1 is reserved for the Bank's Eligible Account Holders.
Subscription Rights to purchase shares under this category will be allocated
among Eligible Account Holders to permit each such depositor to purchase shares
in an amount equal to the greater of $100,000 of Common Stock, one-tenth of one
percent (.10%) of the total shares of Common Stock offered in the Conversion, or
15 times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of Common Stock to be issued by a
fraction of which the numerator is the amount of the qualifying deposit of the
Eligible Account Holder and the denominator is the total amount of the
qualifying deposit of the Eligible Account Holders in the converting Bank in
each case on March 31, 1995 (the "Eligibility Record Date"); if sufficient
shares are not available, shares shall be allocated first to permit each
subscribing Eligible Account Holder to purchase to the extent possible 100
shares, and thereafter among each subscribing Eligible Account Holder pro rata
in the same proportion that his qualifying deposit bears to the total qualifying
deposits of all subscribing Eligible Account Holders whose subscriptions remain
unsatisfied.
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Category No. 2 provides for the issuance of Subscription Rights to Tax-
Qualified Employee Plans to purchase up to 10% of the total shares issued in the
Subscription Offering, provided that singly or in the aggregate such plans
(other than that portion of such plans which is self-directed) shall not
purchase more than 10% of the shares of the Holding Company Conversion Stock.
Subscription Rights received pursuant to this Category shall be subordinated to
all rights received by Eligible Account Holders to purchase shares pursuant to
Category No. 1; provided, however, that notwithstanding any other provision in
the Plan of Conversion to the contrary, the Tax-Qualified Employee Plans shall
have a first priority Subscription Right to the extent that the total number of
shares of Holding Company Conversion Stock sold in the Subscription and
Community Offering exceeds the maximum of the Estimated Valuation Range.
However, such plans shall not, in the aggregate, purchase more than 10% of the
Holding Company Common Stock issued. It is currently intended that the ESOP will
purchase 8% of the shares of Common Stock issued in the Conversion.
Category No. 3 provides that each Supplemental Eligible Account Holder
shall receive non-transferable Subscription Rights to subscribe for shares of
Holding Company Conversion Stock in an amount equal to the greater of $100,000
of Common Stock, one-tenth of one percent (.10%) of the total offering of
shares, or 15 times the product (rounded down to the next whole number) obtained
by multiplying the total number of shares of common stock to be issued by a
fraction of which the numerator is the amount of the qualifying deposit of the
Supplemental Eligible Account Holder and the denominator is the total amount of
qualifying deposits of all Supplemental Eligible Account Holders in the
converting association in each case on June 30, 1996 (the "Supplemental
Eligibility Record Date"). Subscription Rights received pursuant to this
category shall be subordinated to all Subscription Rights received by Eligible
Account Holders and Tax-Qualified Employee Plans. Any non-transferable
Subscription Rights to purchase shares received by an Eligible Account Holder in
accordance with Category No. 1 shall reduce to the extent thereof the
Subscription Rights to be distributed to such person pursuant to this Category.
In the event of an oversubscription for shares under the provisions of this
subparagraph, the shares available shall be allocated first to permit each
subscribing Supplemental Eligible Account Holder, to the extent possible, to
purchase a number of shares sufficient to make his total allocation (including
the number of shares, if any, allocated in accordance with Category No. 1) equal
to 100 shares, and thereafter among each subscribing Supplemental Eligible
Account Holder pro rata in the same proportion that his qualifying deposit bears
to the total qualifying deposits of all subscribing Supplemental Eligible
Account Holders whose subscriptions remain unsatisfied.
Category No. 4 provides, to the extent that shares are then available after
satisfying the subscriptions of Eligible Account Holders, Tax-Qualified Employee
Plans and Supplemental Eligible Account Holders, for the issuance of
Subscription Rights to each such Other Member to purchase shares in an amount
equal to the greater $100,000 of Common Stock or one-tenth of one percent (.10%)
of the total offering of shares offered in the Conversion based on the Estimated
Valuation Range subject to the overall purchase limitation and to the extent
Common Stock is available. In the event of an oversubscription for shares, the
shares available shall be allocated among the subscribing Other Members pro rata
in the same proportion that his number of votes on the Voting Record Date bears
to the total number of votes on the Voting Record Date of all subscribing Other
Members on such date. Such number of votes shall be determined based on the
Bank's mutual charter and bylaws in effect on the date of approval by members of
this Plan of Conversion.
Category No. 5 provides for the issuance of Subscription Rights to
officers, directors and employees of the Bank, to purchase up to a maximum of
$100,000 individually of Common Stock to the extent that shares are available
after satisfying the subscriptions of eligible subscribers in preference
Categories 1, 2, 3 and 4. In the event of an oversubscription, the available
shares will be allocated pro rata among all subscribers in this Category.
The Bank and the Holding Company will make reasonable efforts to comply
with the securities laws of all states in the United States in which persons
entitled to subscribe for shares pursuant to the Plan of Conversion reside.
However, no shares will be offered or sold under the Plan of Conversion to any
such person who (1) resides in a foreign country or (2) resides in a state of
the United States in which a small number of persons otherwise eligible to
subscribe for shares under the Plan of Conversion reside or as to which the Bank
and the Holding Company determine that compliance with the securities laws of
such state would be impracticable for reasons of cost or otherwise, including,
but not limited to, a requirement that the Bank or the Holding Company or any of
their officers, directors or employees register, under the securities laws of
such state, as a broker, dealer, salesman or agent. No payments will be made in
lieu of the granting of Subscription Rights to any such person.
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COMMUNITY OFFERING. To the extent that shares are available for purchase,
the Holding Company and the Bank have determined to offer shares pursuant to the
Plan to certain members of the general public to whom the Holding Company
delivers a copy of this Prospectus and a stock order form in the Community
Offering, with preference given to natural persons residing in Clay and Ray
Counties, Missouri (the "Local Community"). Such persons, together with
associates of and persons acting in concert with such persons, may purchase up
to $100,000 of Common Stock. The Community Offering, if any, may terminate at
any time without notice, but may not terminate later than _________, 1996,
unless extended with the approval of the OTS. THE OPPORTUNITY TO SUBSCRIBE FOR
SHARES OF COMMON STOCK IN THE COMMUNITY OFFERING CATEGORY IS SUBJECT TO THE
RIGHT OF THE COMPANY AND THE BANK, IN THEIR SOLE DISCRETION, TO ACCEPT OR REJECT
ANY SUCH ORDERS IN WHOLE OR IN PART EITHER AT THE TIME OF RECEIPT OF AN ORDER OR
AS SOON AS PRACTICABLE THEREAFTER.
If there are not sufficient shares available to fill orders in the
Community Offering, such stock will be allocated first to each natural person
residing in the Local Community whose order is accepted by the Company, in an
amount equal to the lesser of 1,000 shares or the number of shares subscribed
for by each such subscriber in the Local Community, if possible. Thereafter,
unallocated shares will be allocated among the subscribers in the Local
Community whose orders remain unsatisfied in the same proportion that the
unfilled subscription of each bears to the total unfilled subscriptions of all
subscribers in the Local Community whose subscription remains unsatisfied. If
there are any shares remaining, shares will be allocated to other members of the
general public who subscribe in the Community Offering applying the same
allocation described above for subscribers in the Local Community.
SYNDICATED COMMUNITY OFFERING. As part of the Community Offering, all
shares of Common Stock not purchased in the Subscription and Community
Offerings, if any, may be offered for sale to the general public in a Syndicated
Community Offering through a syndicate of registered broker-dealers to be formed
and managed by Trident Securities. The Holding Company and the Bank expect to
market any shares which remain unsubscribed after the Subscription and Community
Offerings through a Syndicated Community Offering. The Holding Company and the
Bank have the right to reject orders in whole or part in their sole discretion
in the Syndicated Community Offering. Neither Trident Securities nor any
registered broker-dealer shall have any obligation to take or purchase any
shares of Common Stock in the Syndicated Community Offering; however, Trident
Securities has agreed to use its best efforts in the sale of shares in the
Syndicated Community Offering.
The price at which Common Stock is sold in the Syndicated Community
Offering will be the same price as in the Subscription and Community Offerings.
Subject to overall purchase limitations, no person will be permitted to
subscribe in the Syndicated Community Offering for more than $100,000 or 10,000
shares of Common Stock.
Trident Securities may enter into agreements with broker-dealers ("Selected
Dealers") to assist in the sale of the shares in the Syndicated Community
Offering. No orders may be placed or filled by or for a Selected Dealer during
the Subscription Offering. After the close of the Subscription Offering, Trident
Securities will instruct Selected Dealers as to the number of shares to be
allocated to each Selected Dealer. Only after the close of the Subscription
Offering and upon allocation of shares to Selected Dealers may Selected Dealers
take orders from their customers. During the Subscription and Community
Offerings, Selected Dealers may only solicit indications of interest from their
customers to place orders with the Holding Company as of a certain date ("Order
Date") for the purchase of shares of Common Stock. When and if Trident
Securities and the Holding Company believe that enough indications of interest
and orders have not been received in the Subscription and Community Offerings to
consummate the Conversion, Trident Securities will request, as of the Order
Date, Selected Dealers to submit orders to purchase shares for which they have
previously received indications of interest from their customers. Selected
Dealers will send confirmations of the orders to such customers on the next
business day after the Order Date. Selected Dealers will debit the accounts of
their customers on the "Settlement Date" which date will be three business days
from the Order Date. Customers who authorize Selected Dealers to debit their
brokerage accounts are required to have the funds for payment in their account
on but not before the Settlement Date. On the Settlement Date, Selected Dealers
will remit funds to the account established by the Bank for each Selected
Dealer. Each customer's funds so forwarded to the Bank, along with all other
accounts held in the same title, will be insured by the FDIC up to $100,000 in
accordance with applicable FDIC regulations. After payment has been received by
the Bank from Selected Dealers, funds will earn interest at the Bank's passbook
rate until the consummation or
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termination of the Conversion. Funds will be promptly returned, with interest,
in the event the Conversion is not consummated as described above.
The Syndicated Community Offering will terminate no more than 45 days
following the Subscription Expiration Date, unless extended by the Holding
Company and the Bank with the approval of the OTS.
LIMITATIONS ON PURCHASE OF SHARES. The Plan also provides for certain
additional limitations to be placed upon the purchase of shares in the
Conversion. Specifically, no person (other than a Tax-Qualified Employee Plan)
by himself or herself or with an associate, and no group of persons acting in
concert, may subscribe for or purchase more than $200,000 of Common Stock
offered in the Conversion. Officers and directors and their associates may not
purchase, in the aggregate, more than 35% of the shares to be sold in the
Conversion. For purposes of the Plan, the members of the Board of Directors are
not deemed to be acting in concert solely by reason of their Board membership.
For purposes of this limitation, an associate of a person does not include a
Tax-Qualified Employee Plan or Non-Tax-Qualified Employee Plan. Also, for
purposes of this limitation, an associate of an officer or director does not
include a Tax-Qualified Employee Plan or a recognition and retention plan, such
as the RRP. Moreover, any shares attributable to the officers and directors and
their associates, but held by a Tax-Qualified Employee Plan (other than that
portion of a plan which is self-directed) shall not be included in calculating
the number of shares which may be purchased under the limitations in this
paragraph. Shares purchased by employees who are not officers or directors of
the Bank, or their associates, are not subject to this limitation. The term
"associate" is used above to indicate any of the following relationships with a
person: (i) any corporation or organization (other than the Holding Company or
the Bank or a majority-owned subsidiary of the Holding Company or the Bank) of
which a person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity security; (ii) any trust
or other estate in which such person has a substantial beneficial interest or as
to which such person serves as trustee or in a similar fiduciary capacity; and
(iii) any relative or spouse of such person or any relative of such spouse who
has the same home as such person or who is a director or officer of the Holding
Company or the Bank or any subsidiary of the Holding Company or the Bank.
The Boards of Directors of the Holding Company and the Bank may, in their
sole discretion, decrease the maximum purchase limitation referred to above or
increase the maximum purchase limitation up to 9.99% of the shares being offered
in the Conversion, provided that orders for shares exceeding 5.0% of the shares
being offered in the Conversion shall not exceed, in the aggregate, 10% of the
shares being offered in the Conversion. Requests to purchase additional shares
of Holding Company Common Stock under this provision will be allocated by the
Boards of Directors on a pro rata basis giving priority in accordance with the
priority rights set forth above. DEPENDING UPON MARKET AND FINANCIAL CONDITIONS,
AND SUBJECT TO CERTAIN REGULATORY LIMITATIONS, THE BOARDS OF DIRECTORS OF THE
HOLDING COMPANY AND THE BANK, WITH THE APPROVAL OF THE OTS AND WITHOUT FURTHER
APPROVAL OF THE MEMBERS, MAY INCREASE OR DECREASE ANY OF THE ABOVE PURCHASE
LIMITATIONS AT ANY TIME. To the extent that shares are available, each
subscriber must subscribe for a minimum of 25 shares. In computing the number of
shares to be allocated, all numbers will be rounded down to the next whole
number.
Common Stock purchased in the Conversion will be freely transferable except
for shares purchased by executive officers and directors of the Bank or the
Holding Company and except as described below. See "- Restrictions on
Transferability." In addition, under National Association of Securities Dealers,
Inc. ("NASD") guidelines, members of the NASD and their associates are subject
to certain restrictions on transfer of securities purchased in accordance with
Subscription Rights and to certain reporting requirements upon purchase of such
securities.
MARKETING ARRANGEMENTS
The Holding Company and the Bank have engaged Trident Securities as a
financial advisor and marketing agent in connection with the offering of the
Common Stock, and Trident Securities has agreed to use its best efforts to
solicit subscriptions and purchase orders for shares of Common Stock in the
Offerings. Trident Securities is a member of the NASD and an SEC-registered
broker-dealer. Trident Securities is headquartered in Raleigh, North Carolina,
and its telephone number is (919) 781-8900. Trident Securities will provide
various services including, but not limited to, (i) training and educating the
Bank's directors, officers and employees regarding the mechanics
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and regulatory requirements of the stock sales process; (2) providing its
employees to staff the Stock Information Center to assist the Bank's customers
and internal stock purchasers and to keep records of orders for shares of Common
Stock; and (3) targeting the Holding Company's sales efforts, including
preparation of marketing materials. Based upon negotiations between the Holding
Company and the Bank concerning fee structure, Trident Securities will receive a
fee of $150,000. In the event that a selected dealers agreement is entered into
in connection with a Syndicated Community Offering, the Bank will pay a fee to
be determined to such selected dealers, for shares sold by an NASD member firm
pursuant to a selected dealers agreement. Fees to Trident Securities and to any
other broker-dealer may be deemed to be underwriting fees, and Trident
Securities and such broker-dealers may be deemed to be underwriters. Trident
Securities will also be reimbursed for its reasonable out of pocket expenses in
an amount not to exceed $10,000 and reasonable legal fees and expenses not to
exceed $25,000 without the prior approval of the Bank. Trident Securities has
been paid $10,000 as an advance against these expenses. The Holding Company and
the Bank have agreed to indemnify Trident Securities for reasonable costs and
expenses in connection with certain claims or liabilities, including certain
liabilities under the Securities Act.
In addition, directors and executive officers of the Holding Company and
the Bank, may to a limited extent and subject to applicable state law,
participate in the solicitation of offers to purchase Common Stock. Other
employees of the Bank may participate in the Subscription and Community Offering
in administrative capacities, providing clerical work in effecting a sales
transaction or answering questions of a potential purchaser provided that the
content of the employee's responses is limited to information contained in the
Prospectus or other offering document. Other questions of prospective purchasers
will be directed to registered representatives of Trident Securities. Such other
employees have been instructed not to solicit offers to purchase Common Stock or
provide advice regarding the purchase of Common Stock. Sales of Common Stock by
directors, executive officers and registered representatives will be made from
the Stock Information Center. The Holding Company will rely on Rule 3a4-1 under
the Exchange Act, and sales of Common Stock will be conducted within the
requirements of Rule 3a4-1, so as to permit officers, directors and employees to
participate in the sale of Common Stock except in some states where only
registered broker-dealers may sell. No officer, director or employee of the
Holding Company or the Bank will be compensated in connection with his
participation by the payment of commissions or other remuneration based either
directly or indirectly on the transactions in the Common Stock.
PARTICIPATION BY MANAGEMENT
The following table sets forth information regarding intended Common Stock
purchases by each of the directors of the Bank and the Holding Company, by Mr.
Hermreck, and by all directors and officers as a group. This table excludes
shares to be purchased by the ESOP or proposed Restricted Stock Awards under the
proposed RRP or proposed option grants pursuant to the proposed Stock Option
Plan. See "Management - Benefit Plans." The directors and officers of the Bank
have indicated their intention to purchase in the Conversion an aggregate of
$1,100,000 of Common Stock, equal to 12.3%, 10.5%, 9.1%, and 7.9% of the number
of shares to be issued in the Subscription and Community Offering, at the
minimum, midpoint, maximum and 15% above the maximum of the Estimated Valuation
Range, respectively. For information regarding options and restricted stock
intended to be awarded to management pursuant to the proposed Stock Option Plan
and the proposed RRP, see "Management - Benefit Plans."
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<TABLE>
<CAPTION>
Aggregate Number Percent
Purchase of at
Name Title Price Shares Midpoint
- -------------------- ------------------------------------ ---------- -------- ---------
<S> <C> <C> <C> <C>
Robert E. McCrorey Chairman of the Board and President $ 200,000 20,000 1.9%
Edgar L. Radley Director 70,000 7,000 0.6%
Rodney G. Rounkles Director 60,000 6,000 0.6%
Cecil E. Lamb Director 60,000 6,000 0.6%
Richard N. Cox Director 200,000 20,000 1.9%
Robert L. Lalumondier Director 10,000 1,000 0.1%
Larry E. Hermreck Chief Executive Officer 200,000 20,000 1.9%
Other officers (8 persons) 300,000 30,000 2.9%
--------- ------
All directors and officers as a group (15 persons) $1,100,000 110,000 10.5%
</TABLE>
STOCK PRICING AND NUMBER OF SHARES TO BE ISSUED
Federal regulations require that the aggregate Purchase Price of the
securities of a thrift institution sold in connection with its conversion must
be based on an appraised aggregate market value of the institution as converted
(i.e., taking into account the expected receipt of proceeds from the sale of the
securities in the conversion), as determined by an independent valuation. RP
Financial, which is experienced in the valuation and appraisal of business
entities, including thrift institutions involved in the conversion process, was
retained by the Bank to prepare an appraisal of the estimated pro forma market
value of the Common Stock.
RP Financial will receive a fee of $25,000 for its appraisal and assistance
in preparation of the Bank's business plan plus reasonable out-of-pocket
expenses not to exceed $5,000. The Holding Company has agreed to indemnify RP
Financial, under certain circumstances against liabilities and expenses
(including legal fees) arising out of, related to, or based upon the Conversion.
RP Financial has prepared an appraisal of the estimated pro forma market
value of the Common Stock taking into account market conditions for initial
public offerings of thrift stocks and the formation of Holding Company as the
holding company for the Bank. RP Financial's appraisal concluded that at June
14, 1996, an appropriate range for the estimated pro forma market value of the
Holding Company and the Bank, as converted, ranges from a minimum of $8,925,000
to a maximum of $12,075,000, with a midpoint of $10,500,000. Assuming that the
shares are sold at $10.00 per share in the Conversion, the estimated number of
shares to be issued in the Conversion is expected to be between 892,500 and
1,207,500. The appraisal involved a comparative evaluation of the operating and
financial statistics of the Bank with those of other thrift institutions. The
appraisal also took into account such other factors as the market for thrift
institution stocks generally, prevailing economic conditions, both nationally
and in Missouri, which affect the operations of thrift institutions, the
competitive environment within which the Bank operates and the effect of the
Bank becoming a subsidiary of the Holding Company. No detailed individual
analysis of the separate components of the Holding Company's and the Bank's
assets and liabilities was performed in connection with the evaluation. The Plan
of Conversion requires that all of the shares subscribed for in the Subscription
and Community Offering be sold at the same price per share. The Board of
Directors of the Holding Company and the Bank have reviewed the appraisal of RP
Financial and in determining the reasonableness and adequacy of such appraisal
consistent with OTS regulations and policies, have reviewed the methodology and
reasonableness of the assumptions utilized by RP Financial in the preparation of
such appraisal.
No sale of the shares will take place unless, prior thereto, RP Financial
confirms to the Bank, the Holding Company and the OTS that, to the best of RP
Financial's knowledge and judgment, nothing of a material nature has occurred
which would cause RP Financial to conclude that the actual aggregate Purchase
Price was incompatible with its estimate of the total pro forma market value of
the Common Stock at the time of the sale. If, however, the facts do not justify
such a statement, a new Estimated Valuation Range and price per share may be
set. Under such circumstances, the Holding Company will be required to
resolicit, and subscribers would have the right to modify or rescind their
subscriptions and to have their subscription funds returned promptly with
interest and holds on funds authorized for withdrawal from deposit accounts
would be released or reduced; provided that if the pro forma market value of the
Bank upon Conversion has not decreased below $8,925,000 or increased to an
amount
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which does not exceed $13,886,250 (15% above the maximum of the Estimated
Valuation Range), the Holding Company and the Bank do not intend to resolicit
subscriptions unless it is determined after consultation with the OTS that a
resolicitation is required.
Depending upon market and financial conditions, the number of shares issued
may be more or less than the range in number of shares shown above. A decrease
in the number of shares to be issued in the Conversion would increase a
purchaser's ownership interest and both pro forma net income and net worth on a
per share basis while decreasing these amounts on an aggregate basis. In the
event of a resolicitation, subscribers will be afforded the opportunity to
increase, decrease or maintain their previously submitted order. In the event a
new valuation range is established by RP Financial, such new range will be
subject to approval by the OTS and the Holding Company will be required to
resolicit. The Holding Company will also be required to resolicit if the
aggregate Purchase Price of Common Stock sold in the Conversion is less than the
minimum of the Estimated Valuation Range or above 15% above the maximum of the
Estimated Valuation Range.
If purchasers can not be found for an insignificant residue of unsubscribed
shares from the general public, other purchase arrangements will be made by the
Boards of Directors of the Bank and the Holding Company, if possible. Such other
purchase arrangements will be subject to the approval of the OTS and may provide
for purchases by directors, officers, their associates and other persons in
excess of the limitations discussed herein. If such other purchase arrangements
cannot be made, the Subscription and Community Offering will terminate.
In preparing its valuation of the pro forma market value of the Holding
Company and the Bank, as converted, RP Financial relied upon and assumed the
accuracy and completeness of all financial and statistical information provided
by the Bank and the Holding Company. RP Financial also considered information
based upon other publicly available sources which it believes are reliable.
However, RP Financial does not guarantee the accuracy and completeness of such
information and did not independently verify the financial statements and other
data provided by the Bank and the Holding Company or independently value the
assets or liabilities of the Bank and the Holding Company. THE VALUATION BY RP
FINANCIAL IS NOT INTENDED AND MUST NOT BE CONSTRUED AS A RECOMMENDATION OF ANY
KIND AS TO THE ADVISABILITY OF VOTING TO APPROVE THE CONVERSION OR OF PURCHASING
SHARES OF COMMON STOCK. MOREOVER, BECAUSE THE VALUATION IS NECESSARILY BASED
UPON ESTIMATES OF AND PROJECTIONS AS TO A NUMBER OF MATTERS (INCLUDING CERTAIN
ASSUMPTIONS AS TO EXPENSE FACTORS AFFECTING THE NET PROCEEDS FROM THE SALE OF
COMMON STOCK IN THE CONVERSION AND AS TO THE NET EARNINGS ON SUCH NET PROCEEDS),
ALL OF WHICH ARE SUBJECT TO CHANGE FROM TIME TO TIME, NO ASSURANCE CAN BE GIVEN
THAT PERSONS WHO PURCHASE SUCH SHARES IN THE CONVERSION WILL BE ABLE TO SELL
SUCH SHARES THEREAFTER AT OR ABOVE THE PURCHASE PRICE.
METHOD OF PAYMENT FOR SUBSCRIPTIONS
Subscribers must, before the Subscription Expiration Date, or such date to
which the Subscription Expiration Date may be extended, return an original stock
order form and certification to the Bank, properly completed, together with
cash, checks or money orders in an amount equal to the Purchase Price ($10.00
per share) multiplied by the number of shares for which subscription is made.
Subscriptions which are returned by mail must be received by the Bank by the
Expiration Date. Payment for stock purchases can also be accomplished through
authorization on the order form of withdrawals from accounts with the Bank.
Until completion or termination of the Conversion, subscribers who elect to make
payment through authorization of withdrawal from accounts with the Bank will not
be permitted to reduce the deposit balance in any such accounts below the amount
required to purchase the shares for which they subscribed. In such cases
interest will continue to be credited on deposits authorized for withdrawal
until the completion of the Conversion. Interest at the Bank's current passbook
rate per annum will be paid on amounts submitted in cash, check, bank draft or
money order. Authorized withdrawals from certificate accounts for the purchase
of Common Stock will be permitted without the imposition of early withdrawal
penalties or loss of interest. However, withdrawals from certificate accounts
that reduce the balance of said accounts below the required minimum for specific
interest rate qualification will cause the cancellation of the certificate
accounts, and the remaining balance will earn interest at the Bank's current
passbook rate per annum.
The beneficiaries of Individual Retirement Accounts ("IRAs") are deemed to
have the same subscription rights as other depositors. However, the IRA accounts
maintained at the Bank do not permit investment in Common Stock. A depositor
interested in using his IRA funds to purchase Common Stock must do so through a
self-directed
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IRA account. Since the Bank does not offer such accounts, it will allow such a
depositor to make a trustee to trustee transfer or other form of transfer of the
IRA on deposit at the Bank. There will be no early withdrawal or IRS penalties
for such transfers. The new trustee would hold the Common Stock in a self-
directed account in the same manner as the Bank now holds the depositor's IRA
funds. An annual administrative fee might be payable to the new trustee. The
Bank assumes no responsibility as to the selection of, or services performed by,
a new trustee.
Depositors interested in transferring IRA funds on deposit at the Bank to
purchase Common Stock should contact the Stock Information Center at (816)-
____________ as soon as possible so that the necessary forms may be completed
prior to the Expiration Date of the Subscription Offering. THIS PROCESS CANNOT
BE DONE THROUGH THE MAIL AND SUFFICIENT TIME SHOULD BE ALLOWED FOR THE
COMPLETION OF THE TRANSFER.
Stock subscriptions received by the Bank may not be modified, withdrawn or
canceled by the subscriber without the consent of the Bank and, if accepted by
the Bank, are final. Subscriptions which are not received by the Subscription
Expiration Date or are not in compliance with the Plan of Conversion or the
stock order form instructions may be deemed void by the Bank. The Bank and the
Holding Company have the right to extend the Subscription Expiration Date,
unless objected to by the OTS, or to waive or permit correction of incomplete or
improperly executed stock order forms, but does not represent that they will do
so.
If Tax-Qualified Employee Plans subscribe for shares during the
Subscription Offering, such plans will not be required to pay for the shares
subscribed for at the time they subscribe, but may pay for such shares of Common
Stock subscribed for by such plans at the actual Purchase Price upon
consummation of the Conversion, provided that, in the case of the ESOP, there is
a loan commitment to lend to the ESOP the aggregate Purchase Price of the shares
for which it subscribes.
To ensure that each purchaser receives a Prospectus at least 48 hours prior
to the Subscription Expiration Date in accordance with Rule 15c2-8 under the
Exchange Act, no Prospectus will be mailed any later than five days prior to
such date or hand delivered any later than two days prior to such date.
Execution of the order form will confirm receipt or delivery in accordance with
Rule 15c2-8. Order forms will only be distributed with a Prospectus. The Bank
will accept for processing only orders submitted on original order forms.
Payment by check, money order, bank draft or debit authorization to an existing
account at the Bank must accompany the order form.
RISK OF DELAYED OFFERING
In the event that all shares of the Common Stock are not sold in the
Subscription Offering and concurrent Community Offering, the Bank and the
Holding Company may extend the Community Offering for a period of up to 45 days
from the date of the termination of the Subscription Offering. Further
extensions are subject to OTS approval and may be granted for successive
periods, but not beyond 24 months from the date of the Special Meeting.
A material delay in the completion of the sale of all unsubscribed shares
in the Community Offering may result in a significant increase in the costs in
completing the Conversion. Significant changes in the Bank's operations and
financial condition, the aggregate market value of the shares to be issued in
the Conversion and general market conditions may occur during such material
delay. In the event the Conversion is not consummated within 24 months after the
date of the Special Meeting, the Bank would charge accrued Conversion costs to
then current period operations.
APPROVAL, INTERPRETATION, AMENDMENT AND TERMINATION
All interpretations of the Plan of Conversion, as well as the completeness
and validity of order forms, will be made by the Bank and the Holding Company
and will be final, subject to the authority of the OTS and the requirements of
applicable law. The Plan of Conversion provides that, if deemed necessary or
desirable by the Boards of Directors of the Bank and the Holding Company, the
Plan of Conversion may be substantively amended (including an amendment to
eliminate the formation of the Holding Company as part of the Conversion) by the
Boards of Directors of the Bank and the Holding Company, as a result of comments
from regulatory authorities or otherwise, at any time but only with the
concurrence of the OTS. Moreover, if the Plan of Conversion is amended,
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subscriptions which have been received prior to such amendment will not be
refunded if such amendment is not material to the transaction or otherwise
required by the OTS.
In the event that a decision is made to eliminate the Holding Company as
part of the Conversion, the Holding Company will withdraw its registration
statement from the SEC and the Bank will take all steps necessary to complete
the Conversion without the Holding Company, including filing any necessary
documents with the OTS. In such event, and provided there is no regulatory
action, directive or other consideration upon which basis the Bank determines
not to complete the Conversion, if permitted by the OTS the Bank will issue and
sell the common stock of the Bank and subscribers will be notified of the
elimination of the Holding Company and resolicited (i.e., permitted to affirm
their orders, in which case they will need affirmatively to reconfirm their
subscriptions prior to the expiration of the resolicitation offering or their
funds will be promptly refunded with interest at the Bank's current passbook
rate per annum; or be permitted to modify or rescind their subscriptions) and
notified of the time period within which they must affirmatively notify the Bank
of their intention to affirm, modify or rescind their subscription. In the event
that a holding company form of organization is not used, all other pertinent
terms of the Plan as described in "- Offering of Holding Company Common Stock"
will apply to the conversion of the Bank from the mutual to stock form of
organization and the sale of the Bank's common stock.
The Plan of Conversion will terminate if the sale of all shares is not
completed within 24 months after the date of the Special Meeting. The Plan of
Conversion may be terminated by the Board of Directors of the Bank with the
concurrence of the OTS at any time. A specific resolution approved by a two-
thirds vote of the Board of Directors would be required to terminate the Plan of
Conversion prior to the end of such 24-month period. See "Risk Factors -Possible
Consequences of Amendment to Plan of Conversion."
RESTRICTIONS ON REPURCHASE OF STOCK
For a period of three years following Conversion, the Holding Company may
not repurchase any shares of its capital stock, except in the case of an offer
to repurchase on a pro rata basis made to all holders of capital stock of the
Holding Company. Any such offer shall be subject to the prior approval of the
OTS. Furthermore, the Holding Company may not repurchase any of its stock (i) if
the result thereof would be to reduce the regulatory capital of the Bank below
the amount required for the liquidation account to be established pursuant to
OTS regulations and (ii) except in compliance with the requirements of the OTS'
capital distribution rule.
The above limitations are subject to the OTS conversion rules which
generally provide that the Holding Company may repurchase its capital stock
provided (i) no repurchases occur within one year following the Conversion
(except with OTS approval), (ii) repurchases during the second and third year
after conversion are part of an open market stock repurchase program that does
not allow for a repurchase of more than 5% of the Holding Company's outstanding
capital stock during a 12-month period, (iii) the repurchases do not cause the
Bank to become undercapitalized, and (iv) the Holding Company provides notice or
an application to the OTS at least ten days prior to the commencement of a
repurchase program and the OTS does not object. In addition, the above
limitations do not preclude repurchases of capital stock by the Holding Company
as otherwise permitted by the OTS or in the event applicable federal regulatory
limitations are subsequently liberalized.
RESTRICTIONS ON TRANSFERABILITY
THE SUBSCRIPTION RIGHTS DESCRIBED IN THIS PROSPECTUS ARE NON-TRANSFERABLE
AND SHALL BE AWARDED TO ELIGIBLE PERSONS WITHOUT PAYMENT. PRIOR TO THE
COMPLETION OF THE CONVERSION, FEDERAL REGULATIONS PROHIBIT ANY PERSON FROM
TRANSFERRING OR ENTERING INTO ANY AGREEMENT OR UNDERSTANDING TO TRANSFER THE
LEGAL OR BENEFICIAL OWNERSHIP OF THE SUBSCRIPTION RIGHTS ISSUED UNDER THE PLAN
OR THE SHARES OF COMMON STOCK TO BE ISSUED UPON THEIR EXERCISE. PERSONS
VIOLATING SUCH PROHIBITION MAY LOSE THEIR RIGHT TO PURCHASE STOCK IN THE
CONVERSION AND MAY BE SUBJECT TO SANCTIONS BY THE OTS. EACH PERSON EXERCISING
SUBSCRIPTION RIGHTS WILL BE REQUIRED TO CERTIFY THAT A PURCHASE OF COMMON STOCK
IS SOLELY FOR THE PURCHASER'S OWN ACCOUNT AND THAT THERE IS NO AGREEMENT OR
UNDERSTANDING REGARDING THE SALE OR TRANSFER OF SUCH SHARES. THE BANK AND THE
HOLDING COMPANY WILL PURSUE ANY AND ALL LEGAL AND EQUITABLE REMEDIES IN THE
EVENT THEY BECOME AWARE OF THE TRANSFER OF SUBSCRIPTION RIGHTS AND WILL NOT
HONOR ORDERS KNOWN BY THEM TO INVOLVE THE TRANSFER OF SUCH RIGHTS.
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Shares purchased by directors, executive officers or their associates in
the Conversion shall be subject to the restrictions that said shares shall not
be sold during the period of one year following the date of purchase, except in
the event of the death of the stockholder or resulting from an exchange of
securities in a merger or acquisition approved by applicable regulatory
authorities, in which event such restriction shall be released. Accordingly,
stock certificates issued by the Holding Company to directors, executive
officers and associates shall bear a legend giving appropriate notice of such
restriction and, in addition, the Bank and the Holding Company will give
appropriate instructions to the transfer agent for the Holding Company's Common
Stock with respect to the applicable restriction upon transfer of any restricted
shares. Any shares issued at a later date as a stock dividend, stock split or
otherwise, to holders of restricted stock, shall be subject to the same
restrictions that may apply to such restricted stock. Holding Company stock
(like the stock of most companies) is subject to the requirements of the
Securities Act. Accordingly, Holding Company stock may be offered and sold only
in compliance with such registration requirements or pursuant to an applicable
exemption from registration.
OTS regulations provide that for a period of three years following the
Conversion, without prior approval of the OTS, neither directors and officers of
the Holding Company, the Bank nor their associates may purchase shares of the
Holding Company, except from a broker registered with the SEC. This restriction
does not, however, apply to negotiated transactions involving more than one
percent of the Holding Company's outstanding Common Stock or the purchase of
stock made by or held by any one or more employee stock benefit plans which may
be attributable to individual directors or officers.
Holding Company stock received in the Conversion by persons who are not
"affiliates" of the Holding Company may be resold without registration. Shares
received by affiliates of the Holding Company (primarily the directors, officers
and principal stockholders of the Holding Company) will be subject to the resale
restrictions of Rule 144 under the Securities Act, which are discussed below.
Rule 144 generally requires that there be publicly available certain information
concerning the Holding Company, and that sales thereunder be made in routine
brokerage transactions or through a market maker. If the conditions of Rule 144
are satisfied, each affiliate (or group of persons acting in concert with one or
more affiliates) is entitled to sell in the public market, without registration,
in any three-month period, a number of shares which does not exceed the greater
of (i) 1% of the number of outstanding shares of Holding Company stock, or (ii)
if the stock is admitted to trading on a national securities exchange or
reported through the automated quotation system of a registered securities
association the average weekly reported volume of trading during the four weeks
preceding the sale.
INCOME TAX CONSEQUENCES
Consummation of the Conversion is expressly conditioned upon prior receipt
by the Bank of either a ruling from the Internal Revenue Service or an opinion
of Luse Lehman Gorman Pomerenk & Schick, P.C. with respect to federal taxation,
and a ruling of the Missouri taxation authorities or an opinion of KPMG Peat
Marwick LLP with respect to Missouri taxation, to the effect that consummation
of the Conversion will not be taxable to the converted Association or the
Holding Company.
An opinion has been received from Luse Lehman Gorman Pomerenk & Schick,
P.C. with respect to the proposed Conversion of the Bank to the stock form, to
the effect that (i) the Conversion will qualify as a reorganization under
Section 368(a)(1)(F) of the Code, and no gain or loss will be recognized to the
Bank in either its mutual form or its stock form by reason of the proposed
Conversion, (ii) no gain or loss will be recognized to the Bank upon the receipt
of money from the Holding Company for stock of the Bank; and no gain or loss
will be recognized to the Holding Company upon the receipt of money for Common
Stock of the Holding Company; (iii) the assets of the Bank in either its mutual
or its stock form will have the same basis before and after the Conversion; (iv)
the holding period of the assets of the Bank will include the period during
which the assets were held by the Bank in its mutual form prior to conversion;
(v) no gain or loss will be recognized by the deopsitors of the Bank upon the
issuance to them of withdrawable deposit accounts in the Bank after the
Conversion in the same dollar amount as their deposit accounts in the Bank plus
an interest in the Liquidation Account of the Bank, as described above, in
exchange for their deposit account in the Bank; (vi) the basis of the account
holder's deposit accounts in the Bank after the Conversion will be the same as
the basis of his deposit accounts in the Bank prior to the Conversion; (vii) the
basis of each account holder's interest in the Liquidation Account will be zero;
(viii) the basis of the Holding Company Common Stock to its shareholders will be
the Purchase Price thereof plus, in the case
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of stock acquired by account holders, the basis, if any in the Subscription
Rights and a shareholder's holding period for Holding Company Common Stock
acquired through the exercise of Subscription Rights shall begin on the date on
which the Subscription Rights are exercised; (ix) for purposes of Section 381 of
the Code, the Bank will be treated as if there had been no reorganization,
accordingly, the taxable year of the Bank will not end on the effective date of
the Conversion and the tax attributes of the Bank will be taken into account by
the Bank in stock form as if there had been no reorganization; (x) the part of
the taxable year of the Bank before the reorganization and the part of the
taxable year of the Bank after the reorganization will constitute a single
taxable year of the Bank; (xi) the Bank, immediately after Conversion, will
succeed to the bad debt reserve accounts of the Bank, in mutual form, and the
bad debt reserves will have the same character in the hands of the Bank after
Conversion as if no distribution or transfer had occurred; and (xii) the
creation of the liquidation account will have no effect on the Bank's taxable
income, deductions or addition to reserve for bad debts either in its mutual or
stock form.
The opinion from Luse Lehman Gorman Pomerenk & Schick, P.C. is based, among
other things, on certain assumptions, including the assumptions that the
exercise price of the Subscription Rights to purchase Holding Company Common
Stock will be approximately equal to the fair market value of that stock at the
time of the completion of the proposed Conversion. The Holding Company and the
Bank have received a letter issued by RP Financial stating that pursuant to RP
Financial's valuation, RP Financial is of the belief that Subscription Rights
issued in connection with the Conversion will have no value. The letter of RP
Financial and the federal and state tax opinions, respectively, referred to
herein are filed as exhibits to the Registration Statement. See "Additional
Information."
The Bank has also received an opinion of Luse Lehman Gorman Pomerenk &
Schick, P.C. to the effect that, based in part on the RP Financial Letter: (i)
no taxable income will be realized by depositors as a result of the receipt or
exercise of non-transferable Subscription Rights to purchase shares of Holding
Company Common Stock at fair market value; and (ii) no taxable income will be
realized by the Bank or Holding Company on the issuance of Subscription Rights
to eligible subscribers to purchase shares of Holding Company Common Stock at
fair market value.
If it is subsequently established that the Subscription Rights received by
such persons have an ascertainable fair market value, then, in such event, the
Subscription Rights will be taxable to the recipient in the amount of their fair
market value. In this regard, the Subscription Rights may be taxed partially or
entirely at ordinary income tax rates.
With respect to Missouri taxation, the Bank has received an opinion from
KPMG Peat Marwick LLP to the effect that, assuming the Conversion does not
result in any federal taxable income, gain or loss to the Bank in its mutual or
stock form, the Holding Company, the account holders, borrowers, officers,
directors and employees and Tax-Qualified Employee Plans of the Bank, the
Conversion should not result in any Missouri income tax liability to such
entities or persons.
Unlike a private letter ruling, the opinions of Luse Lehman Gorman Pomerenk
& Schick, P.C. and KPMG Peat Marwick LLP, as well as the RP Financial Letter,
have no binding effect or official status, and no assurance can be given that
the conclusions reached in any of those opinions would be sustained by a court
if contested by the IRS or the Missouri tax authorities.
RESTRICTIONS ON ACQUISITIONS OF STOCK AND
RELATED TAKEOVER DEFENSIVE PROVISIONS
Although the Boards of Directors of the Bank and the Holding Company are
not aware of any effort that might be made to obtain control of the Holding
Company after Conversion, the Boards of Directors, as discussed below, believe
that it is appropriate to include certain provisions as part of the Holding
Company's certificate of incorporation to protect the interests of the Holding
Company and its stockholders from takeovers which the Board
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of Directors of the Holding Company might conclude are not in the best interests
of the Bank, the Holding Company or the Holding Company's stockholders.
The following discussion is a general summary of the material provisions of
the Holding Company's certificate of incorporation and bylaws and certain other
regulatory provisions which may be deemed to have an "anti-takeover" effect. The
following description of certain of these provisions is necessarily general and,
with respect to provisions contained in the Holding Company's certificate of
incorporation and bylaws and the Bank's proposed stock charter and bylaws,
reference should be made in each case to the document in question, each of which
is part of the Bank's application to the OTS and the Holding Company's
Registration Statement filed with the SEC. See "Additional Information."
PROVISIONS OF THE HOLDING COMPANY'S CERTIFICATE OF INCORPORATION AND BYLAWS
DIRECTORS. Certain provisions of the Holding Company's certificate of
incorporation and bylaws will impede changes in majority control of the Board of
Directors. The Holding Company's certificate of incorporation provides that the
Board of Directors of the Holding Company will be divided into three classes,
with directors in each class elected for three-year staggered terms except for
the initial directors. Thus, it would take two annual elections to replace a
majority of the Holding Company's Board. The Holding Company's certificate of
incorporation provides that the size of the Board of Directors may be increased
or decreased only by a majority vote of the Board. The certificate of
incorporation also provides that any vacancy occurring in the Board of
Directors, including a vacancy created by an increase in the number of
directors, shall be filled for the remainder of the unexpired term by a majority
vote of the directors then in office. Finally, the certificate and bylaws impose
certain notice and information requirements in connection with the nomination by
stockholders of candidates for election to the Board of Directors or the
proposal by stockholders of business to be acted upon at an annual meeting of
stockholders.
The certificate of incorporation provides that a director may only be
removed for cause by the affirmative vote of 80% of the shares eligible to vote.
Removal for "cause" is limited to the grounds for termination in the federal
regulations that applies to employment contracts of federally insured savings
institutions.
RESTRICTIONS ON CALL OF SPECIAL MEETINGS. The certificate of incorporation
of the Holding Company provides that a special meeting of stockholders may be
called by the Chairman of the Board of the Holding Company or pursuant to a
resolution adopted by a majority of the Board of Directors. Stockholders are not
authorized to call a special meeting.
ABSENCE OF CUMULATIVE VOTING. The Holding Company's certificate of
incorporation provides that there shall be no cumulative voting rights in the
election of directors.
AUTHORIZATION OF PREFERRED STOCK. The certificate of incorporation of the
Holding Company authorizes 500,000 shares of serial preferred stock, without par
value. The Holding Company is authorized to issue preferred stock from time to
time in one or more series subject to applicable provisions of law; and the
Board of Directors is authorized to fix the designations, and relative
preferences, limitations, voting rights, if any, including without limitation,
conversion rights of such shares (which could be multiple or as a separate
class). In the event of a proposed merger, tender offer or other attempt to gain
control of the Holding Company that the Board of Directors does not approve, it
might be possible for the Board of Directors to authorize the issuance of a
series of preferred stock with rights and preferences that would impede the
completion of such a transaction. An effect of the possible issuance of
preferred stock, therefore, may be to deter a future takeover attempt. The Board
of Directors has no present plans or understandings for the issuance of any
preferred stock but it may issue any preferred stock on terms which the Board
deems to be in the best interests of the Holding Company and its stockholders.
LIMITATION ON VOTING RIGHTS. The certificate of incorporation of the
Holding Company provides that (I) no person shall directly or indirectly offer
to acquire or acquire the beneficial ownership of more than 10% of any class of
equity security of the Holding Company (provided that such limitation shall not
apply to the acquisition of equity securities by any one or more tax-qualified
employee stock benefit plans maintained by the Holding Company, if the plan or
plans beneficially own no more than 25% of any class of such equity security of
the
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Holding Company); and that (ii) shares beneficially owned in violation of the
stock ownership restriction described above shall not be entitled to vote and
shall not be voted by any person or counted as voting stock in connection with
any matter submitted to a vote of stockholders. For these purposes, a person
(including management) who has obtained the right to vote shares of the Common
Stock pursuant to revocable proxies shall not be deemed to be the "beneficial
owner" of those shares if that person is not otherwise deemed to be a beneficial
owner of those shares.
The certificate of incorporation of the Holding Company further provides
that the Board of Directors of the Holding Company, when determining to take or
refrain from taking corporate action on any matter, including making or
declining to make any recommendation to the Holding Company's stockholders, may,
in connection with the exercise of its judgment in determining what is in the
best interest of the Holding Company, the Bank and the stockholders of the
Holding Company, give due consideration to all relevant factors, including,
without limitation, the social and economic effects of acceptance of such offer
on the Holding Company's customers and the Bank's present and future account
holders, borrowers and employees; the effect on the communities in which the
Holding Company and the Bank operate or are located; and the effect on the
ability of the Holding Company to fulfill the objectives of a savings and loan
holding company and of the Bank or future subsidiaries to fulfill the objectives
of a stock savings and loan association under applicable statutes and
regulations. The certificate of incorporation of the Holding Company also
authorize the Board of Directors to take certain actions to encourage a person
to negotiate for a change of control of the Holding Company or to oppose such a
transaction deemed undesirable by the Board of Directors including the adoption
of so-called shareholder rights plans. By having these standards and provisions
in the certificate of incorporation of the Holding Company, the Board of
Directors may be in a stronger position to oppose such a transaction if the
Board concludes that the transaction would not be in the best interest of the
Holding Company, even if the price offered is significantly greater than the
then market price of any equity security of the Holding Company.
PROCEDURES FOR CERTAIN BUSINESS COMBINATIONS. The certificate of
incorporation of the Holding Company requires that certain business combinations
between the Holding Company (or any majority-owned subsidiary thereof) and a 10%
or greater stockholder either (I) be approved by at least 80% of the total
number of outstanding voting shares of the Holding Company or (ii) be approved
by a majority of certain directors unaffiliated with such 10% or greater
stockholder or (iii) involve consideration per share generally equal to the
higher of (A) the highest amount paid by such 10% stockholder or its affiliates
in acquiring any shares of the Common Stock or (B) the "Fair Market Value"
(generally, the highest closing bid paid on the Common Stock during the 30 days
preceding the date of the announcement of the proposed business combination or
on the date the 10% or greater stockholder became such, whichever is higher).
AMENDMENT TO CERTIFICATE OF INCORPORATION AND BYLAWS. Amendments to the
Holding Company's certificate of incorporation must be approved by the Holding
Company's Board of Directors and also by a majority of the outstanding shares of
the Holding Company's voting stock; provided, however, that approval by at least
80% of the outstanding voting stock is generally required for certain provisions
(i.e., provisions relating to number, classification, election and removal of
directors, amendment of bylaws, call of special stockholder meetings, criteria
for evaluating certain offers, offers to acquire and acquisitions of control,
director liability, certain business combinations, power of indemnification, and
amendments to provisions relating to the foregoing in the certificate of
incorporation).
The bylaws may be amended by the affirmative vote of the total number of
directors of the Holding Company or the affirmative vote of at least 80% of the
total votes eligible to be voted at a duly constituted meeting of stockholders.
PURPOSE AND TAKEOVER DEFENSIVE EFFECTS OF THE HOLDING COMPANY'S CERTIFICATE
OF INCORPORATION AND BYLAWS. The Board of Directors of the Bank believes that
the provisions described above are prudent and will reduce the Holding Company's
vulnerability to takeover attempts and certain other transactions which have not
been negotiated with and approved by its Board of Directors. These provisions
will also assist the Bank in the orderly deployment of the Conversion proceeds
into productive assets during the initial period after the Conversion. The Board
of Directors believes these provisions are in the best interest of the Bank and
of the Holding Company and its stockholders. In the judgment of the Board of
Directors, the Holding Company's Board will be in the best
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position to determine the true value of the Holding Company and to negotiate
more effectively for what may be in the best interests of its stockholders.
Accordingly, the Board of Directors believes that it is in the best interests of
the Holding Company and its stockholders to encourage potential acquirors to
negotiate directly with the Board of Directors of the Holding Company and that
these provisions will encourage such negotiations and discourage hostile
takeover attempts. It is also the view of the Board of Directors that these
provisions should not discourage persons from proposing a merger or other
transaction at prices reflective of the true value of the Holding Company and
which is in the best interests of all stockholders.
Attempts to take over financial institutions and their holding companies
have become increasingly common. Takeover attempts which have not been
negotiated with and approved by the Board of Directors present to stockholders
the risk of a takeover on terms which may be less favorable than might otherwise
be available. A transaction which is negotiated and approved by the Board of
Directors, on the other hand, can be carefully planned and undertaken at an
opportune time in order to obtain maximum value for the Holding Company and its
stockholders, with due consideration given to matters such as the management and
business of the acquiring corporation and maximum strategic development of the
Holding Company's assets.
An unsolicited takeover proposal can seriously disrupt the business and
management of a corporation and cause it great expense. Although a tender offer
or other takeover attempt may be made at a price substantially above then-
current market prices, such offers are sometimes made for less than all of the
outstanding shares of a target company. As a result, stockholders may be
presented with the alternative of partially liquidating their investment at a
time that may be disadvantageous or retaining their investment in an enterprise
which is under different management and whose objectives may not be similar to
those of the remaining stockholders. The concentration of control, which could
result from a tender offer or other takeover attempt, could also deprive the
Holding Company's remaining stockholders of the benefits of certain protective
provisions of the Exchange Act, if the number of beneficial owners becomes less
than the 300 required for Exchange Act registration.
POTENTIAL ANTI-TAKEOVER EFFECTS. Despite the belief of the Bank and the
Holding Company as to the benefits to stockholders of these provisions of the
Holding Company's certificate of incorporation and bylaws, these provisions may
also have the effect of discouraging a future takeover attempt which would not
be approved by the Holding Company's Board, but pursuant to which stockholders
may receive a substantial premium for their shares over then-current market
prices. As a result, stockholders who might desire to participate in such a
transaction may not have any opportunity to do so. Such provisions will also
render the removal of the Holding Company's Board of Directors and of management
more difficult. The Boards of Directors of the Bank and the Holding Company,
however, have concluded that the potential benefits outweigh the possible
disadvantages.
Pursuant to applicable law, at any annual or special meeting of its
stockholders after the Conversion, the Holding Company may adopt additional
provisions to its certificate of incorporation regarding the acquisition of its
equity securities that would be permitted to a Delaware corporation. The Holding
Company and the Bank do not presently intend to propose the adoption of further
restrictions on the acquisition of the Holding Company's equity securities.
OTHER RESTRICTIONS ON ACQUISITIONS OF STOCK
DELAWARE ANTI-TAKEOVER STATUTE. The State of Delaware has enacted
legislation which provides that subject to certain exceptions a publicly held
Delaware corporation may not engage in any business combination with an
"interested stockholder" for three years after such stockholder became an
interested stockholder, unless, among other things, the interested stockholder
acquired at least 85% of the corporation's voting stock in the transaction that
resulted in the stockholder becoming an interested stockholder. This legislation
generally defines "interested stockholder" as any person or entity that owns 15%
or more of the corporation's voting stock. The term "business combination" is
defined broadly to cover a wide range of corporate transactions, including
mergers, sales of assets, issuances of stock, transactions with subsidiaries and
the receipt of disproportionate financial benefits. Under certain circumstances,
either the board of directors or both the board and two-thirds of the
stockholders other than the acquiror may approve a given business combination
and thereby exempt the corporation from the operation of the statute.
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However, these statutory provisions do not apply to Delaware corporations
with fewer than 2,000 stockholders or which do not have voting stock listed on a
national exchange or listed for quotation with a registered national securities
association. The Holding Company has applied to have the Common Stock listed on
the Nasdaq SmallCap Market.
FEDERAL REGULATION. A federal regulation prohibits any person prior to the
completion of a conversion from transferring, or entering into any agreement or
understanding to transfer, the legal or beneficial ownership of the Subscription
Rights issued under a plan of conversion or the stock to be issued upon their
exercise. This regulation also prohibits any person prior to the completion of a
conversion from offering, or making an announcement of an offer or intent to
make an offer, to purchase such Subscription Rights or stock. For three years
following conversion, this regulation prohibits any person, without the prior
approval of the OTS, from acquiring or making an offer (if opposed by the
institution) to acquire more than 10% of the stock of any converted savings
institution if such person is, or after consummation of such acquisition would
be, the beneficial owner of more than 10% of such stock. In the event that any
person, directly or indirectly, violates this regulation, the securities
beneficially owned by such person in excess of 10% shall not be counted as
shares entitled to vote and shall not be voted by any person or counted as
voting shares in connection with any matter submitted to a vote of stockholders.
Federal law provides that no company "directly or indirectly or acting in
concert with one or more persons, or through one or more subsidiaries, or
through one or more transactions," may acquire "control" of a savings and loan
association at any time without the prior approval of the OTS. "Acting in
concert" is defined very broadly. In addition, federal regulations require that,
prior to obtaining control of a savings and loan association, a person, other
than a company, must give 60 days' prior notice to the OTS and have received no
OTS objection to such acquisition of control. Any company that acquires such
control becomes a "savings and loan holding company" subject to registration,
examination and regulation as a savings and loan holding company. Under federal
law (as well as the regulations referred to below) the term "savings and loan
association" includes state and federally chartered SAIF-insured institutions
and federally chartered savings banks whose accounts are insured by the FDIC's
BIF and holding companies thereof.
Control, as defined under federal law, means ownership, control of or
holding irrevocable proxies representing more than 25% of any class of voting
stock, control in any manner of the election of a majority of the savings and
loan association's directors, or a determination by the OTS that the acquiror
has the power to direct, or directly or indirectly to exercise a controlling
influence over, the management or policies of the institution. Acquisition of
more than 10% of any class of a savings and loan association's voting stock, if
the acquiror also is subject to any one of eight "control factors," constitutes
a rebuttable determination of control under the regulations. Such control
factors include the acquiror being one of the two largest stockholders. The
determination of control may be rebutted by submission to the OTS, prior to the
acquisition of stock or the occurrence of any other circumstances giving rise to
such determination, of a statement setting forth facts and circumstances which
would support a finding that no control relationship will exist and containing
certain undertakings. The regulations provide that persons or companies which
acquire beneficial ownership exceeding 10% or more of any class of a savings and
loan association's stock must file with the OTS a certification that the holder
is not in control of such institution, is not subject to a rebuttable
determination of control and will take no action which would result in a
determination or rebuttable determination of control without prior notice to or
approval of the OTS, as applicable.
DESCRIPTION OF CAPITAL STOCK
HOLDING COMPANY CAPITAL STOCK
The 4,000,000 shares of capital stock authorized by the Holding Company
certificate of incorporation are divided into two classes, consisting of
3,500,000 shares of Common Stock ($.01 par value) and 500,000 shares of serial
preferred stock ($.01 par value). The Holding Company currently expects to issue
between 892,500 and 1,207,500 shares of Common Stock in the Conversion. The
aggregate stated value of the issued shares will constitute the capital account
of the Holding Company on a consolidated basis. The balance of the Purchase
Price of Common Stock, less expenses of Conversion, will be reflected as paid-in
capital on a consolidated basis. See
104
<PAGE>
"Capitalization." Upon payment of the Purchase Price for the Common Stock, in
accordance with the Plan, all such stock will be duly authorized, fully paid,
validly issued and nonassessable.
Each share of the Common Stock will have the same relative rights and will
be identical in all respects with each other share of the Common Stock. The
Common Stock of the Holding Company will represent non-withdrawable capital,
will not be of an insurable type and will not be insured by the FDIC.
Under Delaware law, the holders of the Common Stock will possess exclusive
voting power in the Holding Company. Each stockholder will be entitled to one
vote for each share held on all matters voted upon by stockholders, subject to
the limitation discussed under "Restrictions on Acquisitions of Stock and
Related Takeover Defensive Provisions - Provisions of the Holding Company's
Certificate of Incorporation and Bylaws - Limitation on Voting Rights." If the
Holding Company issues preferred stock subsequent to the Conversion, holders of
the preferred stock may also possess voting powers.
LIQUIDATION OR DISSOLUTION. In the unlikely event of the liquidation or
dissolution of the Holding Company, the holders of the Common Stock will be
entitled to receive -- after payment or provision for payment of all debts and
liabilities of the Holding Company (including all deposits in the Bank and
accrued interest thereon) and after distribution of the liquidation account
established upon Conversion for the benefit of Eligible Account Holders and
Supplemental Eligible Account Holders who continue their deposit accounts at the
Bank -- all assets of the Holding Company available for distribution, in cash or
in kind. See "The Conversion - Effects of Conversion to Stock Form on Depositors
and Borrowers of the Bank." If preferred stock is issued subsequent to the
Conversion, the holders thereof may have a priority over the holders of Common
Stock in the event of liquidation or dissolution.
NO PREEMPTIVE RIGHTS. Holders of the Common Stock will not be entitled to
preemptive rights with respect to any shares which may be issued. The Common
Stock will not be subject to call for redemption, and, upon receipt by the
Holding Company of the full purchase price therefor, each share of the Common
Stock will be fully paid and nonassessable.
PREFERRED STOCK. After Conversion, the Board of Directors of the Holding
Company will be authorized to issue preferred stock in series and to fix and
state the voting powers, designations, preferences and relative, participating,
optional or other special rights of the shares of each such series and the
qualifications, limitations and restrictions thereof. Preferred stock may rank
prior to the Common Stock as to dividend rights, liquidation preferences, or
both, and may have full or limited voting rights. The holders of preferred stock
will be entitled to vote as a separate class or series under certain
circumstances, regardless of any other voting rights which such holders may
have.
Except as discussed herein, the Holding Company has no present plans for
the issuance of the additional authorized shares of Common Stock or for the
issuance of any shares of preferred stock. In the future, the authorized but
unissued and unreserved shares of Common Stock will be available for general
corporate purposes including but not limited to possible issuance as stock
dividends or stock splits, in future mergers or acquisitions, under a cash
dividend reinvestment and stock purchase plan, in a future underwritten or other
public offering or under an employee stock ownership plan, stock option or
restricted stock plan. The authorized but unissued shares of preferred stock
will similarly be available for issuance in future mergers or acquisitions, in a
future underwritten public offering or private placement or for other general
corporate purposes. Except as described above or as otherwise required to
approve the transaction in which the additional authorized shares of Common
Stock or authorized shares of preferred stock would be issued, no stockholder
approval will be required for the issuance of these shares. Accordingly, the
Board of Directors of the Holding Company, without stockholder approval, can
issue preferred stock with voting and conversion rights which could adversely
affect the voting power of the holders of Common Stock.
RESTRICTIONS ON ACQUISITIONS. See "Restrictions on Acquisitions of Stock
and Related Takeover Defensive Provisions" for a description of certain
provisions of the Holding Company's certificate of incorporation and bylaws
which may affect the ability of the Holding Company's stockholders to
participate in certain transactions relating to acquisitions of control of the
Holding Company.
105
<PAGE>
DIVIDENDS. Upon consummation of the formation of the Holding Company, the
Holding Company's only asset will be the Bank's Common Stock. Although it is
anticipated that the Holding Company will retain approximately 50% of the net
proceeds in the Conversion, dividends from the Bank will be an important source
of income for the Holding Company. Should the Bank elect to retain its income,
the ability of the Holding Company to pay dividends to its own shareholders may
be adversely affected. Furthermore, if at any time in the future the Holding
Company owns less than 80% of the outstanding stock of the Bank, certain tax
benefits under the Code as to inter-company distributions will not be fully
available to the Holding Company and it will be required to pay federal income
tax on a portion of the dividends received from the Bank, thereby reducing the
amount of income available for distribution to the shareholders of the Holding
Company. For further information concerning the ability of the Bank to pay
dividends to the Holding Company, see "Dividends."
LEGAL AND TAX MATTERS
The legality of the Common Stock and the federal income tax consequences of
the Conversion will be passed upon for the Bank and the Holding Company by the
firm of Luse Lehman Gorman Pomerenk & Schick, P.C., Washington, D.C. 20015. The
Missouri state income tax consequences of the Conversion will be passed upon for
the Bank and the Holding Company by KPMG Peat Marwick LLP, Kansas City,
Missouri. Luse Lehman Gorman Pomerenk & Schick, P.C. and KPMG Peat Marwick LLP
have consented to the references herein to their opinions. Certain legal matters
regarding the Conversion will be passed upon for Trident Securities by Breyer &
Aguggia, Washington, D.C.
EXPERTS
The Consolidated Financial Statements of the Bank as of June 30, 1995 and
1994, and for the fiscal years ended June 30, 1995 and 1994 have been included
in this Prospectus in reliance on the report of KPMG Peat Marwick LLP, certified
public accountants, appearing elsewhere herein, and upon the authority of that
firm as experts in accounting and auditing.
RP Financial has consented to the publication herein of the summary of its
report to the Bank and the Holding Company setting forth its opinion as to the
estimated pro forma market value of the Common Stock upon Conversion and its
valuation with respect to Subscription Rights.
ADDITIONAL INFORMATION
The Holding Company has filed with the SEC a registration statement under
the Securities Act, with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the SEC, this Prospectus does not
contain all the information set forth in the registration statement. Such
information can be examined without charge at the public reference facilities of
the SEC located at 450 Fifth Street, NW, Washington, D.C. 20549, and copies of
such material can be obtained from the SEC at prescribed rates. The statements
contained herein as to the contents of any contract or other document filed as
an exhibit to the registration statement are, of necessity, brief descriptions
thereof and are not necessarily complete but do contain all material information
regarding such documents; each such statement is qualified by reference to such
contract or document.
The Bank has filed an Application for Conversion with the OTS with respect
to the Conversion. Pursuant to the rules and regulations of the OTS, this
Prospectus omits certain information contained in that Application. The
Application may be examined at the principal offices of the OTS, 1700 G Street,
N.W., Washington, D.C. 20552 and at the Midwest Regional Office of the OTS
located at 122 W. John Carpenter Freeway, Suite 600, Irving, Texas 75039.
106
<PAGE>
In connection with the Conversion, the Holding Company will register the
Common Stock with the SEC under Section 12(g) of the Exchange Act; and, upon
such registration, the Holding Company and the holders of its Common Stock will
become subject to the proxy solicitation rules, reporting requirements and
restrictions on stock purchases and sales by directors, officers and greater
than 10% stockholders, the annual and periodic reporting and certain other
requirements of the Exchange Act. Under the Plan, the Holding Company has
undertaken that it will not terminate such registration for a period of at least
three years following the Conversion.
A copy of the certificate of incorporation and bylaws of the Holding
Company are available without charge from the Bank.
107
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
EXCELSIOR SPRINGS, MISSOURI
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Auditors..................................................... F-2
Consolidated Balance Sheets as of March 31, 1996 (unaudited) and June 30, 1995
and 1994.......................................................................... F-3
Consolidated Statements of Earnings for the nine months ended March 31, 1996
and 1995 (unaudited) and the years ended June 30, 1995 and 1994................... F-4
Consolidated Statements of Equity for the nine months ended March 31, 1996
(unaudited) and for the years ended June 30, 1995 and 1994........................ F-5
Consolidated Statements of Cash Flows for the nine months ended March 31, 1996
and 1995 (unaudited) and for the years ended June 30, 1995 and 1994............... F-6
Notes to Consolidated Financial Statements......................................... F-7
</TABLE>
######
All financial statements of CBES Bancorp, Inc. have been omitted because CBES
Bancorp, Inc. has not yet issued any stock, has no assets and liabilities and
has not conducted any business other than of an organizational nature.
All schedules are omitted as the required information is not applicable or
because the required information is included in the consolidated financial
statements or related notes.
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
Community Bank of Excelsior Springs,
a Savings Bank:
We have audited the accompanying consolidated balance sheets of Community Bank
of Excelsior Springs, a Savings Bank, and subsidiary as of June 30, 1995 and
1994 and the related consolidated statements of earnings, equity and cash flows
for the years then ended. These consolidated financial statements are the
responsibility of Community Bank's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Community Bank of
Excelsior Springs, and subsidiary as of June 30, 1995 and 1994 and the results
of their operations and their cash flows for the years then ended, in conformity
with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
August 25, 1995, except for
footnote 13, which is as of May 14, 1996
Kansas City, Missouri
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1996 June 30,
-------------- --------------------
Assets (unaudited) 1995 1994
------ ---- ----
<S> <C> <C> <C>
Cash $ 768,211 604,665 692,685
Interest-bearing deposits in other financial institutions 1,316,396 2,469,045 4,194,393
Investment securities available-for-sale (note 2):
U.S. government and agency obligations (amortized cost of
$2,002,625 (unaudited), $2,003,750 and $2,005,250 in 1996
1995 and 1994, respectively) 1,980,820 1,962,320 1,993,610
Mutual fund (amortized cost of $1,078,676 and $1,392,823 in
1995 and 1994, respectively) - 1,078,676 1,038,585
Mortgage-backed securities held-to-maturity (estimated fair value
of $545,869 (unaudited), $3,911,886 and $4,796,508 in
1996, 1995 and 1994, respectively) (note 3) 548,742 3,869,572 4,834,152
Loans held for sale, net 979,260 1,518,908 105,268
Loans receivable, net (note 4) 76,294,107 77,361,061 53,348,212
Accrued interest receivable:
Loans receivable 562,077 504,442 305,369
Investment securities 13,842 34,386 41,486
Mortgage-backed securities 4,173 33,223 41,438
Real estate owned - - 81,053
Stock in Federal Home Loan Bank (FHLB), at cost 810,700 794,700 521,200
Office property and equipment, net (note 5) 1,286,445 1,288,352 1,193,561
Cash surrender value of life insurance and other assets (note 9) 1,602,741 1,581,076 151,761
---------- ---------- ----------
Total assets $ 86,167,514 93,100,426 68,542,773
========== ========== ==========
Liabilities and Equity
----------------------
Liabilities:
Deposits (note 6) $ 67,916,486 68,274,476 60,180,445
FHLB advances (note 7) 9,000,000 15,876,915 -
Accrued expenses and other liabilities 517,027 477,188 449,059
Accrued interest payable on deposits 137,899 104,769 61,836
Advance payments by borrowers for property taxes and
insurance 461,996 864,780 801,869
Income taxes payable (receivable) (note 8):
Current 221,442 (5,560) 51,177
Deferred 30,000 27,000 17,451
---------- ---------- ----------
Total liabilities 78,284,850 85,619,568 61,561,837
Equity:
Retained earnings (notes 10, 11 and 12) 7,895,747 7,505,716 7,342,158
Unrealized (losses) on available-for-sale securities,
net of tax (13,083) (24,858) (361,222)
---------- ---------- ----------
Total equity 7,882,664 7,480,858 6,980,936
Commitments (note 4)
---------- ---------- ----------
Total liabilities and equity $ 86,167,514 93,100,426 68,542,773
========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
Consolidated Statements of Equity
<TABLE>
<CAPTION>
Net loss on
available-for-
Retained sale securities,
earnings net of tax Total
-------- ---------- -----
<S> <C> <C> <C>
Balance at June 30, 1993 $ 6,641,448 (332,165) 6,309,283
Initial adoption of Financial Accounting Standards
Board Statement No. 115, on July 1, 1993, net of
taxes - 10,951 10,951
Net earnings 700,710 - 700,710
Increase in unrealized loss on available-for-sale
securities, net of taxes - (40,008) (40,008)
--------- -------- ---------
Balance at June 30, 1994 7,342,158 (361,222) 6,980,936
Net earnings 163,558 - 163,558
Writedown of investment in mutual fund - 314,148 314,148
Decrease in unrealized loss on available-for-sale
securities, net of tax - 22,216 22,216
--------- -------- ---------
Balance at June 30, 1995 7,505,716 (24,858) 7,480,858
Net earnings (unaudited) 390,031 - 390,031
Decrease in unrealized loss on available-for-sale
securities, net of tax (unaudited) - 11,775 11,775
--------- -------- ---------
Balance at March 31, 1996 (unaudited) $ 7,895,747 (13,083) 7,882,664
========= ======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
March 31, Years ended June 30,
----------------- --------------------
1996 1995 1995 1994
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 390,031 27,684 163,558 700,710
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Provision for loan losses 188,341 143,056 171,277 33,590
Depreciation 95,862 84,719 118,250 108,125
Net realized (gain) loss on sale of
securities available-for-sale (54,205) - - 135,933
Writedown of investment in mutual fund - 314,148 314,148 -
Gain on disposition of real estate owned, net - (2,376) (5,822) (14,611)
Proceeds from sale of loans held for sale 12,700,276 1,160,948 4,763,106 15,949,331
Origination of loans held for sale (12,021,352 (1,363,937) (6,134,640) (15,914,268)
Gain on sale of loans, net (139,277) (4,948) (42,106) (140,331)
Premium amortization and accretion of
discounts and deferred loan fees (191,488) (212,910) (301,901) (115,783)
Deferred income taxes (benefit) (4,850) 14,000 21,464 (7,055)
FHLB stock dividends (16,000) - - -
Changes in assets and liabilities:
Accrued interest receivable (8,041) (66,169) (183,758) (9,798)
Other assets (21,663) 7,873 (28,821) 24,540
Accrued expenses and other liabilities 39,839 65,416 180,940 92,240
Accrued interest payable on deposits 33,130 70,832 42,933 (11,234)
Current income taxes payable 227,002 (89,860) (56,737) 20,051
---------- ----------- ----------- -----------
Net cash provided by (used in)
operating activities 1,217,605 148,476 (978,109) 851,440
---------- ----------- ----------- -----------
Cash flows from investing activities:
Net change in loans receivable 1,072,414 (18,731,012) (23,956,731) (6,546,599)
Purchase of FHLB stock - (51,700) (273,500) -
Proceeds from sales of securities available-for-sale 4,046,846 - - 1,430,309
Mortgage-backed securities principal repayments 405,676 753,316 964,384 1,572,064
Change in FHLB time deposits - 1,600,000 1,600,000 (1,600,000)
Purchase of office property and equipment (93,955) (143,604) (213,041) (70,330)
Proceeds from sale of real estate owned - 29,772 29,772 30,000
Purchase of life insurance policies - (1,420,000) (1,420,000) -
---------- ----------- ----------- -----------
Net cash provided by (used in)
investing activities $ 5,430,981 (17,963,228) (23,269,116) (5,184,556)
---------- ----------- ----------- -----------
</TABLE>
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
<TABLE>
<CAPTION>
Nine months ended
March 31, Years ended June 30,
----------------- --------------------
1996 1995 1995 1994
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Cash flows from financing activities: $ (357,990) 6,332,707 8,094,031 1,430,668
Net change in deposits
Proceeds from FHLB advances 16,650,000 22,100,000 32,000,000 -
Repayments of FHLB advances (23,526,915) (11,174,143) (16,123,085) -
Increase in advance payments by borrowers for
property taxes and insurance (402,784) (99,586) 62,911 155,265
---------- ---------- ---------- ----------
Net cash (used in) provided by
financing activities (7,637,689) 17,158,978 24,033,857 1,585,933
---------- ---------- ---------- ----------
Net decrease in cash and
cash equivalents (989,103) (655,774) (213,368) (2,747,183)
Cash and cash equivalents at the beginning of the period 3,073,710 3,287,078 3,287,078 6,034,261
---------- ---------- ---------- ----------
Cash and cash equivalents at the end of the period $ 2,084,607 2,631,304 3,073,710 3,287,078
========== ========== ========== ==========
Supplemental disclosure of cash flow information:
(Refunds received) cash paid during the period
for income taxes $ (15,054) 286,510 336,510 339,080
========== ========== ========== ==========
Cash paid during the period for interest $ 3,056,090 2,030,998 3,102,999 2,101,514
========== ========== ========== ==========
Supplemental schedule of noncash investing and
financing activities:
Conversion of loans to real estate owned $ - 10,897 10,897 250,993
========== ========== ========== ==========
Loans made to finance sales of real
estate owned $ - - 68,000 194,500
========== ========= ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED MARCH 31, 1996 AND 1995 (UNAUDITED)
AND THE YEARS ENDED JUNE 30, 1995 AND 1994
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
(a) Organization
------------
The consolidated financial statements include the accounts of Community
Bank of Excelsior Springs, a Savings Bank, and its wholly-owned
subsidiary, CBES Service Corporation, collectively referred to as
Community Bank. Community Bank of Excelsior Springs is chartered as a
federal mutual savings bank. CBES Service Corporation was formed in
March 1993 to provide insurance services. All significant intercompany
balances and transactions have been eliminated in consolidation.
(b) Unaudited Interim Financial Statements
--------------------------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the requirements for a presentation of
interim financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments, that are
necessary for a fair presentation of the interim periods have been
reflected.
(c) Cash and Cash Equivalents
-------------------------
For purposes of the cash flows, all short-term investments with a maturity
of three months or less at date of purchase are considered cash
equivalents.
(d) Mortgage-backed and Investment Securities
-----------------------------------------
Community Bank classifies securities as either available-for-sale or held-
to-maturity. Held-to-maturity securities are those which Community
Bank has the positive intent and ability to hold to maturity. All
other securities are classified as available-for-sale.
Securities classified as held-to-maturity are recorded at amortized cost.
Securities classified as available-for-sale are recorded at fair value
with unrealized net holding gains and losses, net of the related tax
effect, excluded from earnings and reported as a separate component of
equity until realized. A decline in the market value of any security
below cost that is deemed other than temporary is charged to income,
resulting in the establishment of a new cost basis for the security.
Pursuant to Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," and implementation
guidance issued in November 1995 by the Financial Accounting Standards
Board, Community Bank reclassified certain held-to-maturity mortgage-
backed securities with aggregate cost and fair value of $2,913,965 and
$2,963,159, respectively, to available-for-sale in December 1995.
These securities were disposed of in December 1995.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Premiums and discounts on mortgage-backed and investment securities are
amortized using the interest method over the life of the securities.
Realized gains or losses on sales are recognized using the specific
identification method.
(e) Loans Held for Sale
-------------------
Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated fair value. Fees received
on such loans are deferred and recognized in income as part of the
gain or loss on sale. At March 31, 1996 and June 30, 1995, all loans
held for sale are committed to be sold to a third party. The
valuation allowance at June 30, 1994 was $4,732. There was no
valuation allowance at March 31, 1996 or June 30, 1995.
(f) Deferred Loan Fees and Costs
----------------------------
Loan fees and certain direct loan origination costs are deferred, and the
net fee or cost is recognized as interest income using the interest
method over the life of the loan for loans generated for Community
Bank's portfolio.
(g) Allowance for Losses
--------------------
A general valuation allowance for losses on loans is established by
management based on its estimate of the amount required to maintain an
adequate allowance for loan losses reflective of the risks in the loan
portfolio. This estimate is based on reviews of the loan portfolio,
including assessment of the estimated net realizable value of the
related underlying collateral of and consideration of past loan loss
experience, current economic conditions and such other factors which,
in the opinion of management, deserve current recognition. Loans are
also subject to periodic examination by regulatory agencies. Such
agencies may require charge-off or additions to the allowance based
upon their judgments about information available at the time of their
examination.
Additionally, accrual of interest on loans is suspended when, in the
opinion of management, such interest will not be collected in the
ordinary course of business.
(h) Real Estate Owned
-----------------
Real estate properties acquired through foreclosure are initially recorded
at the lower of cost or the fair value, less estimated costs to sell,
of the underlying collateral at the time of foreclosure. Subsequent to
foreclosure, further declines in the fair value of such properties are
recorded as a reduction to the carrying value of those assets through
the establishment of an allowance for losses. No loss allowance was
provided by management as of June 30, 1994 because it believed the
recorded values of such properties were less than their respective
fair values.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(i) Stock in Federal Home Loan Bank (FHLB)
--------------------------------------
Community Bank is a member of the FHLB system. As a member, it is required
to purchase and hold stock in the FHLB of Des Moines in an amount
equal to the greater of (a) 1% of unpaid residential loans at the
beginning of each year, (b) 5% of FHLB advances, or (c) .3% of total
assets. Community Bank's investment in such stock is recorded at cost.
(j) Office Property and Equipment
-----------------------------
Office property and equipment are stated at cost less accumulated
depreciation. Depreciation is provided using the straight-line method
over the estimated useful lives (three to thirty years) of the
respective assets.
Maintenance and repairs are charged to expense and betterments are
capitalized. Gains and losses on disposition are reflected in current
operations.
(k) Income Taxes
------------
Community Bank accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective income tax bases. The effect on
deferred tax assets and liabilities for a change in tax rate is
recognized in income in the period that includes the enactment dates.
(l) Effect of New Financial Accounting Standards
--------------------------------------------
The Financial Accounting Standards Board has issued SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan," and SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosures." SFAS No. 114, as amended by SFAS No. 118, requires
that impaired loans be measured at the present value of expected
future cash flows discounted at the loan's effective interest rate or,
as a practical expedient, at the loan's observable market price or the
fair value of the collateral if the loan is collateral dependent.
Homogeneous loans, such as single-family loans and most categories of
consumer loans, are excluded from this requirement. Adoption of these
statements was effective for the fiscal year beginning July 1, 1995.
The impact of adopting SFAS Nos. 114 and 118 on Community Bank's
consolidated financial statements was not material.
SFAS No. 107 and SFAS No. 119, "Disclosures About Fair Value of Financial
Instruments," was effective for Community Bank for the year beginning
July 1, 1995 and requires disclosure of the fair value of financial
instruments, both assets and liabilities, recognized and not
recognized in the balance sheets.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SFAS No. 122, "Accounting for Mortgage Servicing Rights," will be effective
for Community Bank for the year beginning July 1, 1996 and generally
requires entities that sell or securitize loans and retain the
mortgage servicing rights to allocate total cost of the mortgage loans
to the mortgage servicing right and the loan based on their relative
fair value. Costs allocated to mortgage servicing rights should be
recognized as a separate asset and amortized over the period of
estimated net servicing income and evaluated for impairment based on
fair value. The adoption of this statement is not expected to have a
material effect on the consolidated financial statements.
(2) INVESTMENT SECURITIES
---------------------
A summary of investment securities available-for-sale at March 31, 1996 and
June 30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
---- ----- ------ -----
<S> <C> <C> <C> <C>
March 31, 1996 (unaudited):
U.S. government and
agency obligations
maturing within one
year $ 1,000,000 - (9,200) 990,800
U.S. government and
agency obligations
maturing after one
year but within five
years 1,002,625 - (12,605) 990,020
---------- ------- -------- ---------
$ 2,002,625 - (21,805) 1,980,820
========== ======= ======== =========
June 30, 1995:
U.S. government and
agency obligations
maturing after one year
but within five years $ 2,003,750 - (41,430) 1,962,320
Mutual fund 1,078,676 - - 1,078,676
---------- ------ -------- ---------
$ 3,082,426 - (41,430) 3,040,996
========== ====== ======== =========
June 30, 1994:
U.S. government and
agency obligations
maturing after one year
but within five years $ 2,005,250 12,700 (24,340) 1,993,610
Mutual fund 1,392,823 - (354,238) 1,038,585
---------- ------ ------- ---------
$ 3,398,073 12,700 (378,578) 3,032,195
========== ====== ======= =========
</TABLE>
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
During the year ended June 30, 1995, management determined that the decline
in market value of its mutual fund investment below cost was not
temporary and, accordingly, adjusted the cost basis of the investment
downward by $314,148 through a charge to earnings.
During the nine months ended March 31, 1996, Community Bank recognized
gross gains of $5,011 and no gross losses on proceeds of $1,083,687
from the sale of the mutual fund (unaudited). During the year ended
June 30, 1994, Community Bank recognized gross losses of $135,933 and
no gross gains from mutual fund proceeds of $1,430,309. No investment
securities were sold during the year ended June 30, 1995.
(3) MORTGAGE-BACKED SECURITIES
--------------------------
Mortgage-backed securities held-to-maturity consisted of the following at
March 31, 1996, June 30, 1995 and 1994:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Estimated
cost gains losses fair value
---- ----- ------ ----------
<S> <C> <C> <C> <C>
March 31, 1996 (unaudited):
Federal Home Loan
Mortgage Corporation
(FHLMC) participation
certificates $ 545,787 2,776 (5,687) 542,876
Pass-through certificate
guaranteed by Government
National Mortgage
Association (GNMA) 2,955 38 - 2,993
------- ----- ------ -------
$ 548,742 2,814 (5,687) 545,869
======= ===== ====== =======
June 30, 1995:
FHLMC participation
certificates $3,507,847 21,606 (15,923) 3,513,530
Pass-through certificate
guaranteed by GNMA 361,725 36,631 - 398,356
--------- ------ ------- ---------
$3,869,572 58,237 (15,923) 3,911,886
========= ====== ======= =========
June 30, 1994:
FHLMC participation
certificates $4,357,921 7,368 (88,102) 4,277,187
Pass-through certificate
guaranteed by GNMA 476,231 43,212 (122) 519,321
--------- ------ ------- ---------
$4,834,152 50,580 (88,224) 4,796,508
========= ====== ====== =========
</TABLE>
During the nine months ended March 31, 1996, Community Bank recognized
gross gains of $52,722 and gross losses of $3,528 on proceeds of
$2,989,177 from the sale of mortgage-backed securities available for
sale. There were no other sales of mortgage-backed securities.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(4) LOANS RECEIVABLE
----------------
Loans receivable consisted of the following:
<TABLE>
<CAPTION>
March 31, June 30,
----------------
1996 1995 1994
---- ---- ----
(unaudited)
<S> <C> <C> <C>
Real estate:
One-to-four family residential $ 51,491,727 53,737,889 38,895,957
Construction 17,887,526 16,221,145 7,857,377
Land 3,641,482 1,991,631 545,384
Commercial 1,025,441 818,371 316,757
Multifamily 321,018 134,412 162,528
Consumer loans 10,675,912 11,296,068 10,052,394
---------- ---------- ----------
85,043,106 84,199,516 57,830,397
Less:
Loans in process 8,142,999 6,390,936 4,068,155
Deferred loan origination fees
and discounts on loans, net 259,000 221,519 251,030
Allowance for loan losses 347,000 226,000 163,000
---------- ---------- ----------
$ 76,294,107 77,361,061 53,348,212
========== ========== ==========
</TABLE>
At March 31, 1996 and June 30, 1995, Community Bank was committed to make
first mortgage loans approximating $1,418,000 (unaudited) and $739,000
with $231,000 (unaudited) and $267,000 of these loans committed to be
sold to a third party. Fixed rate loan commitments approximated
$1,153,000 (unaudited) and $363,000 at March 31, 1996 and June 30,
1995, respectively, with rates ranging from 7.25% to 9.38%. Community
Bank services mortgage loans for others amounting to approximately
$30,967,000 (unaudited), $25,743,000 and $25,581,000 at March 31,
1996, June 30, 1995 and 1994, respectively.
At March 31, 1996 and June 30, 1995, Community Bank had loans of
approximately $970,800 (unaudited) and $971,700 to directors, officers
and management employees. During the nine months ended March 31, 1996
and year ended June 30, 1995, approximately $198,300 and $328,100 new
loans were made and repayments totaled approximately $199,200
(unaudited) and $143,200, respectively. Such loans were made in
accordance with Community Bank's normal lending practices.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of activity in the allowance for loan losses for the periods
ended March 31, 1996 and June 30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
March 31, June 30,
--------------- ---------------
1996 1995 1995 1994
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Balance at beginning of period $ 226,000 163,000 163,000 150,000
Provision for loan losses 188,341 143,056 171,277 33,590
Charge-offs (91,679) (157,980) (171,386) (48,399)
Recoveries 24,338 56,924 63,109 27,809
-------- -------- -------- -------
Balance at end of period $ 347,000 205,000 226,000 163,000
======== ======== ======== =======
</TABLE>
Community Bank evaluates each customer's creditworthiness on a case-by-case
basis. Residential loans with a loan-to-value ratio exceeding 80% are
required to have private mortgage insurance. Community Bank's
principal lending areas are the economically-diverse communities
northeast of Kansas City, Missouri.
(5) OFFICE PROPERTY AND EQUIPMENT
-----------------------------
Office property and equipment consist of the following:
<TABLE>
<CAPTION>
March 31, June 30,
---------------
1996 1995 1994
---- ---- ----
(unaudited)
<S> <C> <C> <C>
Land and land improvements $ 171,130 171,130 171,130
Office buildings 1,310,206 1,281,997 1,270,697
Furniture and equipment 758,756 691,621 492,743
--------- --------- ---------
2,240,092 2,144,748 1,934,570
Less accumulated depreciation 953,647 856,396 741,009
--------- --------- ---------
$ 1,286,445 1,288,352 1,193,561
========= ========= =========
</TABLE>
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(6) DEPOSITS
--------
Deposit balances are summarized as follows:
<TABLE>
<CAPTION>
March 31, 1996 June 30,
---------------------- -----------------------------------------
(unaudited) 1995 1994
------------------ ------------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance by interest rate:
Noninterest bearing
demand accounts - $ 1,521,496 2% $ 1,319,904 2% $ 935,738 1%
NOW accounts 2.25 - 2.00 7,919,039 12 7,601,014 11 7,618,888 13
Money market 2.50 - 2.75 5,777,598 9 5,874,186 9 8,178,549 14
Passbook accounts 2.25 - 2.75 3,656,235 5 3,740,235 5 3,951,662 6
---------- --- ---------- --- ---------- ---
18,874,368 28 18,535,339 27 20,684,837 34
---------- --- ---------- --- ---------- ---
Certificate accounts: 2.00 - 2.99 13,385 - 22,732 - 420,829 1
3.00 - 3.99 - - 853,408 1 16,473,626 27
4.00 - 4.99 2,215,415 3 7,548,143 11 11,093,535 18
5.00 - 5.99 35,459,555 52 11,569,757 17 8,718,946 15
6.00 - 6.99 10,709,347 16 22,091,710 33 953,574 2
7.00 - 7.99 159,659 1 7,022,435 10 643,919 1
8.00 - 8.99 484,757 - 628,466 1 865,752 1
9.00 - 9.99 - - 2,486 - 2,258 -
10.00 - 10.99 - - - - 1,411 -
12.00 - 12.99 - - - - 321,758 1
---------- --- ---------- --- ---------- ---
49,042,118 72 49,739,137 73 39,495,608 66
---------- --- ---------- --- ---------- ---
$ 67,916,486 100% $ 68,274,476 100% $ 60,180,445 100%
========== === ========== === ========== ===
Weighted average interest
rate on savings deposits
at period end 4.66% 4.84% 3.56%
==== ==== ====
Contractual maturity of
certificate accounts:
Under 12 months $ 39,370,835 60% $ 39,609,558 80% $ 23,789,567 60%
12 to 24 months 4,453,113 24 5,573,835 10 9,513,214 24
24 to 36 months 1,730,577 7 2,363,905 5 2,780,989 7
36 to 48 months 693,810 6 474,964 1 2,256,752 6
48 to 60 months 683,314 2 435,806 1 606,353 2
Over 60 months 2,110,469 1 1,281,069 3 548,733 1
----------- --- ----------- --- ----------- ---
$ 49,042,118 100% $ 49,739,137 100% $ 39,495,608 100%
=========== === =========== === =========== ===
</TABLE>
Deposits of $100,000 or more totaled $3,002,275 (unaudited), $3,132,000 and
$1,991,000 at March 31, 1996 and June 30, 1995 and 1994, respectively.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of interest expense on savings deposits for the periods
ended March 31, 1996 and 1995 and June 30, 1995 and 1994 are as
follows:
<TABLE>
<CAPTION>
Nine months ended Year ended
March 31, June 30,
--------------------- --------------------
1996 1995 1995 1994
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
NOW, passbook and money
market $ 265,279 276,219 397,213 437,993
Certificates of deposit 2,219,700 1,506,297 2,179,936 1,652,287
---------- --------- --------- ---------
$2,484,979 1,782,516 2,577,149 2,090,280
========== ========= ========= =========
</TABLE>
(7) FHLB Advances
-------------
Community Bank had the following debt outstanding from the Federal Home
Loan Bank of Des Moines at March 31, 1996 and June 30, 1995:
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
---- ----
(unaudited)
<S> <C> <C>
$3,000,000 advances, interest at 6.14% due
September 2000 $ 3,000,000 -
$3,000,000 advance, interest at 8.00% due
September 2009 - 2,919,860
$2,500,000 advance, interest at 8.03% due
December 2009 - 2,457,055
$2,000,000 advance, interest at 6.78% due
November 1995 - 2,000,000
$1,000,000 advance, interest at 6.65%
due October 1995 - 1,000,000
$2,000,000 advance, interest at 5.81% due
October 1996 2,000,000 -
$1,000,000 advance, interest at 5.78%
due June 1996 2,000,000 2,000,000
$1,000,000 advance, interest at 5.77%
due June 1997 1,000,000 1,000,000
$1,000,000 advance, interest at 5.86%
due June 1998 1,000,000 1,000,000
$10,000,000 line of credit, interest at
approximately 50 basis points above the
U.S. Treasury Bill rate (6.46% at June 30,
1995) maturing May 1996 - 3,500,000
---------- ----------
$ 9,000,000 15,876,915
========== ==========
</TABLE>
The advances and lines of credit to the FHLB are collateralized by first
mortgage loans.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Scheduled maturities of FHLB advances are as follows:
<TABLE>
<CAPTION>
Year ending
March 31,
---------
(unaudited)
<S> <C>
1997 $ 4,000,000
1998 1,000,000
1999 1,000,000
2000 -
2001 3,000,000
----------
$ 9,000,000
==========
</TABLE>
(8) Income Taxes
------------
Components of income tax expense are as follows:
<TABLE>
<CAPTION>
Federal State Total
------- ----- -----
<S> <C> <C> <C>
Nine months ended March 31, 1996 (unaudited):
Current $ 191,082 13,016 204,098
Deferred (11,000) 14,000 3,000
------- ------ -------
$ 180,082 27,016 207,098
======= ====== =======
Nine months ended March 31, 1995 (unaudited):
Current $ 185,700 24,200 209,920
Deferred 730 - 730
------- ------ -------
$ 186,430 24,220 210,650
======= ====== =======
Year ended June 30, 1995:
Current $ 257,355 34,334 291,689
Deferred 8,883 666 9,549
------- ------ -------
$ 266,238 35,000 301,238
======= ====== =======
Year ended June 30, 1994:
Current $ 303,736 46,000 349,736
Deferred 2,264 - 2,264
------- ------ -------
$ 306,000 46,000 352,000
======= ====== =======
</TABLE>
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Income tax expense has been provided at effective rates of 34.7% and 88.4%
(unaudited), and 64.8% and 33.4% (applied to earnings before taxes)
for the nine months ended March 31, 1996 and 1995, and the years ended
June 30, 1995 and 1994, respectively. The reasons for the differences
between the effective tax rates and the corporate federal income tax
rate of 34% are as follows:
<TABLE>
<CAPTION>
Nine months ended Year ended
March 31, June 30,
---------------- ------------------
1996 1995 1995 1994
---- ---- ---- ----
(unaudited)
<S> <C> <C> <C> <C>
Federal income tax rate 34.0% 34.0 34.0 34.0
Items affecting federal income tax rate:
Writedown of investment in
mutual fund - 44.8 23.0 -
Capital loss carryforward utilization - - - (.5)
State income tax net of federal benefit 3.0 6.7 5.0 2.9
Other (2.3) 2.9 2.8 (3.0)
---- ---- ---- ----
Effective income tax rate 34.7% 88.4 64.8 33.4
==== ==== ==== ====
</TABLE>
Deferred income taxes reflect the impact of "temporary differences" between
amounts of assets and liabilities for financial reporting purposes and
such amounts as measured by tax laws. Temporary differences which give
rise to deferred tax assets and liabilities at March 31, 1996 and June
30, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
March 31, Year ended June 30,
----------- --------------------
1996 1995 1994
---- ---- ----
(unaudited)
<S> <C> <C> <C>
Loan origination fees $ - - 20,000
Allowance for loan losses 106,000 56,000 39,000
Unrealized losses on assets available-for-sale 9,000 17,000 -
Writedown of investment in mutual fund - 129,000 150,000
Other 30,000 17,000 22,549
--------- -------- --------
Deferred income tax asset before valuation
allowance 145,000 219,000 231,549
Valuation allowance for capital losses on
investments - 107,000 120,000
--------- -------- --------
Deferred income tax asset 145,000 112,000 111,549
--------- -------- --------
Loan origination fees (77,000) (49,000) -
Fixed assets (63,000) (51,000) (105,000)
Other (35,000) (39,000) (24,000)
--------- -------- --------
Deferred income tax liability (175,000) (139,000) (129,000)
--------- -------- --------
Net deferred income tax liability $ (30,000) (27,000) (17,451)
========= ======== ========
</TABLE>
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(9) BENEFIT PLAN
------------
Effective March 1995, Community Bank adopted a supplemental retirement plan
to provide members of the Board of Directors and Officers with
supplemental retirement, disability and death benefits. The Plan
provides benefits for directors and officers, or their beneficiaries
after they have completed service to Community Bank. The benefits are
based on years of service and compensation level and are paid monthly
for ten years following retirement for directors and for fifteen years
following retirement for officers. Expense under the plan for the nine
months ended March 31, 1996 and for the year ended June 30, 1995 was
approximately $31,000 (unaudited) and $14,000. Community Bank
purchased life insurance policies in 1995 to fund its obligations
under the plans for $1,420,000.
(10) RETAINED EARNINGS
-----------------
Retained earnings at March 31, 1996 and June 30, 1995 and 1994 include
approximately $1,700,000 for which no provision for federal income tax
has been made. This amount represents an allocation of income to bad
debt deductions for income tax purposes only. Reduction of amounts
allocated for purposes other than income tax bad debt losses will
create income for tax purposes only, which will be subject to the then
current corporate income tax rate.
(11) REGULATORY CAPITAL REQUIREMENTS
-------------------------------
Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA)
and the capital regulations of the Office of Thrift Supervision (OTS)
promulgated thereunder require institutions to have a minimum
regulatory tangible capital equal to 1.5% of total assets, a minimum 3%
leverage capital ration and a minimum 8% risk-based capital ratio.
These capital standards set forth in the capital regulations must
generally be no less stringent than the capital standards applicable to
banks. FIRREA also specifies the required ratio of housing-related
assets in order to qualify as a savings institution. Community Bank met
the regulatory capital requirements at March 31, 1996 and June 30, 1995
and 1994.
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)
established additional capital requirements which require regulatory
action against depository institutions in one of the undercapitalized
categories defined in implementing regulations. Institutions such as
Community Bank, which are defined as well capitalized, must generally
have a leverage capital (core) ratio of at least 5%, a tier risk-based
capital ratio of at least 6% and a total risk-based capital ratio of at
least 10%. In November 1994, the OTS revised its regulations whereby
unrealized gains or losses on available-for-sale securities accounted
for under SFAS No. 115 are not considered in the determination of
regulatory capital. FDICIA also provides for increased supervision by
federal regulatory agencies, increased reporting requirements for
insured depository institutions and other changes in the legal and
regulatory environment for institutions.
(Continued)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK,
AND SUBSIDIARY
EXCELSIOR SPRINGS, MISSOURI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(12) PLAN OF CONVERSION
------------------
On May 14, Community Bank's Board of Directors approved a plan ("Plan") to
convert from a federally chartered mutual savings bank to a federally
chartered stock savings bank, subject to approval by Community Bank's
members. The Plan, which includes formation of a holding company, is
subject to approval by the OTS and includes the filing of a
registration statement with the Securities and Exchange Commission. As
of March 31, 1996, Community Bank had incurred $10,000 of costs
related to this conversion which is included in other assets. If the
conversion is ultimately successful, actual conversion costs will be
accounted for as a reduction in gross proceeds. If the conversion is
unsuccessful, the conversion costs will be expensed.
The Plan calls for the common stock of the holding company to be offered to
various parties in a subscription offering at a price based on an
independent appraisal. It is anticipated that any shares not purchased
in the subscription offering will be offered in a community offering.
Community Bank may not declare or pay a cash dividend if the effect thereof
would cause its net worth to be reduced below either the amount
required for the liquidation account discussed below or the regulatory
capital requirements imposed by the OTS.
At the time of conversion, Community Bank will establish a liquidation
account in an amount equal to its retained earnings as reflected in the
latest statement of financial condition used in the final conversion
prospectus. The liquidation account will be maintained for the benefit
of eligible account holders who continue to maintain their deposit
accounts in Community Bank after conversion. In the event of a complete
liquidation of Community Bank, and only in such an event, eligible
depositors who continue to maintain accounts shall be entitled to
receive a distribution from the liquidation account before any
liquidation may be made with respect to common stock.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH OTHER INFORMA TION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE HOLDING
COMPANY OR COMMUNITY BANK. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OF FERED HEREBY TO
ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE HOLDING COMPANY OR COMMUNITY BANK
SINCE ANY OF THE DATES AS OF WHICH INFORMATION IS FURNISHED HEREIN OR SINCE THE
DATE HEREOF.
_____________
TABLE OF CONTENTS
Page
----
Prospectus Summary.....................................................
Selected Consolidated Financial Information
and Other Data........................................................
Recent Financial Data..................................................
Risk Factors...........................................................
Community Bank of Excelsior Springs, A Savings Bank....................
CBES Bancorp, Inc......................................................
Capitalization.........................................................
Pro Forma Data.........................................................
Pro Forma Regulatory Capital...........................................
Use of Proceeds........................................................
Dividends..............................................................
Market for Common Stock................................................
Community Bank of Excelsior Springs, A Savings Bank, Consolidated
Statement of Earnings.................................................
Management's Discussion and Analysis of
Financial Condition and Results of Operations.........................
Business...............................................................
Regulation.............................................................
Management.............................................................
The Conversion.........................................................
Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions..................................................
Description of Capital Stock...........................................
Legal and Tax Matters..................................................
Experts................................................................
Additional Information.................................................
Index to Consolidated Financial Statements.............................
UNTIL THE LATER OF SEPTEMBER __, 1996, OR 25 DAYS AFTER COMMENCEMENT OF THE
OFFERING OF COMMON STOCK, ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
1,207,500 Shares
CBES
BANCORP, INC.
(Holding Company for Community Bank of Excelsior Springs)
Common Stock
_____________
PROSPECTUS
_____________
TRIDENT SECURITIES, INC.
August __, 1996
<PAGE>
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS OF COMMUNITY BANK OF
EXCELSIOR SPRINGS, A SAVINGS BANK
Generally, federal regulations define areas for indemnity coverage for federal
savings associations, as follows:
(a) Any person against whom any action is brought by reason
of the fact that such person is or was a director or officer of the savings
association shall be indemnified by the savings association for:
(i) Reasonable costs and expenses, including
reasonable attorneys' fees, actually paid or incurred by such
person in connection with proceedings related to the defense or
settlement of such action;
(ii) Any amount for which such person becomes liable
by reason of any judgment in such action;
(iii) Reasonable costs and expenses, including June 21,
1996 reasonable attorneys' fees, actually paid or incurred in any
action to enforce his rights under this section, if the person
attains a final judgment in favor of such person in such
enforcement action.
(b) Indemnification provided for in subparagraph (a) shall be
made to such officer or director only if the requirements of this subsection are
met:
(i) The savings association shall make the
indemnification provided by subparagraph (a) in connection with
any such action which results in a final judgment on the merits
in favor of such officer or director.
(ii) The savings association shall make the
indemnification provided by subparagraph (a) in case of
settlement of such action, final judgment against such director
or officer or final judgment in favor of such director or officer
other than on the merits except in relation to matters as to
which he shall be adjudged to be liable for negligence or
misconduct in the performance of duty, only if a majority of the
directors of the savings association determines that such a
director or officer was acting in good faith within what he was
reasonably entitled to believe under the circumstances was the
scope of his employment or authority and for a purpose which he
was reasonably entitled to believe under the circumstances was in
the best interest of the savings association or its members.
(c) As used in this paragraph:
(i) "Action" means any action, suit or other judicial
or administrative proceeding, or threatened proceeding, whether
civil, criminal, or otherwise, including any appeal or other
proceeding for review;
(ii) "Court" includes, without limitation, any court
to which or in which any appeal or any proceeding for review is
brought;
(iii) "Final Judgment" means a judgment, decree, or
order which is appealable and as to which the period for appeal
has expired and no appeal has been taken;
(iv) "Settlement" includes the entry of a judgment by
consent or by confession or upon a plea of guilty or of nolo contendere.
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS OF CBES BANCORP, INC.
Article ELEVENTH of CBES Bancorp, Inc.'s (the "Corporation") Certificate of
Incorporation sets forth circumstances under which directors, officers,
employees and agents of the Corporation may be insured or indemnified against
liability which they may incur in their capacities as such.
ELEVENTH:
A. Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a director
or officer of another corporation, including, without limitation, any Subsidiary
(as defined in Article EIGHTH of the Certificate of Incorporation of the
Corporation), partnership, joint venture, trust or other enterprise, including
service with respect to an employee benefit plan (hereinafter an "indemnitee"),
whether the basis of such proceeding is alleged action in an official capacity
as a director or officer or in any other capacity while serving as a director or
officer, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) reasonably incurred or suffered by such indemnitee in
connection therewith; provided, however, that, except as provided in Section C
hereof with respect to proceedings to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this Article
ELEVENTH shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Delaware General Corporation Law requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication"),
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise. The rights to indemnification and to the advancement
of expenses conferred in Sections A and B of this Article ELEVENTH shall be
contract rights and such rights shall continue as to an indemnitee who has
ceased to be a director or officer and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article ELEVENTH is not paid
in full by the Corporation within sixty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the Corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall also
be entitled to be paid the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its Board of Directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the indemnitee is proper
<PAGE>
in the circumstances because the indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by
the indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article ELEVENTH or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article ELEVENTH shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
Corporation's Certificate of Incorporation, Bylaws, agreement, vote of
stockholders or Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to time by a
majority vote of the Disinterested Directors, grant rights to indemnification
and to the advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<CAPTION>
Amount
------
<S> <C> <C>
* Legal Fees and Expenses.................................. $ 110,000
* Printing, Postage and Mailing............................ 50,000
* Appraisal and Business Plan Fees and Expense............. 32,000
* Accounting Fees and Expenses............................. 75,000
* Blue Sky Filing Fees and Expenses
(including counsel fees)................................ 15,000
Conversion Agent and Proxy Solicitation Fees 6,500
** Marketing Agent Fees and Expenses........................ 160,000
* Marketing Agent Counsel Fees............................. 25,000
* Filing Fees (NASD, OTS and SEC).......................... 19,894
* Other Expenses........................................... 31,606
----------
* Total................................................... $525,000
==========
</TABLE>
______________
* Estimated
** CBES Bancorp, Inc. has retained Trident Securities, Inc. ("Trident
Securities") to assist in the sale of common stock on a best efforts basis
in the Offerings. Trident Securities will receive fees of $150,000,
exclusive of estimated expenses of $10,000.
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Not Applicable.
ITEM 27. EXHIBITS:
The exhibits filed as part of this registration statement are as
follows:
(a) LIST OF EXHIBITS
1.1 Engagement Letter between Community Bank of Excelsior Springs, A Savings
Bank and Trident Securities, Inc.
1.2 Form of Agency Agreement among CBES Bancorp, Inc., Community Bank of
Excelsior Springs, A Savings Bank and Trident Securities, Inc. *
2 Plan of Conversion
3.1 Certificate of Incorporation of CBES Bancorp, Inc.
3.2 Bylaws of CBES Bancorp, Inc.
3.3 Charter of Community Bank of Excelsior Springs, A Savings Bank
3.4 Bylaws of Community Bank of Excelsior Springs, A Savings Bank
4 Form of Common Stock Certificate of CBES Bancorp, Inc.
5 Opinion of Luse Lehman Gorman Pomerenk & Schick regarding legality of
securities being registered
8.1 Federal Tax Opinion of Luse Lehman Gorman Pomerenk & Schick
8.2 State Tax Opinion of KPMG Peat Marwick LLP*
8.3 Opinion of RP Financial LC. with respect to Subscription Rights
10.1 Proposed Stock Option and Incentive Plan
10.2 Proposed Recognition and Retention Plan
10.3 Form of Employment Agreement for Larry E. Hermreck, Deryl R. Goettling,
Margaret E. Teegarden and Dennis D. Hartman
10.4 Employee Stock Ownership Plan
10.5 Director Emeritus Agreements
10.6 Salary Continuation Agreement with Officer
21 Subsidiaries
23.1 Consent of Luse Lehman Gorman Pomerenk & Schick (contained in Opinions
included on Exhibits 5 and 8.1)
<PAGE>
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of RP Financial, LC
24 Power of Attorney (set forth on signature page)
27.1 EDGAR Financial Data Schedule
99.1 Appraisal Agreement between Community Bank of Excelsior Springs, A
Savings Bank and RP Financial, LC
99.2 Appraisal Report of RP Financial, LC
99.3 Proxy Statement
99.4 Marketing Materials
99.5 Order and Acknowledgment Form
________________________________
* To be filed supplementally or by amendment.
<PAGE>
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) File, during any period in which it offers or sells securities,
a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
duration from the low or high and of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
The small business issuer will provide to the underwriter at the
closing specified in the Underwriting Agreement certificates in such
documentation and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer or
controlling person of the small business issuer in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the small business
issuer will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
questions whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Excelsior Springs, Missouri on June
21, 1996.
CBES BANCORP, INC.
By: /s/ Larry E. Hermreck
-----------------------------------
Larry E. Hermreck
Chief Executive Officer
(Duly Authorized Representative)
POWER OF ATTORNEY
We, the undersigned directors and officers of CBES Bancorp, Inc. (the
"Company") hereby severally constitute and appoint Larry E. Hermreck as our true
and lawful attorney and agent, to do any and all things in our names in the
capacities indicated below which said Larry E. Hermreck may deem necessary or
advisable to enable the Company to comply with the Securities Act of 1933, and
any rules, regulations and requirements of the Securities and Exchange
Commission, in connection with the registration statement on Form S-1 or Form
SB-2 relating to the offering of the Company's Common Stock, including
specifically, but not limited to, power and authority to sign for us in our
names in the capacities indicated below the registration statement and any and
all amendments (including post-effective amendments) thereto; and we hereby
approve, ratify and confirm all that said Larry E. Hermreck shall do or cause to
be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and as of the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Larry E. Hermreck Chief Executive Officer June 21, 1996
- --------------------------- (Principal Executive Officer)
Larry E. Hermreck
/s/ Dennis Hartman Controller (Principal June 21, 1996
- --------------------------- Accounting
Dennis Hartman and Financial Officer)
/s/ Richard Cox Director June 21, 1996
- ---------------------------
Richard Cox
/s/ Robert R. Lalumondier Director June 21, 1996
- ---------------------------
Robert R. Lalumondier
___________________________ Director ___________________
Cecil E. Lamb
/s/ Robert McCrorey Director June 21, 1996
- ---------------------------
Robert McCrorey
/s/ Edgar Radley Director June 21, 1996
- ---------------------------
Edgar Radley
/s/ Rodney Rounkles Director June 21, 1996
- ---------------------------
Rodney Rounkles
</TABLE>
<PAGE>
EXHIBIT INDEX
1.1 Engagement Letter between Community Bank of Excelsior Springs, A Savings
Bank and Trident Securities, Inc.
1.2 Form of Agency Agreement among CBES Bancorp, Inc., Community Bank of
Excelsior Springs, A Savings Bank and Trident Securities, Inc. *
2 Plan of Conversion
3.1 Certificate of Incorporation of CBES Bancorp, Inc.
3.2 Bylaws of CBES Bancorp, Inc.
3.3 Charter of Community Bank of Excelsior Springs, A Savings Bank
3.4 Bylaws of Community Bank of Excelsior Springs, A Savings Bank
4 Form of Common Stock Certificate of CBES Bancorp, Inc.
5 Opinion of Luse Lehman Gorman Pomerenk & Schick regarding legality of
securities being registered
8.1 Federal Tax Opinion of Luse Lehman Gorman Pomerenk & Schick
8.2 State Tax Opinion of KPMG Peat Marwick LLP*
8.3 Opinion of RP Financial, LC. with respect to Subscription Rights
10.1 Proposed Stock Option and Incentive Plan
10.2 Proposed Recognition and Retention Plan
10.3 Form of Employment Agreement for Larry E. Hermreck, Deryl R. Goettling,
Margaret E. Teegarden and Dennis D. Hartman
10.4 Employee Stock Ownership Plan
10.5 Director Emeritus Agreements
10.6 Salary Continuation Agreement with Officer
21 Subsidiaries
23.1 Consent of Luse Lehman Gorman Pomerenk & Schick (contained in Opinions
included on Exhibits 5 and 8.1)
23.2 Consent of KPMG Peat Marwick, L.L.P.
23.3 Consent of RP Financial, LC.
27.1 EDGAR Financial Data Schedule
24 Power of Attorney (set forth on signature page)
<PAGE>
99.1 Appraisal Agreement between Community Bank of Excelsior Springs, A
Savings Bank and RP Financial, LC.
99.2 Appraisal Report of RP Financial, LC.
99.3 Proxy Statement
99.4 Marketing Materials
99.5 Order and Acknowledgment Form
_______________________________
* To be filed supplementally or by amendment.
<PAGE>
Exhibit 1.1
June 20, 1996
Board of Directors
Community Bank of Excelsior Springs, A Savings Bank
1001 North Jesse James Road
Excelsior Springs, Missouri 64024
RE: Conversion Stock Marketing Services
Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc. ("Trident") and Community Bank of Excelsior Springs, A Savings
Bank, Excelsior Springs, Missouri (the "Bank") concerning our investment banking
services in connection with the conversion of the Bank from a mutual to a
capital stock form of organization.
Trident is prepared to assist the Bank in connection with the offering of its
shares of common stock during the subscription offering and community offering
as such terms are defined in the Bank's Plan of Conversion. The specific terms
of the services contemplated hereunder shall be set forth in a definitive sales
agency agreement (the "Agreement") between Trident and the Bank to be executed
on the date the offering circular/prospectus is declared effective by the
appropriate regulatory authorities. The price of the shares during the
subscription offering and community offering will be the price established by
the Bank's Board of Directors, based upon an independent appraisal as approved
by the appropriate regulatory authorities, provided such price is mutually
acceptable to Trident and the Bank.
In connection with the subscription offering and community offering, Trident
will act as financial advisor and exercise its best efforts to assist the Bank
in the sale of its common stock during the subscription offering and community
offering. Additionally, Trident may enter into agreements with other National
Association of Securities Dealers, Inc., ("NASD") member firms to act as
selected dealers, assisting in the sale of the common stock. Trident and the
Bank will determine the selected dealers to assist the Bank during the community
offering. At the appropriate time, Trident in conjunction with its counsel,
will conduct an examination of the relevant documents and records of the Bank as
Trident deems necessary and appropriate. The Bank will make all documents,
records and other information deemed necessary by Trident or its counsel
available to them upon request.
For its services hereunder, Trident will receive the following compensation and
reimbursement from the Bank:
1. A management fee in the amount of one hundred fifty thousand dollars
($150,000).
<PAGE>
Board of Directors
June 20, 1996
Page 2
2. For stock sold by other NASD member firms under selected dealer's
agreements, the commission shall not exceed a fee to be agreed upon
jointly by Trident and the Bank to reflect market requirements at the
time of the stock allocation in a Syndicated Community Offering.
3. The foregoing fees and commissions are to be payable to Trident at
closing as defined in the Agreement to be entered into between the
Bank and Trident.
4. Trident shall be reimbursed for allocable expenses incurred by them,
including legal fees, whether or not the Agreement is consummated.
Trident's out-of-pocket expenses will not exceed $10,000 and its legal
fees will not exceed $25,000. The Bank will forward to Trident a
check in the amount of $10,000 as an advance payment to defray the
allocable expenses of Trident.
It further is understood that the Bank will pay all other expenses of the
conversion including but not limited to its attorneys' fees, NASD filing fees,
and filing and registration fees and fees of either Trident's attorneys or the
attorneys relating to any required state securities law filings, telephone
charges, air freight, rental equipment, supplies, transfer agent charges, fees
relating to auditing and accounting and costs of printing all documents
necessary in connection with the foregoing.
For purposes of Trident's obligation to file certain documents and to make
certain representations to the NASD in connection with the conversion, the Bank
warrants that: (a) the Bank has not privately placed any securities within the
last 18 months; (b) there have been no material dealings within the last 12
months between the Bank and any NASD member or any person related to or
associated with any such member; (c) none of the officers or directors of the
Bank has any affiliation with the NASD; (d) except as contemplated by this
engagement letter with Trident, the Bank has no financial or management
consulting contracts outstanding with any other person; (e) the Bank has not
granted Trident a right of first refusal with respect to the underwriting of any
future offering of the Bank stock; and (f) there has been no intermediary
between Trident and the Bank in connection with the public offering of the
Bank's shares, and no person is being compensated in any manner for providing
such service.
The Bank agrees to indemnify and hold harmless Trident and each person, if any,
who controls the firm against all losses, claims, damages or liabilities, joint
or several and all legal or other expenses reasonably incurred by them in
connection with the investigation or defense thereof (collectively, "Losses"),
to which they may become subject under the securities laws or under the common
law, that arise out of or are based upon the conversion or the engagement
hereunder of Trident unless it is determined by final judgment of a court having
jurisdiction over the matter that such Losses are primarily a result of
Trident's willful misconduct or gross negligence. If the foregoing
indemnification is unavailable for any reason, the Bank agrees to contribute to
such Losses in the proportion that its financial interest in the conversion
bears to that of the indemnified parties. If the Agreement is entered into with
respect to the common stock to be issued in the
<PAGE>
Board of Directors
June 20, 1996
Page 3
conversion, the Agreement will provide for indemnification, which will be in
addition to any rights that Trident or any other indemnified party may have at
common law or otherwise. The indemnification provision of this paragraph will be
superseded by the indemnification provisions of the Agreement entered into by
the Bank and Trident.
This letter is merely a statement of intent and is not a binding legal agreement
except as to paragraph (4) above with regard to the obligation to reimburse
Trident for allocable expenses to be incurred prior to the execution of the
Agreement and the indemnity described in the preceding paragraph. While Trident
and the Bank agree in principle to the contents hereof and propose to proceed
promptly, and in good faith, to work out the arrangements with respect to the
proposed offering, any legal obligations between Trident and the Bank shall be
only as set forth in a duly executed Agreement. Such Agreement shall be in form
and content satisfactory to Trident and the Bank, as well as their counsel, and
Trident's obligations thereunder shall be subject to, among other things, there
being in Trident's opinion no material adverse change in the condition or
obligations of the Bank or no market conditions which might render the sale of
the shares by the Bank hereby contemplated inadvisable.
Please acknowledge your agreement to the foregoing by signing below and
returning to Trident one copy of this letter along with the advance payment of
$10,000. This proposal is open for your acceptance for a period of thirty (30)
days from the date hereof.
Yours very truly,
TRIDENT SECURITIES, INC.
By: ___________________
Timothy E. Lavelle
President
Agreed and accepted to this ______ day
of ________________, 1996
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
By: _______________
Larry E. Hermreck
Chief Executive Officer
TEL/cs
<PAGE>
Exhibit 2
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
Excelsior Springs, Missouri
PLAN OF CONVERSION
From Mutual to Stock Form of Organization
I. GENERAL
-------
On May 14, 1996, the Board of Directors of Community Bank of Excelsior
Springs, a Savings Bank (the "Bank") adopted a Plan of Conversion whereby the
Bank would convert from a federal mutual savings institution to a federal stock
savings institution pursuant to the Rules and Regulations of the OTS. The Plan
includes, as part of the conversion, the concurrent formation of a holding
company. The new holding company is proposed to be chartered as a Delaware
corporation under the name "CBES Bancorp, Inc." The Plan provides that non-
transferable subscription rights to purchase Holding Company Conversion Stock
will be offered first to Eligible Account Holders of record as of the
Eligibility Record Date, then to the Bank's Tax-Qualified Employee Plans, then
to Supplemental Eligible Account Holders of record as of the Supplemental
Eligibility Record Date, then to Other Members, and then to directors, officers
and employees. Concurrently with, at any time during, or promptly after the
Subscription Offering, and on a lowest priority basis, an opportunity to
subscribe may also be offered to the general public in a Direct Community
Offering. The price of the Holding Company Conversion Stock will be based upon
an independent appraisal of the Bank and will reflect its estimated pro forma
market value, as converted. It is the desire of the Board of Directors of the
Bank to attract new capital to the Bank in order to increase its capital,
support future savings growth and increase the amount of funds available for
residential and other mortgage lending. The Converted Bank is also expected to
benefit from its management and other personnel having a stock ownership in its
business, since stock ownership is viewed as an effective performance incentive
and a means of attracting, retaining and compensating management and other
personnel. No change will be made in the Board of Directors or management as a
result of the Conversion.
II. DEFINITIONS
-----------
Acting in Concert: The term "acting in concert" shall have the same
-----------------
meaning given it in (S)574.2(c) of the Rules and Regulations of the OTS.
Actual Subscription Price: The price per share, determined as provided
-------------------------
in Section V of the Plan, at which Holding Company Conversion Stock will be sold
in the Subscription Offering.
Affiliate: An "affiliate" of, or a Person "affiliated" with, a Specified
---------
Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.
A-1
<PAGE>
Associate: The term "associate," when used to indicate a relationship
---------
with any Person, means (i) any corporation or organization (other than the
Holding Company, the Bank or a majority-owned subsidiary of the Holding Company)
of which such Person is an officer or partner or is, directly or indirectly, the
beneficial owner of ten percent or more of any class of equity securities, (ii)
any trust or other estate in which such Person has a substantial beneficial
interest or as to which such Person serves as trustee or in a similar fiduciary
capacity, and (iii) any relative or spouse of such Person, or any relative of
such spouse, who has the same home as such Person or who is a director or
officer of the Holding Company or the Bank or any subsidiary of the Holding
Company; provided, however, that any Tax-Qualified or Non-Tax-Qualified Employee
Plan shall not be deemed to be an associate of any director or officer of the
Holding Company or the Bank, to the extent provided in Section V hereof.
Bank: Community Bank of Excelsior Springs, a Savings Bank, or such other
----
name as the institution may adopt.
Conversion: Change of the Bank's charter and bylaws to federal stock
----------
charter and bylaws; sale by the Holding Company of Holding Company Conversion
Stock; and issuance and sale by the Converted Bank of Converted Bank Common
Stock to the Holding Company, all as provided for in the Plan.
Converted Bank: The federally chartered stock savings institution
--------------
resulting from the Conversion of the Bank in accordance with the Plan.
Deposit Account: Any withdrawable account or deposit in excess of $50 in
---------------
the Bank.
Direct Community Offering: The offering to the general public of any
-------------------------
unsubscribed shares which may be effected as provided in Section V hereof.
Eligibility Record Date: The close of business on March 31, 1995.
-----------------------
Eligible Account Holder: Any Person holding a Qualifying Deposit in the
-----------------------
Bank on the Eligibility Record Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
------------
Holding Company: CBES Bancorp, Inc., a Delaware corporation, which upon
---------------
completion of the Conversion will own all of the outstanding common stock of the
Converted Bank.
Holding Company Conversion Stock: Shares of common stock, par value $.01
--------------------------------
per share, to be issued and sold by the Holding Company as a part of the
Conversion; provided, however, that for purposes of calculating Subscription
Rights and maximum purchase limitations under the Plan, references to the number
of shares of Holding Company Conversion Stock shall refer to the number of
shares offered in the Subscription Offering.
A-2
<PAGE>
Market Maker: A dealer (i.e., any Person who engages directly or
------------
indirectly as agent, broker or principal in the business of offering, buying,
selling, or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide,
competitive bid and offer quotations in a recognized inter-dealer quotation
system; or (ii) furnishes bona fide competitive bid and offer quotations on
request; and (iii) is ready, willing, and able to effect transactions in
reasonable quantities at his quoted prices with other brokers or dealers.
Maximum Subscription Price: The price per share of Holding Company
--------------------------
Conversion Stock to be paid initially by subscribers in the Subscription
Offering.
Member: Any Person or entity that qualifies as a member of the Bank
------
pursuant to its charter and bylaws.
Non-Tax-Qualified Employee Plan: Any defined benefit plan or defined
-------------------------------
contribution plan of the Bank or the Holding Company, such as an employee stock
ownership plan, stock bonus plan, profit-sharing plan or other plan, which with
its related trust does not meet the requirements to be "qualified" under Section
401 of the Internal Revenue Code.
OTS: Office of Thrift Supervision, Department of the Treasury.
---
Officer: An executive officer of the Holding Company or the Bank,
-------
including the Chairman of the Board, President, Executive Vice Presidents,
Senior Vice Presidents in charge of principal business functions, Secretary and
Treasurer.
Order Forms: Forms to be used in the Subscription Offering and in the
-----------
Direct Community Offering to exercise Subscription Rights.
Other Members: Members of the Bank, other than Eligible Account Holders,
-------------
Tax-Qualified Employee Plans or Supplemental Eligible Account Holders, as of the
Voting Record Date.
Person: An individual, a corporation, a partnership, an Bank, a joint-
------
stock company, a trust, any unincorporated organization, or a government or
political subdivision thereof.
Plan: This Plan of Conversion of the Bank, including any amendment
----
approved as provided in this Plan.
Public Offering: The offering for sale by the Underwriters to the
---------------
general public of any shares of Holding Company Conversion Stock not subscribed
for in the Subscription Offering or the Direct Community Offering.
Public Offering Price: The price per share at which any unsubscribed
---------------------
shares of Holding Company Conversion Stock are initially offered for sale in the
Public Offering.
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<PAGE>
Qualifying Deposit: The aggregate balance of each Deposit Account of an
------------------
Eligible Account Holder as of the Eligibility Record Date or of a Supplemental
Eligible Account Holder as of the Supplemental Eligibility Record Date.
SAIF: Savings Association Insurance Fund.
----
SEC: Securities and Exchange Commission.
---
Special Meeting: The Special Meeting of Members called for the purpose
---------------
of considering and voting upon the Plan of Conversion.
Subscription Offering: The offering of shares of Holding Company
---------------------
Conversion Stock for subscription and purchase pursuant to Section V of the
Plan.
Subscription Rights: Non-transferable, non-negotiable, personal rights
-------------------
of the Bank's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members, and directors, Officers
and employees, or trusts of any such persons including individual retirement
accounts and Keogh accounts, to subscribe for shares of Holding Company
Conversion Stock in the Subscription Offering.
Supplemental Eligibility Record Date: The last day of the calendar
------------------------------------
quarter preceding approval of the Plan by the OTS.
Supplemental Eligible Account Holder: Any person holding a Qualifying
------------------------------------
Deposit in the Bank (other than an officer or director and their associates) on
the Supplemental Eligibility Record Date.
Tax-Qualified Employee Plans: Any defined benefit plan or defined
----------------------------
contribution plan of the Bank or the Holding Company, such as an employee stock
ownership plan, stock bonus plan, profit-sharing plan or other plan, which with
its related trust meets the requirements to be "qualified" under Section 401 of
the Internal Revenue Code.
Underwriters: The investment Banking firm or firms agreeing to purchase
------------
Holding Company Conversion Stock in order to offer and sell such Holding Company
Conversion Stock in the Public Offering.
Voting Record Date: The date set by the Board of Directors in accordance
------------------
with federal regulations for determining Members eligible to vote at the Special
Meeting.
III. STEPS PRIOR TO SUBMISSION OF PLAN OF CONVERSION TO THE MEMBERS
--------------------------------------------------------------
FOR APPROVAL
------------
Prior to submission of the Plan of Conversion to its Members for
approval, the Bank must receive from the OTS approval of the Application for
Approval of Conversion to convert to the
A-4
<PAGE>
federal stock form of organization. The following steps must be taken prior to
such regulatory approval:
A. The Board of Directors shall adopt the Plan by not less than a
two-thirds vote.
B. The Bank shall notify its Members of the adoption of the Plan by
publishing a statement in a newspaper having a general circulation in
each community in which the Bank maintains an office.
C. Copies of the Plan adopted by the Board of Directors shall be
made available for inspection at each office of the Bank.
D. The Bank will promptly cause an Application for Approval of
Conversion on Form AC to be prepared and filed with the OTS, an
Application on Form H-(e)1 (or other applicable form) to be prepared and
filed with the OTS and a Registration Statement on Form S-1 to be
prepared and filed with the SEC.
E. Upon receipt of notice from the OTS to do so, the Bank shall
notify its Members that it has filed the Application for Approval of
Conversion by posting notice in each of its offices and by publishing
notice in a newspaper having general circulation in each community in
which the Bank maintains an office.
IV. CONVERSION PROCEDURE
--------------------
Following approval of the application by the OTS, the Plan will be
submitted to a vote of the Members at the Special Meeting. If the Plan is
approved by Members holding a majority of the total number of votes entitled to
be cast at the Special Meeting, the Bank will take all other necessary steps
pursuant to applicable laws and regulations to convert to a federal stock
savings institution as part of a concurrent holding company formation pursuant
to the terms of the Plan.
The Holding Company Conversion Stock will be offered for sale in the
Subscription Offering at the Maximum Subscription Price to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members and directors, Officers and employees of the Bank, prior to or
within 45 days after the date of the Special Meeting. The Bank may, either
concurrently with, at any time during, or promptly after the Subscription
Offering, also offer the Holding Company Conversion Stock to and accept
subscriptions from other Persons in a Direct Community Offering; provided that
the Bank's Eligible Account Holders, Tax-Qualified Employee Plans, Supplemental
Eligible Account Holders, Other Members and directors, Officers and employees
shall have the priority rights to subscribe for Holding Company Conversion Stock
set forth in Section V of this Plan. However, the Holding Company and the Bank
may delay commencing the Subscription Offering beyond such 45 day period in the
event there exist unforeseen material adverse market or financial conditions.
If the Subscription Offering commences prior to the Special Meeting,
subscriptions will be accepted subject to the approval of the Plan at the
Special Meeting.
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<PAGE>
The period for the Subscription Offering will be not less than 20 days
nor more than 45 days and the period for the Direct Community Offering will be
not more than 45 days, unless extended by the Bank. Upon completion of the
Subscription Offering and the Direct Community Offering, if any, any
unsubscribed shares of Holding Company Conversion Stock will, if feasible, be
sold to the Underwriters for resale to the general public in the Public
Offering. If for any reason the Public Offering of all shares not sold in the
Subscription Offering and Direct Community Offering cannot be effected, the
Holding Company and the Bank will use their best efforts to obtain other
purchasers, subject to OTS approval. Completion of the sale of all shares of
Holding Company Conversion Stock not sold in the Subscription Offering and
Direct Community Offering is required within 45 days after termination of the
Subscription Offering, subject to extension of such 45 day period by the Holding
Company and the Bank with the approval of the OTS. The Holding Company and the
Bank may jointly seek one or more extensions of such 45 day period if necessary
to complete the sale of all shares of Holding Company Conversion Stock. In
connection with such extensions, subscribers and other purchasers will be
permitted to increase, decrease or rescind their subscriptions or purchase
orders to the extent required by the OTS in approving the extensions. Completion
of the sale of all shares of Holding Company Conversion Stock is required within
24 months after the date of the Special Meeting.
V. STOCK OFFERING
--------------
A. Total Number of Shares and Purchase Price of Conversion Stock
-------------------------------------------------------------
The total number of shares of Holding Company Conversion Stock to be
issued and sold in the Conversion will be determined jointly by the Boards of
Directors of the Holding Company and the Bank prior to the commencement of the
Subscription Offering, subject to adjustment if necessitated by market or
financial conditions prior to consummation of the Conversion. The total number
of shares of Holding Company Conversion Stock shall also be subject to increase
in connection with any oversubscriptions in the Subscription Offering or Direct
Community Offering.
The aggregate price for which all shares of Holding Company Conversion
Stock will be sold will be based on an independent appraisal of the estimated
total pro forma market value of the Holding Company and the Converted Bank.
Such appraisal shall be performed in accordance with OTS guidelines and will be
updated as appropriate under or required by applicable regulations.
The appraisal will be made by an independent investment banking or
financial consulting firm experienced in the area of thrift institution
appraisals. The appraisal will include, among other things, an analysis of the
historical and pro forma operating results and net worth of the Converted Bank
and a comparison of the Holding Company, the Converted Bank and the Conversion
Stock with comparable thrift institutions and holding companies and their
respective outstanding capital stocks.
A-6
<PAGE>
Based upon the independent appraisal, the Boards of Directors of the
Holding Company and the Bank will jointly fix the Maximum Subscription Price.
If, following completion of the Subscription Offering and Direct
Community Offering, a Public Offering is effected, the Actual Subscription Price
for each share of Holding Company Conversion Stock will be the same as the
Public Offering Price at which unsubscribed shares of Holding Company Conversion
Stock are initially offered for sale by the Underwriters in the Public Offering.
The Public Offering Price will be a price negotiated by the Holding Company and
the Bank with the Underwriters, not in excess of the Maximum Subscription Price.
The price paid by the Underwriters for each unsubscribed share will be the
Public Offering Price less a negotiated underwriting discount.
If, upon completion of the Subscription Offering and Direct Community
Offering, all of the Holding Company Conversion Stock is subscribed for or only
a limited number of shares remain unsubscribed for, or if a Public Offering
otherwise cannot be effected, the Actual Subscription Price for each share of
Holding Company Conversion Stock will be determined by dividing the estimated
appraised aggregate pro forma market value of the Holding Company and the
Converted Bank, based on the independent appraisal as updated upon completion of
the Subscription Offering or other sale of all of the Holding Company Conversion
Stock, by the total number of shares of Holding Company Conversion Stock to be
issued and sold by the Holding Company upon Conversion. Such appraisal will then
be expressed in terms of a specific aggregate dollar amount rather than as a
range.
B. Subscription Rights
-------------------
Non-transferable Subscription Rights to purchase shares will be issued
without payment therefor to Eligible Account Holders, Tax-Qualified Employee
Plans, Supplemental Eligible Account Holders, Other Members and directors,
Officers and employees of the Bank as set forth below.
1. Preference Category No. 1: Eligible Account Holders
-------------------------------------------- -------
Each Eligible Account Holder shall receive non-transferable
Subscription Rights to subscribe for shares of Holding Company Conversion
Stock in an amount equal to the greater of $100,000, one-tenth of one
percent (.10%) of the total offering of shares, or 15 times the product
(rounded down to the next whole number) obtained by multiplying the total
number of shares of common stock to be issued by a fraction of which the
numerator is the amount of the qualifying deposit of the Eligible Account
Holder and the denominator is the total amount of qualifying deposits of
all Eligible Account Holders in the converting Bank in each case on the
Eligibility Record Date. If sufficient shares are not available, shares
shall be allocated first to permit each subscribing Eligible Account
Holder to purchase to the extent possible 100 shares, and thereafter
among each subscribing Eligible Account Holder pro rata in the same
proportion that his Qualifying Deposit bears to the total Qualifying
Deposits of all subscribing Eligible Account Holders whose subscriptions
remain unsatisfied.
A-7
<PAGE>
Non-transferable Subscription Rights to purchase Holding Company
Conversion Stock received by directors and Officers of the Bank and their
Associates, based on their increased deposits in the Bank in the one year
period preceding the Eligibility Record Date, shall be subordinated to
all other subscriptions involving the exercise of non-transferable
Subscription Rights of Eligible Account Holders.
2. Preference Category No. 2: Tax-Qualified Employee Plans
--------------------------------------------------------
Each Tax-Qualified Employee Plan shall be entitled to receive non-
transferable Subscription Rights to purchase up to 10% of the shares of
Holding Company Conversion Stock, provided that singly or in the
aggregate such plans (other than that portion of such plans which is
self-directed) shall not purchase more than 10% of the shares of the
Holding Company Conversion Stock. Subscription Rights received pursuant
to this Category shall be subordinated to all rights received by Eligible
Account Holders to purchase shares pursuant to Category No. 1; provided,
however, that notwithstanding any other provision of this Plan to the
contrary, the Tax-Qualified Employee Plans shall have a first priority
Subscription Right to the extent that the total number of shares of
Holding Company Conversion Stock sold in the Conversion exceeds the
maximum of the appraisal range as set forth in the subscription
prospectus.
3. Preference Category No. 3: Supplemental Eligible Account
---------------------------------------------------------
Holders
-------
Each Supplemental Eligible Account Holder shall receive non-
transferable Subscription Rights to subscribe for shares of Holding
Company Conversion Stock in an amount equal to the greater of $100,000,
one-tenth of one percent (.10%) of the total offering of shares, or 15
times the product (rounded down to the next whole number) obtained by
multiplying the total number of shares of common stock to be issued by a
fraction of which the numerator is the amount of the qualifying deposit
of the Supplemental Eligible Account Holder and the denominator is the
total amount of qualifying deposits of all Supplemental Eligible Account
Holders in the converting Bank in each case on the Supplemental
Eligibility Record Date.
Subscription Rights received pursuant to this category shall be
subordinated to all Subscription Rights received by Eligible Account
Holders and Tax-Qualified Employee Plans pursuant to Category Nos. 1 and
2 above.
Any non-transferable Subscription Rights to purchase shares received
by an Eligible Account Holder in accordance with Category No. 1 shall
reduce to the extent thereof the Subscription Rights to be distributed to
such person pursuant to this Category.
In the event of an oversubscription for shares under the provisions
of this subparagraph, the shares available shall be allocated first to
permit each subscribing Supplemental Eligible Account Holder, to the
extent possible, to purchase a number of shares sufficient to make his
total allocation (including the number of shares, if any, allocated in
accordance with Category No. 1) equal to 100 shares, and thereafter among
A-8
<PAGE>
each subscribing Supplemental Eligible Account Holder pro rata in the
same proportion that his Qualifying Deposit bears to the total Qualifying
Deposits of all subscribing Supplemental Eligible Account Holders whose
subscriptions remain unsatisfied.
4. Preference Category No. 4: Other Members
-----------------------------------------
Each Other Member shall receive non-transferable Subscription Rights
to subscribe for shares of Holding Company Conversion Stock remaining
after satisfying the subscriptions provided for under Category Nos. 1
through 3 above, subject to the following conditions:
a. Each Other Member shall be entitled to subscribe for an
amount of shares equal to the greater of $100,000 or one-tenth of one
percent (.10%) of the total offering of shares of common stock in the
Conversion, to the extent that Holding Company Conversion Stock is
available.
b. In the event of an oversubscription for shares under the
provisions of this subparagraph, the shares available shall be
allocated among the subscribing Other Members pro rata in the same
proportion that his number of votes on the Voting Record Date bears
to the total number of votes on the Voting Record Date of all
subscribing Other Members on such date. Such number of votes shall be
determined based on the Bank's mutual charter and bylaws in effect on
the date of approval by members of this Plan of Conversion.
5. Preference Category No. 5: Directors, Officers and Employees
-------------------------------------------------------------
Each director, Officer and employee of the Bank as of the date of the
commencement of the Subscription Offering shall be entitled to receive
non-transferable Subscription Rights to purchase shares of the Holding
Company Conversion Stock to the extent that shares are available after
satisfying subscriptions under Category Nos. 1 through 4 above. The
shares which may be purchased under this Category are subject to the
following conditions:
a. The total number of shares which may be purchased under this
Category may not exceed 25% of the number of shares of Holding
Company Conversion Stock.
b. The maximum amount of shares which may be purchased under
this Category by any Person is $100,000 of Holding Company Conversion
Stock. In the event of an oversubscription for shares under the
provisions of this subparagraph, the shares available shall be
allocated pro rata among all subscribers in this Category.
A-9
<PAGE>
C. Public Offering and Direct Community Offering
---------------------------------------------
1. Any shares of Holding Company Conversion Stock not subscribed for
in the Subscription Offering may be offered for sale in a Direct
Community Offering. This will involve an offering of all unsubscribed
shares directly to the general public with a preference to those natural
persons residing in the counties in which the Bank maintains its offices.
The Direct Community Offering, if any, shall be for a period of not more
than 45 days unless extended by the Holding Company and the Bank, and
shall commence concurrently with, during or promptly after the
Subscription Offering. The purchase price per share to the general public
in a Direct Community Offering shall be the same as the Actual
Subscription Price. The Holding Company and the Bank may use an
investment banking firm or firms on a best efforts basis to sell the
unsubscribed shares in the Subscription and Direct Community Offering.
The Holding Company and the Bank may pay a commission or other fee to
such investment banking firm or firms as to the shares sold by such firm
or firms in the Subscription and Direct Community Offering and may also
reimburse such firm or firms for expenses incurred in connection with the
sale. The Direct Community Offering may include a syndicated community
offering managed by such investment banking firm or firms. The Holding
Company Conversion Stock will be offered and sold in the Direct Community
Offering, in accordance with OTS regulations, so as to achieve the widest
distribution of the Holding Company Conversion Stock. No person, by
himself or herself, or with an Associate or group of Persons acting in
concert, may subscribe for or purchase more than $100,000 of Holding
Company Conversion Stock offered in the Direct Community Offering.
Further, the Bank may limit total subscriptions under this Section V.C.1
so as to assure that the number of shares available for the Public
Offering may be up to a specified percentage of the number of shares of
Holding Company Conversion Stock. Finally, the Bank may reserve shares
offered in the Community Offering for sales to institutional investors.
In the event of an oversubscription for shares in the Community
Offering, shares may be allocated (to the extent shares remain available)
first to cover any reservation of shares for a public offering or
institutional orders, next to cover orders of natural persons residing in
the counties in which the Bank maintains its offices, then to cover the
orders of any other person subscribing for shares in the Community
Offering so that each such person may receive 1,000 shares, and
thereafter, on a pro rata basis to such persons based on the amount of
their respective subscriptions.
The Bank and the Holding Company, in their sole discretion, may
reject subscriptions, in whole or in part, received from any Person under
this Section V.C.
2. Any shares of Holding Company Conversion Stock not sold in the
Subscription Offering or in the Direct Community Offering, if any, shall
then be sold to the Underwriters for resale to the general public at the
Public Offering Price in the Public Offering. It is expected that the
Public Offering will commence as soon as practicable after termination of
the Subscription Offering and the Direct Community Offering, if any. The
Public Offering shall be completed within 45 days after the termination
of the
A-10
<PAGE>
Subscription Offering, unless such period is extended as provided in
Section IV hereof. The Public Offering Price and the underwriting
discount shall be determined as provided in Section V.A hereof and set
forth in the underwriting agreement between the Holding Company, the Bank
and the Underwriters. Such underwriting agreement shall be filed with the
OTS and the SEC.
3. If for any reason a Public Offering of unsubscribed shares of
Holding Company Conversion Stock cannot be effected and any shares remain
unsold after the Subscription Offering and the Direct Community Offering,
if any, the Boards of Directors of the Holding Company and the Bank will
seek to make other arrangements for the sale of the remaining shares.
Such other arrangements will be subject to the approval of the OTS and to
compliance with applicable securities laws.
D. Additional Limitations Upon Purchases of Shares of Holding Company
------------------------------------------------------------------
Conversion Stock
----------------
The following additional limitations shall be imposed on all purchases of
Holding Company Conversion Stock in the Conversion:
1. No Person, by himself or herself, or with an Associate or group
of Persons acting in concert, may subscribe for or purchase in the
Conversion a number of shares of Holding Company Conversion Stock which
exceeds $200,000 of the Holding Company Conversion Stock offered in the
Conversion. For purposes of this paragraph, an Associate of a Person does
not include a Tax-Qualified or Non-Tax Qualified Employee Plan in which
the person has a substantial beneficial interest or serves as a trustee
or in a similar fiduciary capacity. Moreover, for purposes of this
paragraph, shares held by one or more Tax-Qualified or Non-Tax Qualified
Employee Plans attributed to a Person shall not be aggregated with shares
purchased directly by or otherwise attributable to that Person.
2. Directors and Officers and their Associates may not purchase in
all categories in the Conversion an aggregate of more than 34% of the
Holding Company Conversion Stock. For purposes of this paragraph, an
Associate of a Person does not include any Tax-Qualified Employee Plan.
Moreover, any shares attributable to the Officers and directors and their
Associates, but held by one or more Tax-Qualified Employee Plans shall
not be included in calculating the number of shares which may be
purchased under the limitation in this paragraph.
3. The minimum number of shares of Holding Company Conversion Stock
that may be purchased by any Person in the Conversion is 25 shares,
provided sufficient shares are available.
4. The Boards of Directors of the Holding Company and the Bank may,
in their sole discretion, increase the maximum purchase limitation
referred to in subparagraph 1. herein up to 9.99%, provided that orders
for shares exceeding 5% of the shares being offered in the Subscription
Offering shall not exceed, in the aggregate, 10% of the shares
A-11
<PAGE>
being offered in the Subscription Offering. Requests to purchase
additional shares of Holding Company Conversion Stock under this
provision will be allocated by the Boards of Directors on a pro rata
basis giving priority in accordance with the priority rights set forth in
this Section V.
Depending upon market and financial conditions, the Boards of Directors
of the Holding Company and the Bank, with the approval of the OTS and without
further approval of the Members, may increase or decrease any of the above
purchase limitations.
For purposes of this Section V, the directors of the Holding Company and
the Bank shall not be deemed to be Associates or a group acting in concert
solely as a result of their serving in such capacities.
Each Person purchasing Conversion Stock in the Conversion shall be deemed
to confirm that such purchase does not conflict with the above purchase
limitations.
E. Restrictions and Other Characteristics of Holding Company Conversion
--------------------------------------------------------------------
Stock Being Sold
----------------
1. Transferability. Holding Company Conversion Stock purchased by
---------------
Persons other than directors and Officers of the Holding Company or the
Bank will be transferable without restriction. Shares purchased by
directors or Officers shall not be sold or otherwise disposed of for
value for a period of one year from the date of Conversion, except for
any disposition of such shares (i) following the death of the original
purchaser, or (ii) resulting from an exchange of securities in a merger
or acquisition approved by the applicable regulatory authorities. Any
transfers that could result in a change of control of the Bank or the
Holding Company or result in the ownership by any Person or group acting
in concert of more than 10% of any class of the Bank's or the Holding
Company's equity securities are subject to the prior approval of the OTS.
The certificates representing shares of Holding Company Conversion
Stock issued to directors and Officers shall bear a legend giving
appropriate notice of the one year holding period restriction.
Appropriate instructions shall be given to the transfer agent for such
stock with respect to the applicable restrictions relating to the
transfer of restricted stock. Any shares of common stock of the Holding
Company subsequently issued as a stock dividend, stock split, or
otherwise, with respect to any such restricted stock, shall be subject to
the same holding period restrictions for Holding Company or Bank
directors and Officers as may be then applicable to such restricted
stock.
No director or Officer of the Holding Company or of the Bank, or
Associate of such a director or Officer, shall purchase any outstanding
shares of capital stock of the Holding Company for a period of three
years following the Conversion without the prior written approval of the
OTS, except through a broker or dealer registered with the SEC or in a
"negotiated transaction" involving more than one percent of the then-
outstanding shares of common stock of the Holding Company. As used
herein, the term "negotiated
A-12
<PAGE>
transaction" means a transaction in which the securities are offered and
the terms and arrangements relating to any sale are arrived at through
direct communications between the seller or any Person acting on its
behalf and the purchaser or his investment representative. The term
"investment representative" shall mean a professional investment advisor
acting as agent for the purchaser and independent of the seller and not
acting on behalf of the seller in connection with the transaction.
2. Repurchase and Dividend Rights. For a period of three years
------------------------------
following Conversion, the Converted Bank shall not repurchase any shares
of its capital stock, except in the case of an offer to repurchase on a
pro rata basis made to all holders of capital stock of the Converted
Bank. Any such offer shall be subject to the prior non-objection of the
OTS. A repurchase of qualifying shares of a director shall not be deemed
to be a repurchase for purposes of this Section V.E.2.
Present regulations also provide that the Converted Bank may not
declare or pay a cash dividend on or repurchase any of its stock (i) if
the result thereof would be to reduce the regulatory capital of the
Converted Bank below the amount required for the liquidation account to
be established pursuant to Section XII hereof, and (ii) except in
compliance with requirements of Section 563.134 of the Rules and
Regulations of the OTS.
The above limitations are subject to Section 563b.3 (g)(3) of the
Rules and Regulations of the OTS, which generally provides that the
Converted Bank may repurchase its capital stock provided (i) no
repurchases occur within one year following conversion, (ii) repurchases
during the second and third year after conversion are part of an open
market stock repurchase program that does not allow for a repurchase of
more than 5% of the Bank's outstanding capital stock during a twelve-
month period without OTS approval, (iii) the repurchases do not cause the
Bank to become undercapitalized, and (iv) the Bank provides notice to the
OTS at least 10 days prior to the commencement of a repurchase program
and the OTS does not object. In addition, the above limitations shall not
preclude payments of dividends or repurchases of capital stock by the
Converted Bank in the event applicable federal regulatory limitations are
liberalized subsequent to OTS approval of the Plan or as otherwise
permitted by the OTS.
3. Voting Rights. After Conversion, holders of deposit accounts
-------------
will not have voting rights in the Bank or the Holding Company. Exclusive
voting rights as to the Bank will be vested in the Holding Company, as
the sole stockholder of the Bank. Voting rights as to the Holding Company
will be held exclusively by its stockholders.
F. Exercise of Subscription Rights; Order Forms
--------------------------------------------
1. If the Subscription Offering occurs concurrently with the
solicitation of proxies for the Special Meeting, the subscription
prospectus and Order Form may be sent to each Eligible Account Holder,
Tax-Qualified Employee Plan, Supplemental Eligible Account Holder, Other
Member, and director, Officer and employee at their last known address
A-13
<PAGE>
as shown on the records of the Bank. However, the Bank may, and if the
Subscription Offering commences after the Special Meeting the Bank shall,
furnish a subscription prospectus and Order Form only to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account
Holders, Other Members, and directors, Officers and employees who have
returned to the Bank by a specified date prior to the commencement of the
Subscription Offering a post card or other written communication
requesting a subscription prospectus and Order Form. In such event, the
Bank shall provide a postage-paid post card for this purpose and make
appropriate disclosure in its proxy statement for the solicitation of
proxies to be voted at the Special Meeting and/or letter sent in lieu of
the proxy statement to those Eligible Account Holders, Tax-Qualified
Employee Plans or Supplemental Eligible Account Holders who are not
Members on the Voting Record Date.
2. Each Order Form will be preceded or accompanied by a
subscription prospectus describing the Holding Company and the Converted
Bank and the shares of Holding Company Conversion Stock being offered for
subscription and containing all other information required by the OTS or
the SEC or necessary to enable Persons to make informed investment
decisions regarding the purchase of Holding Company Conversion Stock.
3. The Order Forms (or accompanying instructions) used for the
Subscription Offering will contain, among other things, the following:
(i) A clear and intelligible explanation of the Subscription
Rights granted under the Plan to Eligible Account Holders, Tax-
Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members, and directors, Officers and employees;
(ii) A specified expiration date by which Order Forms must be
returned to and actually received by the Bank or its representative
for purposes of exercising Subscription Rights, which date will be
not less than 20 days after the Order Forms are mailed by the Bank;
(iii) The Maximum Subscription Price to be paid for each share
subscribed for when the Order Form is returned;
(iv) A statement that 25 shares is the minimum number of
shares of Holding Company Conversion Stock that may be subscribed for
under the Plan;
(v) A specifically designated blank space for indicating the
number of shares being subscribed for;
(vi) A set of detailed instructions as to how to complete the
Order Form including a statement as to the available alternative
methods of payment for the shares being subscribed for;
A-14
<PAGE>
(vii) Specifically designated blank spaces for dating and
signing the Order Form;
(viii) An acknowledgment that the subscriber has received the
subscription prospectus;
(ix) A statement of the consequences of failing to properly
complete and return the Order Form, including a statement that the
Subscription Rights will expire on the expiration date specified on
the Order Form unless such expiration date is extended by the Holding
Company and the Bank, and that the Subscription Rights may be
exercised only by delivering the Order Form, properly completed and
executed, to the Bank or its representative by the expiration date,
together with required payment of the Maximum Subscription Price for
all shares of Holding Company Conversion Stock subscribed for;
(x) A statement that the Subscription Rights are non-
transferable and that all shares of Holding Company Conversion Stock
subscribed for upon exercise of Subscription Rights must be purchased
on behalf of the Person exercising the Subscription Rights for his
own account; and
(xi) A statement that, after receipt by the Bank or its
representative, a Subscription may not be modified, withdrawn or
canceled without the consent of the Bank.
G. Method of Payment
-----------------
Payment for all shares of Holding Company Conversion Stock subscribed
for, computed on the basis of the Maximum Subscription Price, must accompany all
completed Order Forms. Payment may be made in cash (if presented in Person), by
check, or, if the subscriber has a Deposit Account in the Bank (including a
certificate of deposit), the subscriber may authorize the Bank to charge the
subscriber's account.
If a subscriber authorizes the Bank to charge his or her account, the
funds will continue to earn interest, but may not be used by the subscriber
until all Holding Company Conversion Stock has been sold or the Plan of
Conversion is terminated, whichever is earlier. The Bank will allow subscribers
to purchase shares by withdrawing funds from certificate accounts without the
assessment of early withdrawal penalties with the exception of prepaid interest
in the form of promotional gifts. In the case of early withdrawal of only a
portion of such account, the certificate evidencing such account shall be
canceled if the remaining balance of the account is less than the applicable
minimum balance requirement, in which event the remaining balance will earn
interest at the passbook rate. This waiver of the early withdrawal penalty is
applicable only to withdrawals made in connection with the purchase of Holding
Company Conversion Stock under the Plan of Conversion. Interest will also be
paid, at not less than the then-current passbook rate, on all orders paid in
cash, by check or money order, from the date payment is received until
A-15
<PAGE>
consummation of the Conversion. Payments made in cash, by check or money order
will be placed by the Bank in an escrow or other account established
specifically for this purpose.
In the event of an unfilled amount of any subscription order, the
Converted Bank will make an appropriate refund or cancel an appropriate portion
of the related withdrawal authorization, after consummation of the Conversion,
including any difference between the Maximum Subscription Price and the Actual
Subscription Price (unless subscribers are afforded the right to apply such
difference to the purchase of additional whole shares). If for any reason the
Conversion is not consummated, purchasers will have refunded to them all
payments made and all withdrawal authorizations will be canceled in the case of
subscription payments authorized from accounts at the Bank.
If any Tax-Qualified Employee Plans or Non-Tax-Qualified Employee Plans
subscribe for shares during the Subscription Offering, such plans will not be
required to pay for the shares subscribed for at the time they subscribe, but
may pay for such shares of Holding Company Conversion Stock subscribed for upon
consummation of the Conversion. In the event that, after the completion of the
Subscription Offering, the amount of shares to be issued is increased above the
maximum of the appraisal range included in the Prospectus, the Tax Qualified and
Non-Tax Qualified Employee Plans shall be entitled to increase their
subscriptions by a percentage equal to the percentage increase in the amount of
shares to be issued above the maximum of the appraisal range provided that such
subscriptions shall continue to be subject to applicable purchase limits and
stock allocation procedures.
H. Undelivered, Defective or Late Order Forms; Insufficient Payment
----------------------------------------------------------------
The Boards of Directors of the Holding Company and the Bank shall have
the absolute right, in their sole discretion, to reject any Order Form,
including but not limited to, any Order Forms which (i) are not delivered or are
returned by the United States Postal Service (or the addressee cannot be
located); (ii) are not received back by the Bank or its representative, or are
received after the termination date specified thereon; (iii) are defectively
completed or executed; (iv) are not accompanied by the total required payment
for the shares of Holding Company Conversion Stock subscribed for (including
cases in which the subscribers' Deposit Accounts or certificate accounts are
insufficient to cover the authorized withdrawal for the required payment); or
(v) are submitted by or on behalf of a Person whose representations the Boards
of Directors of the Holding Company and the Bank believe to be false or who they
otherwise believe, either alone or acting in concert with others, is violating,
evading or circumventing, or intends to violate, evade or circumvent, the terms
and conditions of this Plan. In such event, the Subscription Rights of the
Person to whom such rights have been granted will not be honored and will be
treated as though such Person failed to return the completed Order Form within
the time period specified therein. The Bank may, but will not be required to,
waive any irregularity relating to any Order Form or require submission of
corrected Order Forms or the remittance of full payment for subscribed shares by
such date as the Bank may specify. The interpretation of the Holding Company and
the Bank of the terms and conditions of this Plan and of the proper completion
of the Order Form will be final, subject to the authority of the OTS.
A-16
<PAGE>
I. Member in Non-Qualified States or in Foreign Countries
------------------------------------------------------
The Holding Company and the Bank will make reasonable efforts to comply
with the securities laws of all states in the United States in which Persons
entitled to subscribe for Holding Company Conversion Stock pursuant to the Plan
reside. However, no shares will be offered or sold under the Plan of Conversion
to any such Person who (1) resides in a foreign country or (2) resides in a
state of the United States in which a small number of Persons otherwise eligible
to subscribe for shares under the Plan of Conversion reside or as to which the
Holding Company and the Bank determine that compliance with the securities laws
of such state would be impracticable for reasons of cost or otherwise,
including, but not limited to, a requirement that the Holding Company or the
Bank or any of their officers, directors or employees register, under the
securities laws of such state, as a broker, dealer, salesman or agent. No
payments will be made in lieu of the granting of Subscription Rights to any such
Person.
VI. FEDERAL STOCK CHARTER AND BYLAWS
--------------------------------
A. As part of the Conversion, the Bank will take all appropriate steps
to amend its charter to read in the form of federal stock savings institution
charter as prescribed by the OTS. A copy of the proposed stock charter is
available upon request. By their approval of the Plan, the Members of the Bank
will thereby approve and adopt such charter.
B. The Bank will also take appropriate steps to amend its bylaws to read
in the form prescribed by the OTS for a federal stock savings institution. A
copy of the proposed federal stock bylaws is available upon request.
C. The effective date of the adoption of the Bank's federal stock
charter and bylaws shall be the date of the issuance and sale of the Holding
Company Conversion Stock as specified by the OTS.
VII. HOLDING COMPANY CERTIFICATE OF INCORPORATION
--------------------------------------------
A copy of the proposed certificate of incorporation of the Holding
Company will be made available from the Bank upon request.
VIII. DIRECTORS OF THE CONVERTED BANK
-------------------------------
Each Person serving as a member of the Board of Directors of the Bank at
the time of the Conversion will thereupon become a director of the Converted
Bank.
IX. STOCK OPTION AND INCENTIVE PLAN AND RECOGNITION AND RETENTION PLAN
------------------------------------------------------------------
In order to provide an incentive for directors, Officers and employees of
the Holding Company and its subsidiaries (including the Bank), the Board of
Directors of the Holding
A-17
<PAGE>
Company intends to adopt, subject to shareholder approval, a Stock option and
incentive plan and a recognition and retention plan as soon as permitted by
applicable regulation.
X. CONTRIBUTIONS TO TAX-QUALIFIED EMPLOYEE PLANS
---------------------------------------------
The Converted Bank and the Holding Company may in their discretion make
scheduled contributions to any Tax-Qualified Employee Plans, provided that any
such contributions which are for the acquisition of Holding Company Conversion
Stock, or the repayment of debt incurred for such an acquisition, do not cause
the Converted Bank to fail to meet its regulatory capital requirements.
XI. SECURITIES REGISTRATION AND MARKET MAKING
-----------------------------------------
Promptly following the Conversion, the Holding Company will register its
common stock with the SEC pursuant to the Exchange Act. In connection with the
registration, the Holding Company will undertake not to deregister such common
stock, without the approval of the OTS, for a period of three years thereafter.
The Holding Company shall use its best efforts to encourage and assist
two or more market makers to establish and maintain a market for its common
stock promptly following Conversion. The Holding Company will also use its best
efforts to cause its common stock to be quoted on the Nasdaq System or to be
listed on a national or regional securities exchange.
XII. STATUS OF SAVINGS ACCOUNTS AND LOANS SUBSEQUENT TO CONVERSION
-------------------------------------------------------------
Each Deposit Account holder shall retain, without payment, a withdrawable
Deposit Account or Accounts in the Converted Bank, equal in amount to the
withdrawable value of such account holder's Deposit Account or Accounts prior to
Conversion. All Deposit Accounts will continue to be insured by the Federal
Deposit Insurance Corporation up to the applicable limits of insurance coverage,
and shall be subject to the same terms and conditions (except as to voting and
liquidation rights) as such Deposit Account in the Bank at the time of the
Conversion. All loans shall retain the same status after Conversion as these
loans had prior to Conversion.
XIII. LIQUIDATION ACCOUNT
-------------------
For purposes of granting to Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain Deposit Accounts at the
Converted Bank a priority in the event of a complete liquidation of the
Converted Bank, the Converted Bank will, at the time of Conversion, establish a
liquidation account in an amount equal to the net worth of the Bank as shown on
its latest statement of financial condition contained in the final offering
circular used in connection with the Conversion. The creation and maintenance of
the liquidation account will not operate to restrict the use or application of
any of the regulatory capital accounts of the Converted Bank; provided, however,
that such regulatory capital accounts will not be voluntarily reduced below the
required dollar amount of the liquidation account. Each Eligible Account Holder
and
A-18
<PAGE>
Supplemental Eligible Account Holder shall, with respect to the Deposit Account
held, have a related inchoate interest in a portion of the liquidation account
balance ("subaccount balance").
The initial subaccount balance of a Deposit Account held by an Eligible
Account Holder or Supplemental Eligible Account Holder shall be determined by
multiplying the opening balance in the liquidation account by a fraction of
which the numerator is the amount of the Qualifying Deposit in the Deposit
Account on the Eligibility Record Date or the Supplemental Eligibility Record
Date and the denominator is the total amount of the Qualifying Deposits of all
Eligible Account Holders and Supplemental Eligible Account Holders on such
record dates in the Bank. Such initial subaccount balance shall not be
increased, and it shall be subject to downward adjustment as provided below.
If the deposit balance in any Deposit Account of an Eligible Account
Holder or Supplemental Eligible Account Holder at the close of business on any
annual closing date subsequent to the record date is less than the lesser of (i)
the deposit balance in such Deposit Account at the close of business on any
other annual closing date subsequent to the Eligibility Record Date or the
Supplemental Eligibility Record Date or (ii) the amount of the Qualifying
Deposit in such Deposit Account on the Eligibility Record Date or Supplemental
Eligibility Record Date, the subaccount balance shall be reduced in an amount
proportionate to the reduction in such deposit balance. In the event of a
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any increase in the deposit balance of the related Deposit
Account. If all funds in such Deposit Account are withdrawn, the related
subaccount balance shall be reduced to zero.
In the event of a complete liquidation of the Bank (and only in such
event), each Eligible Account Holder and Supplemental Eligible Account Holder
shall be entitled to receive a liquidation distribution from the liquidation
account in the amount of the then-current adjusted subaccount balances for
Deposit Accounts then held before any liquidation distribution may be made to
stockholders. No merger, consolidation, bulk purchase of assets with assumptions
of Deposit Accounts and other liabilities, or similar transactions with another
institution the accounts of which are insured by the Federal Deposit Insurance
Corporation, shall be considered to be a complete liquidation. In such
transactions, the liquidation account shall be assumed by the surviving
institution.
XIV. RESTRICTIONS ON ACQUISITION OF CONVERTED BANK
---------------------------------------------
Regulations of the OTS limit acquisitions, and offers to acquire, direct
or indirect beneficial ownership of more than 10% of any class of an equity
security of the Converted Bank or the Holding Company. In addition, consistent
with the regulations of the OTS, the charter of the Converted Bank shall provide
that for a period of five years following completion of the Conversion: (i) no
Person (i.e., no individual, group acting in concert, corporation, partnership,
Bank, joint stock company, trust, or unincorporated organization or similar
company, syndicate, or any other group formed for the purpose of acquiring,
holding or disposing of securities of an insured institution) shall directly or
indirectly offer to acquire or acquire beneficial ownership of more than 10% of
any class of the Bank's equity securities. Shares beneficially owned in
A-19
<PAGE>
violation of this charter provision shall not be counted as shares entitled to
vote and shall not be voted by any Person or counted as voting shares in
connection with any matter submitted to the shareholders for a vote. This
limitation shall not apply to any offer to acquire or acquisition of beneficial
ownership of more than 10% of the common stock of the Bank by a corporation
whose ownership is or will be substantially the same as the ownership of the
Bank, provided that the offer or acquisition is made more than one year
following the date of completion of the Conversion; (ii) shareholders shall not
be permitted to cumulate their votes for elections of directors; and (iii)
special meetings of the shareholders relating to changes in control or amendment
of the charter may only be called by the Board of Directors.
XV. AMENDMENT OR TERMINATION OF PLAN
--------------------------------
If necessary or desirable, the Plan may be amended at any time prior to
submission of the Plan and proxy materials to the Members by a two-thirds vote
of the respective Boards of Directors of the Holding Company and the Bank. After
submission of the Plan and proxy materials to the Members, the Plan may be
amended by a two-thirds vote of the respective Boards of Directors of the
Holding Company and the Bank only with the concurrence of the OTS. Any
amendments to the Plan made after approval by the Members with the concurrence
of the OTS shall not necessitate further approval by the Members unless
otherwise required.
The Plan may be terminated by a two-thirds vote of the Bank's Board of
Directors at any time prior to the Special Meeting of Members, and at any time
following such Special Meeting with the concurrence of the OTS. In its
discretion, the Board of Directors of the Bank may modify or terminate the Plan
upon the order or with the approval of the OTS and without further approval by
Members. The Plan shall terminate if the sale of all shares of Conversion Stock
is not completed within 24 months of the date of the Special Meeting. A specific
resolution approved by a majority of the Board of Directors of the Bank is
required in order for the Bank to terminate the Plan prior to the end of such 24
month period.
XVI. EXPENSES OF THE CONVERSION
--------------------------
The Holding Company and the Bank shall use their best efforts to assure
that expenses incurred by them in connection with the Conversion shall be
reasonable.
XVII. TAX RULING
----------
Consummation of the Conversion is expressly conditioned upon prior
receipt of either a ruling of the United States Internal Revenue Service or an
opinion of tax counsel with respect to federal taxation, and either a ruling of
the Missouri taxation authorities or an opinion of tax counsel or other tax
advisor with respect to Missouri taxation, to the effect that consummation of
the transactions contemplated herein will not be taxable to the Holding Company
or the Bank.
A-20
<PAGE>
XVIII. EXTENSION OF CREDIT FOR PURCHASE OF COMMON STOCK
------------------------------------------------
The Bank may not knowingly loan funds or otherwise extend credit to any
Person to purchase in the Conversion shares of Holding Company Conversion Stock.
A-21
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
CBES BANCORP, INC.
FIRST: The name of the Corporation is CBES Bancorp, Inc. (hereinafter
-----
sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
------
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
-----
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH: A. The total number of shares of all classes of stock which
------
the Corporation shall have the authority to issue is four million (4,000,000)
consisting of:
1. Five hundred thousand (500,000) shares of preferred
stock, par value one cent ($.01) per share (the "Preferred Stock"); and
2. Three and one-half million (3,500,000) shares of common
stock, par value one cent ($.01) per share (the "Common Stock").
B. The Board of Directors is hereby expressly authorized,
subject to any limitations prescribed by law, to provide for the issuance of the
shares of Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware (such certificate being hereinafter
referred to as a "Preferred Stock Designation"), to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. The number of
authorized shares of the Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock, without a vote of the holders of
the Preferred Stock, or of any series thereof, unless a vote of any such holders
is required pursuant to the terms of any Preferred Stock Designation.
C. 1. Notwithstanding any other provision of this Certificate
of Incorporation, in no event shall any record owner of any outstanding
Common Stock which is beneficially owned, directly or indirectly, by a
person who, as of any record date for the determination of stockholders
entitled to vote on any matter, beneficially owns in excess of 10% of the
then-outstanding shares of Common Stock (the "Limit"), be entitled, or
permitted to any vote in respect of the shares held in excess of the Limit.
The number of votes which may be cast by any record owner by virtue of the
provisions hereof in respect of Common Stock beneficially owned by such
person beneficially owning shares in excess of the Limit shall be a number
equal to the total number of votes which a single record owner of all
Common Stock owned by such person would be entitled to cast (subject to
this Article FOURTH), multiplied by a fraction, the numerator of which is
the number of shares of such class or
<PAGE>
series which are both beneficially owned by such person and owned of record
by such record owner and the denominator of which is the total number of
shares of Common Stock beneficially owned by such person owning shares in
excess of the Limit.
2. The following definitions shall apply to this Section C
of this Article FOURTH:
(a) An "Affiliate" shall have the meaning ascribed to
it in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended, as in effect on the
date of filing of this Certificate of Incorporation.
(b) "Beneficial ownership" shall be determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended, (or any
successor rule or statutory provision), or, if said Rule 13d-3
shall be rescinded and there shall be no successor rule or
statutory provision thereto, pursuant to said Rule 13d-3 as in
effect on the date of filing of this Certificate of
Incorporation; provided, however, that a person shall, in any
event, also be deemed the "beneficial owner" of any Common Stock:
(1) which such person or any of its affiliates
beneficially owns, directly or indirectly; or
(2) which such person or any of its affiliates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding (but
shall not be deemed to be the beneficial owner of any voting
shares solely by reason of an agreement, contract, or other
arrangement with this Corporation to effect any transaction
which is described in any one or more of the clauses 1
through 5 of Section A of Article EIGHTH) or upon the
exercise of conversion rights, exchange rights, warrants, or
options or otherwise, or (ii) sole or shared voting or
investment power with respect thereto pursuant to any
agreement, arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the beneficial
owner of any voting shares solely by reason of a revocable
proxy granted for a particular meeting of stockholders,
pursuant to a public solicitation of proxies for such
meeting, with respect to shares of which neither such person
nor any such affiliate is otherwise deemed the beneficial
owner); or
(3) which is beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its affiliates acts as a
partnership, limited partnership, syndicate or other group
pursuant to any agreement, arrangement or
-2-
<PAGE>
understanding for the purpose of acquiring, holding, voting
or disposing of any shares of capital stock of this
Corporation;
and provided further, however, that (1) no director or officer of
this Corporation (or any affiliate of any such director or
officer) shall, solely by reason of any or all of such directors
or officers acting in their capacities as such, be deemed, for
any purposes hereof, to beneficially own any Common Stock
beneficially owned by any other such director or officer (or any
affiliate thereof), and (2) neither any employee stock ownership
or similar plan of this Corporation or any subsidiary of this
Corporation nor any trustee with respect thereto (or any
affiliate of such trustee) shall, solely by reason of such
capacity of such trustee, be deemed, for any purposes hereof, to
beneficially own any Common Stock held under any such plan. For
purposes of computing the percentage beneficial ownership of
Common Stock of a person, the outstanding Common Stock shall
include shares deemed owned by such person through application of
this subsection but shall not include any other Common Stock
which may be issuable by this Corporation pursuant to any
agreement, or upon exercise of conversion rights, warrants or
options, or otherwise. For all other purposes, the outstanding
Common Stock shall include only Common Stock then outstanding and
shall not include any Common Stock which may be issuable by this
Corporation pursuant to any agreement, or upon the exercise of
conversion rights, warrants or options, or otherwise.
(c) The "Limit" shall mean 10% of the then-outstanding
shares of Common Stock.
(d) A "person" shall mean any individual, firm,
corporation, or other entity.
3. The Board of Directors shall have the power to construe
and apply the provisions of this section and to make all determinations
necessary or desirable to implement such provisions, including but not
limited to matters with respect to (i) the number of shares of Common Stock
beneficially owned by any person, (ii) whether a person is an affiliate of
another, (iii) whether a person has an agreement, arrangement, or
understanding with another as to the matters referred to in the definition
of beneficial ownership, (iv) the application of any other definition or
operative provision of this Section to the given facts, or (v) any other
matter relating to the applicability or effect of this Section.
4. The Board of Directors shall have the right to demand
that any person who is reasonably believed to beneficially own Common Stock
in excess of the Limit (or holds of record Common Stock beneficially owned
by any person in excess of the Limit) (a "Holder in Excess") supply the
Corporation with complete information as to (1) the record owner(s) of all
shares beneficially owned by such Holder in Excess, and (2) any other
factual matter relating to the applicability or effect
-3-
<PAGE>
of this section as may reasonably be requested of such Holder in Excess.
The Board of Directors shall further have the right to receive from any
Holder in Excess reimbursement for all expenses incurred by the Board in
connection with its investigation of any matters relating to the
applicability or effect of this section on such Holder in Excess, to the
extent such investigation is deemed appropriate by the Board of Directors
as a result of the Holder in Excess refusing to supply the Corporation with
the information described in the previous sentence.
5. Except as otherwise provided by law or expressly
provided in this Section C, the presence, in person or by proxy, of the
holders of record of shares of capital stock of the Corporation entitling
the holders thereof to cast one-third of the votes (after giving effect, if
required, to the provisions of this Section C) entitled to be cast by the
holders of shares of capital stock of the Corporation entitled to vote
shall constitute a quorum at all meetings of the stockholders, and every
reference in this Certificate of Incorporation to a majority or other
proportion of capital stock (or the holders thereof) for purposes of
determining any quorum requirement or any requirement for stockholder
consent or approval shall be deemed to refer to such majority or other
proportion of the votes (or the holders thereof) then entitled to be cast
in respect of such capital stock.
6. Any constructions, applications, or determinations made
by the Board of Directors, pursuant to this Section in good faith and on
the basis of such information and assistance as was then reasonably
available for such purpose, shall be conclusive and binding upon the
Corporation and its stockholders.
7. In the event any provision (or portion thereof) of this
Section C shall be found to be invalid, prohibited or unenforceable for any
reason, the remaining provisions (or portions thereof) of this Section
shall remain in full force and effect, and shall be construed as if such
invalid, prohibited or unenforceable provision had been stricken herefrom
or otherwise rendered inapplicable, it being the intent of this Corporation
and its stockholders that each such remaining provision (or portion
thereof) of this Section C remain, to the fullest extent permitted by law,
applicable and enforceable as to all stockholders, including stockholders
owning an amount of stock over the Limit, notwithstanding any such finding.
FIFTH: The following provisions are inserted for the management of the
-----
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
A. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. In addition to the
powers and authority expressly conferred upon them by Statute or by this
Certificate of Incorporation or the Bylaws of the Corporation, the directors are
hereby empowered to exercise all such powers and do all such acts and things as
may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by
written ballot unless the Bylaws so provide.
-4-
<PAGE>
C. Subject to the rights of holders of any class or series of
Preferred Stock, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
D. Subject to the rights of holders of any class or series of
Preferred Stock, special meetings of stockholders of the Corporation may be
called only by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Corporation would have if
there were no vacancies on the Board of Directors (the "Whole Board").
SIXTH: A. The number of directors shall be fixed from time to time
-----
exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the Whole Board. The directors, other than those who may be elected
by the holders of any class or series of Preferred Stock, shall be divided into
three classes, with the term of office of the first class to expire at the
conclusion of the first annual meeting of stockholders, the term of office of
the second class to expire at the conclusion of the annual meeting of
stockholders one year thereafter and the term of office of the third class to
expire at the conclusion of the annual meeting of stockholders two years
thereafter, with each director to hold office until his or her successor shall
have been duly elected and qualified. At each annual meeting of stockholders
following such initial classification and election, directors elected to succeed
those directors whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of stockholders after their
election, with each director to hold office until his or her successor shall
have been duly elected and qualified.
B. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been elected expires,
and until such director's successor shall have been duly elected and qualified.
No decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
C. Advance notice of stockholder nominations for the election
of directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
Bylaws of the Corporation.
D. Subject to the rights of the holders of any series of
Preferred Stock then outstanding, any directors, or the entire Board of
Directors, may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 80% of the voting power of
all of the then-outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (after giving effect to the
provisions of Article FOURTH of this Certificate of Incorporation), voting
together as a single class.
-5-
<PAGE>
SEVENTH: The Board of Directors is expressly empowered to adopt, amend or
-------
repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the
Bylaws of the Corporation by the Board of Directors shall require the approval
of a majority of the Whole Board. The stockholders shall also have power to
adopt, amend or repeal the Bylaws of the Corporation; provided, however, that,
in addition to any vote of the holders of any class or series of stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80% of the voting power of all of
the then-outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors (after giving effect to the
provisions of Article FOURTH hereof), voting together as a single class, shall
be required to adopt, amend or repeal any provisions of the Bylaws of the
Corporation.
EIGHTH: A. In addition to any affirmative vote required by law or this
------
Certificate of Incorporation, and except as otherwise expressly provided in this
Article EIGHTH:
1. any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself
an Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of transactions) to or
with any Interested Stockholder, or any Affiliate of any Interested
Stockholder, of any assets of the Corporation or any Subsidiary having an
aggregate Fair Market Value (as hereafter defined) equaling or exceeding
25% or more of the combined assets of the Corporation and its Subsidiaries;
or
3. the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of transactions) of any
securities of the Corporation or any Subsidiary to any Interested
Stockholder or any Affiliate of any Interested Stockholder in exchange for
cash, securities or other property (or a combination thereof) having an
aggregate Fair Market Value equaling or exceeding 25% of the combined Fair
Market Value of the outstanding common stock of the Corporation and its
Subsidiaries except pursuant to an employee benefit plan of the Corporation
or any Subsidiary thereof; or
4. the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on behalf of
any Interested Stockholder or any Affiliate of any Interested Stockholder;
or
5. any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or any merger
or consolidation of the Corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or otherwise involving an
Interested Stockholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class
of equity or convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested Stockholder or any
Affiliate of any Interested
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Stockholder or any Affiliate of any Interested Stockholder (a
"Disproportionate Transaction"); provided, however, that no such transaction
shall be deemed a Disproportionate Transaction if the increase in the
proportionate ownership of the Interested Stockholder or Affiliate as a result
of such transaction is no greater than the increase experienced by the other
stockholders generally;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of directors (the "Voting Stock") (after giving effect to
the provisions of Article FOURTH), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or by any other
provisions of this Certificate of Incorporation or any Preferred Stock
Designation or in any agreement with any national securities exchange or
quotation system or otherwise.
The term "Business Combination" as used in this Article EIGHTH
shall mean any transaction which is referred to in any one or more of paragraphs
1 through 5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not
be applicable to any particular Business Combination, and such Business
Combination shall require only the affirmative vote of the majority of the
outstanding shares of capital stock entitled to vote after giving effect to the
provisions of Article FOURTH, or such vote (if any) as is required by law or by
this Certificate of Incorporation, if, in the case of any Business Combination
that does not involve any cash or other consideration being received by the
stockholders of the Corporation solely in their capacity as stockholders of the
Corporation, the condition specified in the following paragraph 1 is met or, in
the case of any other Business Combination, all of the conditions specified in
either of the following paragraphs 1 and 2 are met:
1. The Business Combination shall have been approved by a
majority of the Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business Combination
of consideration other than cash to be received per share by the
holders of Common Stock in such Business Combination shall at least be
equal to the higher of the following:
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the
Interested Stockholder or any of its Affiliates for any shares of
Common Stock acquired by it (i) within the two-year period
immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date"),
or (ii)
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in the transaction in which it became an Interested Stockholder,
whichever is higher.
(2) the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested
Stockholder became an Interested Stockholder (such latter date is
referred to in this Article EIGHTH as the "Determination Date"),
whichever is higher.
(b) The aggregate amount of the cash and the Fair Market Value
as of the date of the consummation of the Business Combination of
consideration other than cash to be received per share by holders of
shares of any class of outstanding Voting Stock other than Common
Stock shall be at least equal to the highest of the following (it
being intended that the requirements of this subparagraph (b) shall be
required to be met with respect to every such class of outstanding
Voting Stock, whether or not the Interested Stockholder has previously
acquired any shares of a particular class of Voting Stock):
(1) (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage commissions,
transfer taxes and soliciting dealers' fees, paid by the
Interested Stockholder for any shares of such class of Voting
Stock acquired by it (i) within the two-year period immediately
prior to the Announcement Date, or (ii) in the transaction in
which it became an Interested Stockholder, whichever is higher;
(2) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation; and
(3) the Fair Market Value per share of such class of Voting
Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(c) The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock) shall be in
cash or in the same form as the Interested Stockholder has previously
paid for shares of such class of Voting Stock. If the Interested
Stockholder has paid for shares of any class of Voting Stock with
varying forms of consideration, the form of consideration to be
received per share by holders of shares of such class of Voting Stock
shall be either cash or the form used to acquire the largest number of
shares of such class of Voting Stock previously acquired by the
Interested Stockholder. The price determined in accordance with
subparagraph B.2 of this Article EIGHTH shall
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be subject to appropriate adjustment in the event of any stock
dividend, stock split, combination of shares or similar event.
(d) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination: (1) except as approved by a majority of the Disinterested
Directors, there shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends (whether or not
cumulative) on any outstanding stock having preference over the Common
Stock as to dividends or liquidation; (2) there shall have been (i) no
reduction in the annual rate of dividends paid on the Common Stock
(except as necessary to reflect any subdivision of the Common Stock),
except as approved by a majority of the Disinterested Directors, and
(ii) an increase in such annual rate of dividends as necessary to
reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of Common
Stock, unless the failure to so increase such annual rate is approved
by a majority of the Disinterested Directors; and (3) neither such
Interested Stockholder nor any of its Affiliates shall
have become the beneficial owner of any additional shares of Voting
Stock except as part of the transaction which results in such
Interested Stockholder becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided, directly or indirectly, by the Corporation, whether in
anticipation of or in connection with such Business Combination or
otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (or any subsequent provisions replacing such
Act, rules or regulations thereunder) shall be mailed to stockholders
of the Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or subsequent
provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, a group acting in
concert, a corporation, a partnership, an association, a joint venture, a
pool, a joint stock company, a trust, an unincorporated organization or
similar company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities or any other entity.
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<PAGE>
2. "Interested Stockholder" shall mean any Person (other than
the Corporation or any holding company or Subsidiary thereof) who or which:
(a) is the beneficial owner, directly or indirectly, of
more than 10% of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time
within the two-year period immediately prior to the date in question
was the beneficial owner, directly or indirectly, of 10% or more of
the voting power of the then-outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year
period immediately prior to the date in question beneficially owned by
any Interested Stockholder, if such assignment or succession shall
have occurred in the course of a transaction or series of transactions
not involving a public offering within the meaning of the Securities
Act of 1933, as amended.
3. For purposes of this Article EIGHTH, "beneficial ownership"
shall be determined in the manner provided in Section C of Article FOURTH
hereof.
4. For the purpose of determining whether a Person is an
Interested Stockholder pursuant to Paragraph 2 of this Section C, the
number of shares of Voting Stock deemed to be outstanding shall include
shares deemed owned through application of Paragraph 3 of this Section C
but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
5. "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, as in
effect on the date of filing of this Certificate of Incorporation.
6. "Subsidiary" means any corporation of which a majority of
any class of equity security is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in Paragraph 2 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
7. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Stockholder and was a
member of the Board of Directors prior to the time that the Interested
Stockholder became an Interested Stockholder, and any director who is
thereafter chosen to fill any vacancy on the Board of Directors or who is
elected and who, in either event, is unaffiliated with the Interested
Stockholder, and in connection with his or her initial assumption of office
is recommended for appointment or election by a majority of Disinterested
Directors then on the Board of Directors.
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<PAGE>
8. "Fair Market Value" means:
(a) in the case of stock, the highest closing sales
price of the stock during the 30-day period immediately preceding the
date in question of a share of such stock of the National Association
of Securities Dealers Automated Quotations ("NASDAQ") System or any
system then in use, or, if such stock is admitted to trading on a
principal United States securities exchange registered under the
Securities Exchange Act of 1934, as amended, Fair Market Value shall
be the highest sale price reported during the 30-day period preceding
the date in question, or, if no such quotations are available, the
Fair Market Value on the date in question of a share of such stock as
determined by the Board of Directors in good faith, in each case with
respect to any class of stock, appropriately adjusted for any dividend
or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification
of outstanding shares of such stock into a smaller number of shares of
such stock, and
(b) in the case of property other than cash or stock,
the Fair Market Value of such property on the date in question as
determined by the Board of Directors in good faith.
9. Reference to "Highest Per Share Price" shall in each
case with respect to any class of stock reflect an appropriate adjustment
for any dividend or distribution in shares of such stock or any stock split
or reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such
stock.
10. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be
received" as used in Subparagraphs (a) and (b) of Paragraph 2 of Section B
of this Article EIGHTH shall include the shares of Common Stock and/or the
shares of any other class of outstanding Voting Stock retained by the
holders of such shares.
D. A majority of the Disinterested Directors of the Corporation
shall have the power and duty to determine for the purposes of this Article
EIGHTH, on the basis of information known to them after reasonable inquiry: (a)
whether a person is an Interested Stockholder; (b) the number of shares of
Voting Stock beneficially owned by any person; (c) whether a person is an
Affiliate or Associate of another; and (d) whether the assets which are the
subject of any Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the Corporation or any Subsidiary
in any Business Combination has an aggregate Fair Market Value equaling or
exceeding 25% of the combined Fair Market Value of the common stock of the
Corporation and its Subsidiaries. A majority of the Disinterested Directors
shall have the further power to interpret all of the terms and provisions of
this Article EIGHTH.
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<PAGE>
E. Nothing contained in this Article EIGHTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation imposed by
law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least 80% of the voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class, shall be required
to alter, amend or repeal this Article EIGHTH.
NINTH: The Board of Directors of the Corporation, when evaluating any
-----
offer of another Person (as defined in Article EIGHTH hereof) to (A) make a
tender or exchange offer for any equity security of the Corporation, (B) merge
or consolidate the Corporation with another corporation or entity or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, those factors that Directors of any subsidiary of the Corporation
may consider in evaluating any action that may result in a change or potential
change in control of the subsidiary, and the social and economic effect of
acceptance of such offer: on the Corporation's present and future customers and
employees and those of its Subsidiaries (as defined in Article EIGHTH hereof);
on the communities in which the Corporation and its Subsidiaries operate or are
located; on the ability of the Corporation to fulfill its corporate objectives
as a financial institution holding company under applicable laws and regulations
and on the ability of its subsidiary financial institution to fulfill the
objectives of a federally insured financial institution under applicable
statutes and regulations.
TENTH: A. Except as set forth in Section B of this Article TENTH, in
-----
addition to any affirmative vote of stockholders required by law or this
Certificate of Incorporation, any direct or indirect purchase or other
acquisition by the Corporation of any Equity Security (as hereinafter defined)
of any class from any Interested Person (as hereinafter defined) shall require
the affirmative vote of the holders of at least 80% of the Voting Stock of the
Corporation that is not beneficially owned (for purposes of this Article TENTH
beneficial ownership shall be determined in accordance with Section C.2(b) of
Article FOURTH hereof) by such Interested Person, voting together as a single
class. Such affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that a lesser percentage may be specified, by law or by
any other provisions of this Certificate of Incorporation or any Preferred Stock
Designation or in any agreement with any national securities exchange or
quotation system, or otherwise. Certain defined terms used in this Article
TENTH are as set forth in Section C below.
B. The provisions of Section A of this Article TENTH shall not
be applicable with respect to:
1. any purchase or other acquisition of securities made as
part of a tender or exchange offer by the Corporation or a Subsidiary
(which term, as used in this Article TENTH, is as defined in the first
clause of Section C.6 of Article EIGHTH hereof) of the
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Corporation to purchase securities of the same class made on the same terms
to all holders of such securities and complying with the applicable
requirements of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provision replacing such Act,
rules or regulations);
2. any purchase or acquisition made pursuant to an open
market purchase program approved by a majority of the Board of Directors,
including a majority of the Disinterested Directors (which term, as used in
this Article TENTH, is as defined in Article EIGHTH hereof); or
3. any purchase or acquisition which is approved by a
majority of the Board of Directors, including a majority of the
Disinterested Directors, and which is made at no more than the Market Price
(as hereinafter defined), on the date that the understanding between the
Corporation and the Interested Person is reached with respect to such
purchase (whether or not such purchase is made or a written agreement
relating to such purchase is executed on such date), of shares of the class
of Equity Security to be purchased.
C. For the purposes of this Article TENTH:
1. The term Interested Person shall mean any Person (other
than the Corporation, Subsidiaries of the Corporation, pension, profit
sharing, employee stock ownership or other employee benefit plans of the
Corporation and its Subsidiaries, entities organized or established by the
Corporation or any of its Subsidiaries pursuant to the terms of such plans
and trustees and fiduciaries with respect to any such plan acting in such
capacity) that is the direct or indirect beneficial owner of 5% or more of
the Voting Stock of the Corporation, and any Affiliate or Associate of any
such person.
2. The Market Price of shares of a class of Equity
Security on any day shall mean the highest sale price of shares of such
class of Equity Security on such day, or, if that day is not a trading day,
on the trading day immediately preceding such day, on the national
securities exchange or the NASDAQ System or any other system then in use on
which such class of Equity Security is traded.
3. The term Equity Security shall mean any security
described in Section 3(a)(11) of the Securities Exchange Act of 1934, as in
effect on September 20, 1993, which is traded on a national securities
exchange or the NASDAQ System or any other system then in use.
4. For purposes of this Article TENTH, all references to
the term Interested Stockholder in the definition of Disinterested Director
shall be deemed to refer to the term Interested Person.
ELEVENTH: A. Each person who was or is made a party or is threatened to
--------
be made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or an
officer of the Corporation or is or was serving at the request of the
Corporation as a director or officer of another corporation, including, without
limitation,
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<PAGE>
any Subsidiary (as defined in Article EIGHTH herein), partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a director or officer or
in any other capacity while serving as a director or officer, shall be
indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith; provided, however, that, except as provided in Section C hereof with
respect to proceedings to enforce rights to indemnification, the Corporation
shall indemnify any such indemnitee in connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof)
was authorized by the Board of Directors of the Corporation.
B. The right to indemnification conferred in Section A of this
Article ELEVENTH shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however, that,
if the Delaware General Corporation Law requires, an advancement of expenses
incurred by an indemnitee in his or her capacity as a director or officer (and
not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service to an employee benefit plan)
shall be made only upon delivery to the Corporation of an undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication"), that such indemnitee is not entitled to be indemnified for such
expenses under this Section or otherwise. The rights to indemnification and to
the advancement of expenses conferred in Sections A and B of this Article
ELEVENTH shall be contract rights and such rights shall continue as to an
indemnitee who has ceased to be a director or officer and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
C. If a claim under Section A or B of this Article ELEVENTH is
not paid in full by the Corporation within sixty days after a written claim has
been received by the Corporation, except in the case of a claim for an
advancement of expenses, in which case the applicable period shall be twenty
days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
shall also be entitled to be paid the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) in any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
any applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation (including its Board of
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Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article ELEVENTH or otherwise shall be on
the Corporation.
D. The rights to indemnification and to the advancement of
expenses conferred in this Article ELEVENTH shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, the
Corporation's Certificate of Incorporation, Bylaws, agreement, vote of
stockholders or Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to
time by a majority vote of the Disinterested Directors, grant rights to
indemnification and to the advancement of expenses to any employee or agent of
the Corporation to the fullest extent of the provisions of this Article with
respect to the indemnification and advancement of expenses of directors and
officers of the Corporation.
TWELFTH: A director of this Corporation shall not be personally liable to
-------
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an improper
personal benefit. If the Delaware General Corporation Law is hereafter amended
to further eliminate or limit the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification .
THIRTEENTH: The Corporation reserves the right to amend or repeal any
----------
provision contained in this Certificate of Incorporation in the manner
prescribed
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<PAGE>
by the laws of the State of Delaware and all rights conferred upon stockholders
are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80% of the voting power of all of
the then-outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors (after giving effect to the
provisions of Article FOURTH), voting together as a single class, shall be
required to amend or repeal this Article THIRTEENTH, Section C of Article
FOURTH, Sections C or D of Article FIFTH, Article SIXTH, Article SEVENTH,
Article EIGHTH, Article TENTH or Article ELEVENTH.
FOURTEENTH: The name and mailing address of the sole incorporator are as
----------
follows:
<TABLE>
<CAPTION>
NAME MAILING ADDRESS
---- ---------------
<S> <C>
Larry E. Hermreck 1001 N. Jesse James Road
Excelsior Springs, Missouri 64024
</TABLE>
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<PAGE>
I, THE UNDERSIGNED, being the incorporator, for the purpose of forming a
corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, do certify that the facts herein stated are
true, and, accordingly, have hereto set my hand this ____ day of ____, 1996.
___________________________________
Larry E. Hermreck
Incorporator
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<PAGE>
Exhibit 3.2
CBES BANCORP, INC.
BYLAWS
ARTICLE I - STOCKHOLDERS
Section 1. Annual Meeting.
--------------
An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix.
Section 2. Special Meetings.
----------------
Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, special meetings of stockholders of the Corporation
may be called only by the Board of Directors pursuant to a resolution adopted by
a majority of the total number of directors which the Corporation would have if
there were no vacancies on the Board of Directors (hereinafter the "Whole
Board").
Section 3. Notice of Meetings.
------------------
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
------
At any meeting of the stockholders, the holders of at least one-third of
all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy (after giving effect to the provisions of Article FOURTH of
the Corporation's Certificate of Incorporation), shall constitute a quorum for
all purposes, unless or except to the extent that the presence of a larger
number may be required by law. Where a separate vote by a class or classes is
required, a majority of the shares of such class or classes, present in person
or represented by proxy (after giving effect to the provisions of Article FOURTH
of the Corporation's Certificate of Incorporation), shall constitute a quorum
entitled to take action with respect to that vote on that matter.
<PAGE>
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date
or time.
If a notice of any adjourned special meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present in person or by proxy constituting a quorum, then except as otherwise
required by law, those present in person or by proxy at such adjourned meeting
shall constitute a quorum, and all matters shall be determined by a majority of
the votes cast at such meeting.
Section 5. Organization.
------------
Such person as the Board of Directors may have designated or, in the
absence of such a person, the President of the Corporation or, in his or her
absence, such person as may be chosen by the holders of a majority of the shares
entitled to vote who are present, in person or by proxy, shall call to order any
meeting of the stockholders and act as chairman of the meeting. In the absence
of the Secretary of the Corporation, the secretary of the meeting shall be such
person as the chairman appoints.
Section 6. Conduct of Business.
-------------------
(a) The chairman of any meeting of stockholders shall determine the
order of business and the procedure at the meeting, including such regulation of
the manner of voting and the conduct of discussion as seem to him or her in
order. The date and time of the opening and closing of the polls for each matter
upon which the stockholders will vote at the meeting shall be announced at the
meeting.
(b) At any annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (i) by or at
the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the business must
relate to a proper subject matter for stockholder action and the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered or mailed to
and received at the principal executive offices of the Corporation not less than
ninety (90) days prior to the date of the annual meeting; provided, however,
that in the event that less than one hundred (100) days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders, notice
by the stockholder to be timely must be received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter such
stockholder proposes to bring before the annual meeting (i) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (ii) the name and address,
as they appear on the Corporation's books, of the stockholder who proposed such
business, (iii) the class and number of shares of the Corporation's capital
stock that are beneficially owned by such stockholder and (iv) any material
interest of such stockholder in such business. Notwithstanding anything in these
Bylaws to the contrary, no business shall be
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brought before or conducted at an annual meeting except in accordance with the
provisions of this Section 6(b). The officer of the Corporation or other person
presiding over the annual meeting shall, if the facts so warrant, determine and
declare to the meeting that business was not properly brought before the meeting
in accordance with the provisions of this Section 6(b) and, if he should so
determine, he shall so declare to the meeting and any such business so
determined to be not properly brought before the meeting shall not be
transacted.
At any special meeting of the stockholders, only such business shall
be conducted as shall have been brought before the meeting by or at the
direction of the Board of Directors.
(c) Only persons who are nominated in accordance with the
procedures set forth in these Bylaws shall be eligible for election as
directors. Nominations of persons for election to the Board of Directors of the
Corporation may be made at a meeting of stockholders at which directors are to
be elected only (i) by or at the direction of the Board of Directors or (ii) by
any stockholder of the Corporation entitled to vote for the election of
directors at the meeting who complies with the notice procedures set forth in
this Section 6(c). Such nominations, other than those made by or at the
direction of the Board of Directors, shall be made by timely notice in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice shall
be delivered or mailed to and received at the principal executive offices of the
Corporation not less than ninety (90) days prior to the date of the meeting;
provided, however, that in the event that less than one hundred (100) days'
notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed or such prior public disclosure was
made. Such stockholder's notice shall set forth (i) as to each person whom such
stockholder proposes to nominate for election or re-election as a director, all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (ii) as to
the stockholder giving the notice (a) the name and address, as they appear on
the Corporation's books, of such stockholder and (b) the class and number of
shares of the Corporation's capital stock that are beneficially owned by such
stockholder. At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a director shall furnish to the Secretary
of the Corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a director of the Corporation unless nominated in accordance
with the provisions of this Section 6(c). The officer of the Corporation or
other person presiding at the meeting shall, if the facts so warrant, determine
that a nomination was not made in accordance with such provisions and, if he or
she should so determine, he or she shall so declare to the meeting and the
defective nomination shall be disregarded.
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Section 7. Proxies and Voting.
------------------
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing filed in
accordance with the procedure established for the meeting. Any facsimile
telecommunication or other reliable reproduction of the writing or transmission
created pursuant to this paragraph may be substituted or used in lieu of the
original writing or transmission for any and all purposes for which the original
writing or transmission could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of the
entire original writing or transmission.
All voting, including on the election of Directors but excepting where
otherwise required by law or by the governing documents of the Corporation, may
be by a voice vote; provided, however, that upon demand therefor by a
stockholder entitled to vote or his or her proxy, a stock vote shall be taken.
Every stock vote shall be taken by ballot, each of which shall state the name of
the stockholder or proxy voting and such other information as may be required
under the procedure established for the meeting. The Corporation shall, in
advance of any meeting of stockholders, appoint one or more inspectors to act at
the meeting and make a written report thereof. The Corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. If no inspector or alternate is able to act at a meeting of
stockholders, the person presiding at the meeting shall appoint one or more
inspectors at the meeting. Each inspector, before entering upon the discharge of
his duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his ability.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or as provided in the Certificate of
Incorporation, all other matters shall be determined by a majority of the votes
cast.
Each stockholder shall have one (1) vote for every share of stock entitled
to vote which is registered in his or her name on the record date for the
meeting, except as otherwise provided herein or in the Certificate of
Incorporation of the Corporation or as required by law.
Section 8. Stock List.
----------
A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held.
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Section 9. Consent of Stockholders in Lieu of Meeting.
------------------------------------------
Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
ARTICLE II - BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
-----------------------------------------
The business and affairs of the Corporation shall be under the direction of
its Board of Directors. The number of directors who shall constitute the Whole
Board shall be such number as the Board of Directors shall from time to time
have designated, except in the absence of such designation, in which case the
number shall be six. The Board of Directors shall annually elect a Chairman of
the Board from among its members who shall, when present, preside at its
meetings.
The directors, other than those who may be elected by the holders of any
class or series of preferred stock, shall be divided, with respect to the time
for which they severally hold office, into three classes, with the term of
office of the first class to expire at the conclusion of the first annual
meeting of stockholders, the term of office of the second class to expire at the
conclusion of the annual meeting of stockholders one year thereafter and the
term of office of the third class to expire at the conclusion of the annual
meeting of stockholders two years thereafter, with each director to hold office
until his or her successor shall have been duly elected and qualified. At each
annual meeting of stockholders, directors elected to succeed those directors
whose terms expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until his or her successor shall have been duly elected
and qualified.
Section 2. Vacancies and Newly Created Directorships.
-----------------------------------------
Subject to the rights of the holders of any class or series of preferred
stock and unless the Board of Directors otherwise determines, newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause may be filled
only by a majority vote of the directors then in office, though less than a
quorum, and directors so chosen shall hold office for a term expiring at the
annual meeting of stockholders at which the term of office of the class to which
they have been elected expires, and until such director's successor shall have
been duly elected and qualified. No decrease in the number of authorized
directors constituting the Board shall shorten the term of any incumbent
director.
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Section 3. Regular Meetings.
----------------
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
----------------
Special meetings of the Board of Directors may be called by one-third (1/3)
of the directors then in office (rounded up to the nearest whole number) or by
the Chairman of the Board or President and shall be held at such place, on such
date, and at such time as they or he or she shall fix. Notice of the place,
date, and time of each such special meeting shall be given to each director by
whom it is not waived by mailing written notice not less than five (5) days
before the meeting or by telegraphing or telexing or by facsimile transmission
of the same not less than twenty-four (24) hours before the meeting. Unless
otherwise indicated in the notice thereof, any and all business may be
transacted at a special meeting.
Section 5. Quorum.
------
At any meeting of the Board of Directors, a majority of the Whole Board
shall constitute a quorum for all purposes. If a quorum shall fail to attend
any meeting, a majority of those present may adjourn the meeting to another
place, date, or time, without further notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
-------------------------------------------------
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
-------------------
At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
Section 8. Powers.
------
The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:
(a) To declare dividends from time to time in accordance with law;
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(b) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
(c) To authorize the creation, making and issuance, in such form as
it may determine, of written obligations of every kind, negotiable or non-
negotiable, secured or unsecured, and to do all things necessary in connection
therewith;
(d) To remove any officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any officer upon any
other person for the time being;
(e) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(f) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers, employees and agents
of the Corporation and its subsidiaries as it may determine;
(g) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
(h) To adopt from time to time regulations, not inconsistent with
these Bylaws, for the management of the Corporation's business and affairs.
Section 9. Compensation of Directors.
-------------------------
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committees of the
Board of Directors.
ARTICLE III - COMMITTEES
Section 1. Committees of the Board of Directors.
------------------------------------
The Board of Directors, by a vote of a majority of the Board of Directors,
may from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any committee so
designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation Law if the resolution which designated the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.
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Section 2. Conduct of Business.
-------------------
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of such committee.
Section 3. Nominating Committee.
--------------------
The Board of Directors shall appoint a Nominating Committee of the Board,
consisting of not less than three (3) members. The Nominating Committee shall
have authority (a) to review any nominations for election to the Board of
Directors made by a stockholder of the Corporation pursuant to Section 6(c)(ii)
of Article I of these Bylaws in order to determine compliance with such Bylaw
and (b) to recommend to the Whole Board nominees for election to the Board of
Directors to replace those directors whose terms expire at the annual meeting of
stockholders next ensuing.
ARTICLE IV - OFFICERS
Section 1. Generally.
---------
(a) The Board of Directors as soon as may be practicable after the
annual meeting of stockholders shall choose a Chairman of the Board, a
President, a Secretary and a Treasurer and from time to time may choose such
other officers as it may deem proper. The Chairman of the Board shall be chosen
from among the directors. Any number of offices may be held by the same person.
(b) The term of office of all officers shall be until the next
annual election of officers and until their respective successors are chosen,
but any officer may be removed from office at any time by the affirmative vote
of a majority of the authorized number of directors then constituting the Board
of Directors.
(c) All officers chosen by the Board of Directors shall each have
such powers and duties as generally pertain to their respective offices, subject
to the specific provisions of this Article IV. Such officers shall also have
such powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof.
Section 2. President.
---------
The President shall have general power over the management and oversight of
the administration and operation of the Corporation's business and general
supervisory power and authority over its policies and affairs. He shall see
that all orders and resolutions of the Board of Directors and of any committee
thereof are carried into effect.
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Each meeting of the stockholders and of the Board of Directors shall be
presided over by such person as has been designated by the Board of Directors
or, in his absence, by such officer or other person as is chosen at the meeting.
The Secretary or, in his absence, the General Counsel of the Corporation or such
officer as has been designated by the Board of Directors or, in his absence,
such officer or other person as is chosen by the person presiding, shall act as
secretary of each such meeting.
Section 3. Vice President.
--------------
The Vice President or Vice Presidents, if any, shall perform the duties of
the President in his absence or during his disability to act. In addition, the
Vice Presidents shall perform the duties and exercise the powers usually
incident to their respective offices and/or such other duties and powers as may
be properly assigned to them from time to time by the Board of Directors, the
Chairman of the Board or the President. A Vice President or Vice Presidents may
be designated as Executive Vice President or Senior Vice President.
Section 4. Secretary.
---------
The Secretary or an Assistant Secretary shall issue notices of meetings,
shall keep their minutes, shall have charge of the seal and the corporate books,
shall perform such other duties and exercise such other powers as are usually
incident to such offices and/or such other duties and powers as are properly
assigned thereto by the Board of Directors, the Chairman of the Board or the
President.
Section 5. Treasurer.
---------
The Treasurer shall have charge of all monies and securities of the
Corporation, other than monies and securities of any division of the Corporation
which has a treasurer or financial officer appointed by the Board of Directors,
and shall keep regular books of account. The funds of the Corporation shall be
deposited in the name of the Corporation by the Treasurer with such banks or
trust companies or other entities as the Board of Directors from time to time
shall designate. He shall sign or countersign such instruments as require his
signature, shall perform all such duties and have all such powers as are usually
incident to such office and/or such other duties and powers as are properly
assigned to him by the Board of Directors, the Chairman of the Board or the
President, and may be required to give bond, payable by the Corporation, for the
faithful performance of his duties in such sum and with such surety as may be
required by the Board of Directors.
Section 6. Assistant Secretaries and Other Officers.
----------------------------------------
The Board of Directors may appoint one or more assistant secretaries and
such other officers who shall have such powers and shall perform such duties as
are provided in these Bylaws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the President.
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Section 7. Action with Respect to Securities of Other Corporations.
-------------------------------------------------------
Unless otherwise directed by the Board of Directors, the President or any
officer of the Corporation authorized by the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other Corporation.
ARTICLE V - STOCK
Section 1. Certificates of Stock.
---------------------
Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by, the Chairman of the Board, Vice Chairman of the
Board, President or a Vice President, and by the Secretary or an Assistant
Secretary, or the Treasurer or an Assistant Treasurer, certifying the number of
shares owned by him or her. Any or all of the signatures on the certificate may
be by facsimile.
Section 2. Transfers of Stock.
------------------
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these Bylaws,
an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefore.
Section 3. Record Date.
-----------
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held, and, for determining stockholders entitled to
receive payment of any dividend or other distribution or allotment of rights or
to exercise any rights of change, conversion or exchange of stock or for any
other purpose, the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.
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A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates.
--------------------------------------
In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.
Section 5. Regulations.
-----------
The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.
ARTICLE VI - NOTICES
Section 1. Notices.
-------
Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, director, officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in the mails,
postage paid, or by sending such notice by prepaid telegram or mailgram or other
courier or by sending such notice by facsimile machine or other electronic
transmission. Any such notice shall be addressed to such stockholder, director,
officer, employee or agent at his or her last known address as the same appears
on the books of the Corporation. The time when such notice is received, if hand
delivered, or dispatched, if delivered through the mails, by telegram or
mailgram or other courier or by facsimile machine or other electronic
transmission, shall be the time of the giving of the notice.
Section 2. Waivers.
-------
A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII - MISCELLANEOUS
Section 1. Facsimile Signatures.
--------------------
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these Bylaws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
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Section 2. Corporate Seal.
--------------
The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
----------------------------------------
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
Section 4. Fiscal Year.
-----------
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
Section 5. Time Periods.
------------
In applying any provision of these Bylaws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded
and the day of the event shall be included.
ARTICLE VIII - AMENDMENTS
The Bylaws of the Corporation may be adopted, amended or repealed as
provided in Article SEVENTH of the Certificate of Incorporation of the
Corporation.
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Exhibit 3.3
FEDERAL STOCK CHARTER
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
SECTION 1. CORPORATE TITLE. The full corporate title of the savings
association is "COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK"
SECTION 2. OFFICE. The home office of the savings association shall be
located in Excelsior Springs, Missouri.
SECTION 3. DURATION. The duration of the savings association is
perpetual.
SECTION 4. PURPOSE AND POWERS. The purpose of the savings association is
to pursue any or all of the lawful objectives of a Federal savings association
chartered under Section 5 of the Home Owners' Loan Act and to exercise all of
the express, implied, and incidental powers conferred thereby and by all acts
amendatory thereof and supplemental thereto, subject to the Constitution and
laws of the United States as they are now in effect, or as they may hereafter be
amended, and subject to all lawful and applicable rules, regulations, and orders
of the Office of Thrift Supervision ("Office").
SECTION 5. CAPITAL STOCK. The total number of shares of all classes of
the capital stock which the savings association has the authority to issue is
4,000,000 shares of which 3,500,000 shares shall be common stock of par value of
$.01 per share and of which 500,000 shares shall be serial preferred stock. The
shares may be issued from time to time as authorized by the board of directors
without further approval of its shareholders, except as otherwise provided in
this Section 5 or to the extent that such approval is required by governing law,
rule, or regulation. The consideration for the issuance of the shares shall be
paid in full before their issuance and shall not be less than the par value.
Neither promissory notes nor future services shall constitute payment or part
payment for the issuance of shares of the savings association. The
consideration for the shares shall be cash, tangible or intangible property (to
the extent direct investment in such property would be permitted), labor, or
services actually performed for the savings association or any combination of
the foregoing. In the absence of actual fraud in the transaction, the value of
such property, labor, or services, as determined by the board of directors of
the savings association, shall be conclusive. Upon payment of such
consideration, such shares shall be deemed to be fully paid and nonassessable.
In the case of a stock dividend, that part of the surplus of the savings
association which is transferred to stated capital upon the issuance of shares
as a share dividend shall be deemed to be the consideration for their issuance.
Except for shares issuable in connection with the conversion of the savings
association from the mutual to the stock form of capitalization, no shares of
capital stock (including shares issuable upon conversion, exchange, or exercise
of other securities) shall be issued, directly or indirectly, to officers,
directors, or controlling persons of the savings association other than as part
of a general public offering or as qualifying shares to a director, unless their
issuance or the plan under which they would be issued has been approved by a
majority of the total votes eligible to be cast at a legal meeting.
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class of a series of capital stock to
vote as a separate class or series or to more than one vote per share, except as
to the cumulation of votes for the election of directors; Provided, That this
restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of preferred
stock, voting as a class or series, to elect some members of the
board of directors, less than a majority thereof, in the event of
default in the payment of dividends on any class or series of
preferred stock;
(ii) To any provision which would require the holders of preferred
stock, voting as a class or series, to approve the merger or
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consolidation of the savings association with another corporation
or the sale, lease, or conveyance (other than by mortgage or
pledge) of properties or business in exchange for securities of a
corporation other than the savings association if the preferred
stock is exchanged for securities of such other corporation;
Provided, That no provision may require such approval for
transactions undertaken with the assistance or pursuant to the
direction of the Office, the Federal Deposit Insurance
Corporation or the Resolution Trust Corporation;
(iii) To any amendment which would adversely change the specific terms
of any class or series of capital stock as set forth in this
Section 5 (or in any supplementary sections hereto), including
any amendment which would create or enlarge any class or series
ranking prior thereto in rights and preferences. An amendment
which increases the number of authorized shares of any class or
series of capital stock, or substitutes the surviving savings
association in a merger or consolidation for the savings
association, shall not be considered to be such an adverse
change.
A description of the different classes and series (if any) of the savings
association's capital stock and a statement of the designations, and the
relative rights, preferences, and limitations of the shares of each class of and
series (if any) of capital stock are as follows:
A. Common Stock. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of the common stock shall
exclusively possess all voting power. Each holder of shares of common stock
shall be entitled to one vote for each share held by such holder, except as to
the cumulation of votes for the election of directors.
Whenever there shall have been paid, or declared and set aside for payment,
to the holders of the outstanding shares of any class of stock having preference
over the common stock as to the payment of dividends, the full amount of
dividends and of sinking fund, retirement fund, or other retirement payments, if
any, to which such holders are respectively entitled in preference to the common
stock, then dividends may be paid on the common stock and on any class or series
of stock entitled to participate therewith as to dividends out of any assets
legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the savings
association, the holders of the common stock (and the holders of any class or
series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the savings association available for distribution remaining after:
(i) Payment or provision for payment of the savings association's debts and
liabilities; (ii) distributions or provision for distributions in settlement of
its liquidation account; and (iii) distributions or provisions for distributions
to holders of any class or series of stock having preference over the common
stock in the liquidation, dissolution, or winding up of the savings association.
Each share of common stock shall have the same relative rights as and be
identical in all respects with all the other shares of common stock.
B. Preferred Stock. The savings association may provide in supplementary
sections to its charter for one or more classes of preferred stock, which shall
be separately identified. The shares of any class may be divided into and
issued in series, with each series separately designated so as to distinguish
the shares thereof from the shares of all other series and classes. The terms
of each series shall be set forth in a supplementary section to the charter.
All shares of the same class shall be identical except as to the following
relative rights and preferences, as to which there may be variations between
different series:
(a) The distinctive serial designation and the number of shares
constituting such series;
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(b) The dividend rate or the amount of dividends to be paid on the shares
of such series, whether dividends shall be cumulative and, if so, from
which date(s) the payment date(s) for dividends, and the participating
or other special rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such series;
(d) Whether the shares of such series shall be redeemable and, if so, the
price(s) at which, and the terms and conditions on which such shares
may be redeemed;
(e) The amount(s) payable upon the shares of such series in the event of
voluntary or involuntary liquidation, dissolution, or winding up of
the savings association;
(f) Whether the shares of such series shall be entitled to the benefit of
a sinking or retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the amount of such fund
and the manner of its application, including the price(s) at which
such shares may be redeemed or purchased through the application of
such fund;
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes of stock of the
savings association and, if so, the conversion price(s), or the
rate(s) of exchange, and the adjustments thereof, if any, at which
such conversion or exchange may be made, and any other terms and
conditions of such conversion or exchange;
(h) The price or other consideration for which the shares of such series
shall be issued; and
(i) Whether the shares of such series which are redeemed or converted
shall have the status of authorized but unissued shares of serial
preferred stock and whether such shares may be reissued as shares of
the same or any other series of serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption of
supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established by a
supplementary charter section adopted by the board of directors, the savings
association shall file with the Secretary to the Office a dated copy of that
supplementary section of this charter established and designating the series and
fixing and determining the relative rights and preferences thereof.
SECTION 6. PREEMPTIVE RIGHTS. Holders of the capital stock of the savings
association shall not be entitled to preemptive rights with respect to any
shares of the savings association which may be issued.
SECTION 7. LIQUIDATION ACCOUNT. Pursuant to the requirements of the
Office's regulations (12 C.F.R. Subchapter D), the savings association shall
establish and maintain a liquidation account for the benefit of its savings
account holders as of March 31, 1995 and June 30, 1996 ("eligible savers"). In
the event of a complete liquidation of the savings association, it shall comply
with such regulations with respect to the amount and the priorities on
liquidation of each of the savings association's eligible saver's inchoate
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interest in the liquidation account, to the extent it is still in existence;
Provided, That an eligible saver's inchoate interest in the liquidation account
shall not entitle such eligible saver to any voting rights at meetings of the
savings association's shareholders.
SECTION 8. CERTAIN PROVISIONS APPLICABLE FOR FIVE YEARS. Notwithstanding
anything contained in the savings association's charter or bylaws to the
contrary, for a period of five years from the date of completion of the
conversion of the savings association from mutual to stock form, the following
provisions shall apply:
A. Beneficial Ownership Limitation. No person shall directly or
indirectly offer to acquire or acquire the beneficial ownership of more than 10%
of any class of an equity security of the savings association. This limitation
shall not apply to a transaction in which the savings association forms a
holding company without change in the respective beneficial ownership interests
of its shareholders other than pursuant to the exercise of any dissenter and
appraisal rights, the purchase of shares by underwriters in connection with a
public offering, or the purchase of shares by a tax-qualified employee stock
benefit plan which is exempt from the approval requirements under (S)
574.3(c)(1)(vi) of the Office's regulations.
In the event shares are acquired in violation of this Section 8, all shares
beneficially owned by any person in excess of 10% shall be considered "excess
shares" and shall not be counted as shares entitled to vote and shall not be
voted by any person or counted as voting shares in connection with any matters
submitted to the shareholders for a vote.
For purposes of this Section 8, the following definitions apply:
(1) The term "person" includes an individual, a group acting in concert, a
corporation, a partnership, an association, a joint stock company, a trust, an
unincorporated organization or similar company, a syndicate or any other group
formed for the purpose of acquiring, holding or disposing of the equity
securities of the savings association.
(2) The term "offer" includes every offer to buy or otherwise acquire,
solicitation of an offer to sell, tender offer for, or request or invitation for
tenders of, a security or interest in a security for value.
(3) The term "acquire" includes every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise.
(4) The term "acting in concert" means (a) knowing participation in a
joint activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) a combination or pooling of voting or
other interests in the securities of an issuer for a common purpose pursuant to
any contract, understanding, relationship, agreement or other arrangements,
whether written or otherwise.
B. Cumulative Voting Limitation. Shareholders shall not be permitted to
cumulate their votes for election of directors.
C. Call for Special Meetings. Special meetings of shareholders relating
to changes in control of the savings association or amendments to its charter
shall be called only upon direction of the Board of Directors.
SECTION 9. DIRECTORS. The savings association shall be under the
direction of a board of directors. The authorized number of directors, as
stated in the savings association's bylaws, shall not be fewer than five nor
more than fifteen except when a greater number is approved by the Director of
the Office.
SECTION 10. AMENDMENT OF CHARTER. Except as provided in Section 5, no
amendment, addition, alteration, change or repeal of this charter shall be made,
unless such is first proposed by the board of directors of the savings
association, then preliminarily approved by the Office, which preliminary
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approval may be granted by the Office, pursuant to regulations specifying
preapproved charter amendments, and thereafter approved by the shareholders by a
majority of the total votes eligible to be cast at a legal meeting. Any
amendment, addition, alteration, change, or repeal so acted upon shall be
effective upon filing with the Office in accordance with regulatory procedures
or on such other date as the Office may specify in its preliminary approval.
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COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
ATTEST:_______________________________ By:_______________________________
____________________ Larry E. Hermreck
Secretary Chief Executive Officer
DIRECTOR OF THE OFFICE
OF THRIFT SUPERVISION
ATTEST:_______________________________ By:______________________________
Secretary of the Office
of Thrift Supervision
Declared effective this ______ day of _____________________________, 1996.
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Exhibit 3.4
BYLAWS OF
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
ARTICLE I
HOME OFFICE
The home office of the savings association shall be located in Excelsior
Springs the County of Clay, State of Missouri.
ARTICLE II
SHAREHOLDERS
SECTION 1. PLACE OF MEETINGS. All annual and special meetings of
shareholders shall be held at the home office of the savings association or at
such other place in the State in which the principal place of business of the
savings association is located as the board of directors may determine.
SECTION 2. ANNUAL MEETING. A meeting of shareholders of the savings
association for the election of directors and for the transaction or any other
business of the savings association shall be held annually within 120 days after
the end of the savings association's fiscal year on the third Thursday of
October, if not a legal holiday, and if a legal holiday, then on the next day
following which is not a legal holiday, at 2:00 p.m., or at such other date and
time within such 120-day period as the board of directors may determine.
SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders for any
purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision ("Office"), may be called at any time by the
chairman of the board, the president or a majority of the board of directors,
and shall be called by the chairman of the board, the president, or the
secretary upon the written request of the holders of not less than one-tenth of
all of the outstanding capital stock of the savings association entitled to vote
at the meeting. Such written request shall state the purpose or purposes of the
meeting and shall be delivered to the home office of the savings association
addressed to the chairman of the board, the president, or the secretary.
SECTION 4. CONDUCT OF MEETINGS. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws. The
board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
SECTION 5. NOTICE OF MEETINGS. Written notice stating the place, day and
hour of the meeting and the purpose(s) for which the meeting is called shall be
delivered not fewer than 10 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the shareholder at the address as it appears on the stock transfer
books or records of the savings association as of the record date prescribed in
Section 6 of this Article II with postage prepaid. When any shareholders'
meeting, either annual or special, is adjourned for 30 days or more, notice of
the adjourned meeting shall be given as in the case of an original meeting. It
shall not be necessary to give any notice of the time and place of any meeting
adjourned for less than 30 days or of the business to be transacted at the
meeting, other than an announcement at the meeting at which such adjournment is
taken.
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SECTION 6. FIXING OF RECORD DATE. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the board of directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more than
60 days and, in case of a meeting of shareholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment.
SECTION 7. VOTING LISTS. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the savings association shall make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment, arranged in alphabetical
order, with the address and the number of shares held by each. This list of
shareholders shall be kept on file at the home office of the savings association
and shall be subject to inspection by any shareholder at any time during usual
business hours for a period of 20 days prior to such meeting. Such list shall
also be produced and kept open at the time and place of the meeting and shall be
subject to inspection by any shareholder during the entire time of the meeting.
The original stock transfer book shall constitute prima facie evidence of the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders. In lieu of making the shareholder list available for
inspection by shareholders as provided in the preceding paragraph, the board of
directors may elect to follow the procedures prescribed in (S) 552.6(d) of the
Office's regulations as now or hereafter in effect.
SECTION 8. QUORUM. A majority of the outstanding shares of the savings
association entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to constitute less than a quorum.
SECTION 9. PROXIES. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his or her duly
authorized attorney in fact. Proxies solicited on behalf of the management shall
be voted as directed by the shareholder or, in the absence of such direction, as
determined by a majority of the board of directors. No proxy shall be valid more
than eleven months from the date of its execution except for a proxy coupled
with an interest.
SECTION 10. VOTING OF SHARES IN THE NAME OF TWO OR MORE PERSONS. When
ownership stands in the name of two or more persons, in the absence of written
directions to the savings association to the contrary, at any meeting of the
shareholders of the savings association any one or more of such shareholders may
cast, in person or by proxy, all votes to which such ownership is entitled. In
the event an attempt is made to cast conflicting votes, in person or by proxy,
by the several persons in whose names shares of stock stand, the vote or votes
to which those persons are entitled shall be cast as directed by a majority of
those holding such stock and present in person or by proxy at such meeting, but
no votes shall be cast for such stock if a majority cannot agree.
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SECTION 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer into his or her name if authority to do so is contained in
an appropriate order of the court or other public authority by which such
receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the savings association
nor shares held by another corporation, if a majority of the shares entitled to
vote for the election of directors of such other corporation are held by the
savings association, shall be voted at any meeting or counted in determining the
total number of outstanding shares at any given time for purposes of any
meeting.
SECTION 12. CUMULATIVE VOTING. Unless otherwise provided in the charter
of the savings association, every shareholder entitled to vote at an election
for directors shall have the right to vote, in person or by proxy, the number of
shares owned by the shareholder for as many persons as there are directors to be
elected and for whose election the shareholder has a right to vote, or to
cumulate the votes by giving one candidate as many votes as the number of such
directors to be elected multiplied by the number of shares shall equal or by
distributing such votes on the same principle among any number of candidates.
SECTION 13. INSPECTORS OF ELECTION. In advance of any meeting of
shareholders, the board of directors may appoint any person other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the board of
directors in advance of the meeting or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares and the voting
power of each share, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; receiving votes,
ballots or consents; hearing and determining all challenges and questions in any
way arising in connection with the rights to vote; counting and tabulating all
votes or consents; determining the result; and such acts as may be proper to
conduct the election or vote with fairness to all shareholders.
SECTION 14. NOMINATING COMMITTEE. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of a nominee substituted as a result of the death
or other incapacity of a management nominee, the nominating committee shall
deliver written nominations to the secretary at least 20 days prior to the date
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of the annual meeting. Upon delivery, such nominations shall be posted in a
conspicuous place in each office of the savings association. No nominations for
directors except those made by the nominating committee shall be voted upon at
the annual meeting unless other nominations by shareholders are made in writing
and delivered to the secretary of the savings association at least five days
prior to the date of the annual meeting. Upon delivery, such nominations shall
be posted in a conspicuous place in each office of the savings association.
Ballots bearing the names of all the persons nominated by the nominating
committee and by shareholders shall be provided for use at the annual meeting.
However, if the nominating committee shall fail or refuse to act at least 20
days prior to the annual meeting, nominations for directors may be made at the
annual meeting by any shareholder entitled to vote and shall be voted upon.
SECTION 15. NEW BUSINESS. At an annual meeting of shareholders only such
new business shall be conducted, and only such proposals shall be acted upon, as
shall have been properly brought before the meeting. For any new business
proposed by management to be properly brought before the annual meeting, such
new business shall be approved by the board of directors, either directly or
through its approval of proxy solicitation materials related thereto, and shall
be stated in writing and filed with the secretary of the savings association at
least 20 days before the date of the annual meeting, and all business so stated,
proposed and filed shall be considered at the annual meeting. Any shareholder
may make any other proposal at the annual meeting and the same may be discussed
and considered, but unless properly brought before the meeting such proposal
shall not be acted upon at the meeting. For a proposal to be properly brought
before an annual meeting by a shareholder, the shareholder must have given
timely notice thereof in writing to the secretary of the savings association. To
be timely, a shareholder's notice must be delivered to or received at the
principal executive offices of the savings association, not less than 20 days
prior to the meeting; provided, however, that in the event that less than 30
days notice of the date of the meeting is given to shareholders (which notice
shall be accompanied by a proxy or information statement which describes each
matter proposed by the board of directors to be acted upon at the meeting),
notice by the shareholder to be timely must be so received not later than the
close of business on the 10th day following the day on which such notice of the
date of the annual meeting was mailed. A shareholder's notice to the secretary
shall set forth as to each matter the shareholder proposes to bring before the
annual meeting: (a) a brief description of the proposal desired to be brought
before the annual meeting; (b) the name and address of the shareholder proposing
such business, and (c) the class and number of shares of the savings association
which are owned of record by the shareholder. Notwithstanding anything in the
bylaws to the contrary, no business shall be conducted at an annual meeting
except in accordance with the procedures set forth in this Section 15.
SECTION 16. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at a meeting of shareholders, or any other action which may be taken at a
meeting of shareholders, may be taken without a meeting if consent in writing,
setting forth the action so taken, shall be given by all of the shareholders
entitled to vote with respect to the subject matter.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the savings
association shall be under the direction of its board of directors. The board of
directors shall annually elect a chairman of the board and a president from
among its members and shall designate, when present, either the chairman of the
board or the president to preside at its meetings.
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SECTION 2. NUMBER AND TERM. The board of directors shall consist of six
members and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually.
SECTION 3. REGULAR MEETINGS. A regular meeting of the board of directors
shall be held without other notice than this bylaw immediately after, and at the
same place as, the annual meeting of shareholders. The board of directors may
provide, by resolution, the time and place, within the savings association's
normal lending territory, for the holding of additional regular meetings without
other notice than such resolution.
SECTION 4. QUALIFICATION. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the savings
association unless the savings association is a wholly-owned subsidiary of a
holding company.
SECTION 5. SPECIAL MEETINGS. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the president,
or one-third of the directors. The persons authorized to call special meetings
of the board of directors may fix any place, within the savings association's
normal lending territory, as the place for holding any special meeting of the
board of directors called by such persons.
Members of the board of directors may participate in special meetings by
means of conference telephone or similar communications equipment by which all
persons participating in the meeting can hear each other. Such participation
shall constitute presence in person but shall not constitute attendance for the
purpose of compensation pursuant to Section 12 of this Article.
SECTION 6. NOTICE. Written notice of any special meeting shall be given
to each director at least two days prior thereto when delivered personally or by
telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the mail so addressed, with postage
prepaid if mailed or when delivered to the telegraph company if sent by
telegram. Any director may waive notice of any meeting by a writing filed with
the secretary. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
SECTION 7. QUORUM. A majority of the number of directors fixed by Section
2 of this Article III shall constitute a quorum for the transaction of business
at any meeting of the board of directors; but if less than such majority is
present at a meeting, a majority of the directors present may adjourn the
meeting from time to time. Notice of any adjourned meeting shall be given in the
same manner as prescribed by Section 6 of this Article III.
SECTION 8. MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.
SECTION 9. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken by the board of directors at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the directors.
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SECTION 10. RESIGNATION. Any director may resign at any time by sending a
written notice of such resignation to the home office of the savings association
addressed to the chairman of the board or the president. Unless otherwise
specified, such resignation shall take effect upon receipt by the chairman of
the board or the president. More than three consecutive absences from regular
meetings of the board of directors, unless excused by resolution of the board of
directors, shall automatically constitute a resignation, effective when such
resignation is accepted by the board of directors.
SECTION 11. VACANCIES. Any vacancy occurring on the board of directors
may be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected to serve until the next election of directors by
the shareholders. Any directorship to be filled by reason of an increase in the
number of directors may be filled by election by the board of directors for a
term of office continuing only until the next election of directors by the
shareholders.
SECTION 12. COMPENSATION. Directors, as such, may receive a stated salary
for their services. By resolution of the board of directors, a reasonable fixed
sum, and reasonable expenses of attendance, if any, may be allowed for actual
attendance at each regular or special meeting of the board of directors. Members
of either standing or special committees may be allowed such compensation for
actual attendance at committee meetings as the board of directors may determine.
SECTION 13. PRESUMPTION OF ASSENT. A director of the savings association]
who is present at a meeting of the board of directors at which action on any
savings association matter is taken shall be presumed to have assented to the
action taken unless his or her dissent or abstention shall be entered in the
minutes of the meeting or unless he or she shall file a written dissent to such
action with the person acting as the secretary of the meeting before the
adjournment thereof or shall forward such dissent by registered mail to the
secretary of the savings association within five days after the date a copy of
the minutes of the meeting is received. Such right to dissent shall not apply to
a director who voted in favor of such action.
SECTION 14. REMOVAL OF DIRECTORS. At a meeting of shareholders called
expressly for that purpose, any director may be removed for cause by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors. If less than the entire board is to be removed, no one of the
directors may be removed if the votes cast against the removal would be
sufficient to elect a director if then cumulatively voted at an election of the
class of directors of which such director is a part. Whenever the holders of the
shares of any class are entitled to elect one or more directors by the
provisions of the charter or supplemental sections thereto, the provisions of
this section shall apply, in respect to the removal of a director or directors
so elected, to the vote of the holders of the outstanding shares of that class
and not to the vote of the outstanding shares as a whole.
SECTION 15. AGE LIMITATIONS. No person shall be eligible for election to
the board of directors who is more than 74 years of age and no person shall
continue to serve as a director after they have reached their 75th birthday.
With the maximum age being limited to the 75th birthday, it is understood that a
board member must be physically and mentally able to contribute to the board and
to carry out his or her fiduciary responsibilities, to be able to serve to the
maximum age limit. The office of director emeritus may be established by the
board of directors, but no emeritus director shall be authorized to vote or be
counted in determining a quorum to be subject to the age limitations herein set
forth.
6
<PAGE>
ARTICLE IV
EXECUTIVE AND OTHER COMMITTEES
SECTION 1. APPOINTMENT. The board of directors, by resolution adopted by
a majority of the full board, may designate the chief executive officer and two
or more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
SECTION 2. AUTHORITY. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the savings association, or recommending to the
shareholders a plan of merger, consolidation, or conversion; the sale, lease, or
other disposition of all or substantially all of the property and assets of the
savings association otherwise than in the usual and regular course of its
business; a voluntary dissolution of the savings association; a revocation of
any of the foregoing; or the approval of a transaction in which any member of
the executive committee, directly or indirectly, has any material beneficial
interest.
SECTION 3. TENURE. Subject to the provisions of Section 8 of this Article
IV, each member of the executive committee shall hold office until the next
regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.
SECTION 4. MEETINGS. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating the
place, date, and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
SECTION 5. QUORUM. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
SECTION 6. ACTION WITHOUT A MEETING. Any action required or permitted to
be taken by the executive committee at a meeting may be taken without a meeting
if a consent in writing, setting forth the action so taken, shall be signed by
all of the members of the executive committee.
SECTION 7. VACANCIES. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.
SECTION 8. RESIGNATIONS AND REMOVAL. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the savings association. Unless
otherwise specified, such resignation shall take effect upon its receipt; the
acceptance of such resignation shall not be necessary to make it effective.
7
<PAGE>
SECTION 9. PROCEDURE. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
SECTION 10. OTHER COMMITTEES. The board of directors may by resolution
establish an audit, loan or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
savings association and may prescribe the duties, constitution and procedures
thereof.
ARTICLE V
OFFICERS
SECTION 1. POSITIONS. The officers of the savings association shall be a
president, one or more vice presidents, a secretary and a treasurer, each of
whom shall be elected by the board of directors. The board of directors may also
designate the chairman of the board as an officer. The president shall be the
chief executive officer, unless the board of directors designates the chairman
of the board as chief executive officer. The president shall be a director of
the savings association. The offices of the secretary and treasurer may be held
by the same person and a vice president may also be either the secretary or the
treasurer. The board of directors may designate one or more vice presidents as
executive vice president or senior vice president. The board of directors may
also elect or authorize the appointment of such other officers as the business
of the savings association may require. The officers shall have such authority
and perform such duties as the board of directors may from time to time
authorize or determine. In the absence of action by the board of directors, the
officers shall have such powers and duties as generally pertain to their
respective offices.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the savings
association shall be elected annually at the first meeting of the board of
directors held after each annual meeting of the shareholders. If the election of
officers is not held at such meeting, such election shall be held as soon
thereafter as possible. Each officer shall hold office until a successor has
been duly elected and qualified or until the officer's death, resignation, or
removal in the manner hereinafter provided. Election or appointment of an
officer, employee or agent shall not of itself create contractual rights. The
board of directors may authorize the savings association to enter into an
employment contract with any officer in accordance with regulations of the
Office; but no such contract shall impair the right of the board of directors to
remove any officer at any time in accordance with Section 3 of this Article V.
SECTION 3. REMOVAL. Any officer may be removed by the board of directors
whenever in its judgment the best interests of the savings association will be
served thereby, but such removal, other than for cause, shall be without
prejudice to the contractual rights, if any, of the person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the board
of directors for the unexpired portion of the term.
SECTION 5. REMUNERATION. The remuneration of the officers shall be fixed
from time to time by the board of directors.
8
<PAGE>
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. CONTRACTS. To the extent permitted by regulations of the
Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the board of directors may authorize any officer,
employee, or agent of the savings association to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the savings
association. Such authority may be general or confined to specific instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the savings
association and no evidence of indebtedness shall be issued in its name unless
authorized by the board of directors. Such authority may be general or confined
to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the savings association shall be signed by one or more officers,
employees or agents of the savings association in such manner as shall from time
to time be determined by the board of directors.
SECTION 4. DEPOSITS. All funds of the savings association not otherwise
employed shall be deposited from time to time to the credit of the savings
association in any duly authorized depositories as the board of directors may
select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. CERTIFICATES FOR SHARES. Certificates representing shares of
capital stock of the savings association shall be in such form as shall be
determined by the board of directors and approved by the Office. Such
certificates shall be signed by the chief executive officer or by any other
officer of the savings association authorized by the board of directors,
attested by the secretary or an assistant secretary, and sealed with the
corporate seal or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles if the certificate is manually signed on behalf of
a transfer agent or a registrar other than the savings association itself or one
of its employees. Each certificate for shares of capital stock shall be
consecutively numbered or otherwise identified. The name and address of the
person to whom the shares are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the savings association.
All certificates surrendered to the savings association for transfer shall be
canceled and no new certificate shall be issued until the former certificate for
a like number of shares has been surrendered or cancelled, except that in case
of a lost or destroyed certificate, a new certificate may be issued upon such
terms and indemnity to the savings association as the board of directors may
prescribe.
SECTION 2. TRANSFER OF SHARES. Transfer of shares of capital stock of the
savings association shall be made only on its stock transfer books. Authority
for such transfer shall be given only by the holder of record or by his or her
legal representative, who shall furnish proper evidence of such authority, or by
his or her attorney authorized by a duly executed power of attorney and filed
with the savings association. Such transfer shall be made only on surrender for
cancellation of the certificate for such shares. The person in whose name shares
of capital stock stand on the books of the savings association shall be deemed
by the savings association to be the owner for all purposes.
9
<PAGE>
ARTICLE VIII
FISCAL YEAR; ANNUAL AUDIT
The fiscal year of the savings association shall end on the last day of
June of each year. The savings association shall be subject to an annual audit
as of the end of its fiscal year by independent public accountants appointed by
and responsible to the board of directors. The appointment of such accountants
shall be subject to annual ratification by the shareholders.
ARTICLE IX
DIVIDENDS
Subject to the terms of the savings association's charter and the
regulations and orders of the Office, the board of directors may, from time to
time, declare, and the savings association may pay, dividends on its outstanding
shares of capital stock.
ARTICLE X
CORPORATE SEAL
The board of directors shall provide a savings association seal which shall
be two concentric circles between which shall be the name of the savings
association. The year of incorporation or an emblem may appear in the center.
ARTICLE XI
AMENDMENTS
These bylaws may be amended in a manner consistent with the regulations of
the Office at any time by a majority vote of the full board of directors, or by
a majority vote of the votes cast by the shareholders of the savings association
at any legal meeting.
10
<PAGE>
Exhibit 4
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CBES BANCORP, INC.
EXCELSIOR SPRINGS, MISSOURI
$.01 par value common stock--fully paid and non assessable
This certifies that _____________________________ is the owner of __________
shares of the common stock of CBES Bancorp, Inc. (the "Corporation"), a Delaware
corporation.
The shares evidenced by this certificate are transferable only on the stock
transfer books of the Corporation by the holder of record hereof, in person or
by his duly authorized attorney or legal representative, upon surrender of this
certificate properly endorsed. This Certificate in not valid until
countersigned and registered by the Corporation's transfer agent and registrar.
THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR
GUARANTEED.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be executed
by the facsimile signatures of its duly authorized officers and has caused its
seal to be affixed hereto.
Dated:____________________
_______________________________ _______________________________
Secretary (SEAL) President
<PAGE>
The shares evidenced by this Certificate are subject to a limitation
contained in the Certificate of Incorporation to the effect that in no event
shall any record owner of any outstanding Common Stock which is beneficially
owned, directly or indirectly, by a person who beneficially owns in excess of
10% of the outstanding shares of Common Stock (the "Limit") be entitled or
permitted to any vote in respect of shares held in excess of the Limit.
The Board of Directors of the Corporation is authorized by resolution or
resolutions, from time to time adopted, to provide for the issuance of serial
preferred stock in series and to fix and state the voting powers, designations,
preferences, limitations and restrictions thereof. The Corporation will furnish
to any shareholder upon request and without charge a full description of each
class of stock and any series thereof.
The shares represented by this Certificate may not be cumulatively voted on
any matter. The Certificate of Incorporation requires the affirmative vote of
the holders of at least 80% of the voting stock of the Corporation, voting
together as a single class, to approve certain business combinations and other
transactions and to amend certain provisions of the Certificate of
Incorporation.
The following abbreviations when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM as tenants in common
TEN ENT as tenants by the entireties
JT TEN as joint tenants with right
of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ___________ Custodian _____________________________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
____________________________________
(State)
Additional abbreviations may also be used though not in the above list
For value received, _____________________________ hereby sell, assign and
transfer unto
- ----------------------------------------------------------------------
PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER
- ----------------------------------------------------------------------
_______________________________________________________________________________
(please print or typewrite name and address including postal
zip code of assignee)
_______________________________________________________________________________
_______________________________________________________________________________
Shares of the Common Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint ____________________________________________
__________ Attorney to transfer the said shares on the books of the within named
corporation with full power of substitution in the premises.
Dated, _____________________________
In the presence of Signature:
_____________________________ __________________________________________
NOTE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME OF THE
STOCKHOLDER(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
<PAGE>
Exhibit 5
_____________________, 1996
The Board of Directors
Community Bank of Excelsior Springs,
A Savings Bank
1001 N. Jesse James Road
Excelsior Springs, Missouri 64024-1201
RE: CBES BANCORP, INC.
COMMON STOCK PAR VALUE $.01 PER SHARE
-------------------------------------
Gentlemen:
You have requested the opinion of this firm as to certain matters in
connection with the offer and sale (the "Offering") of the CBES Bancorp, Inc.
("Company") Common Stock par value $.01 per share ("Common Stock"). We have
reviewed the Company's Certificate of Incorporation, Registration Statement on
Form SB-2 ("Form SB-2"), as well as applicable statutes and regulations
governing the Company and the offer and sale of the Common Stock.
We are of the opinion that upon the declaration of effectiveness of the
Form SB-2, the Common Stock, when sold, will be legally issued, fully paid and
non-assessable.
This opinion has been prepared solely for the use of the Company in
connection with the Form SB-2, and should not be used for any other purpose nor
relied upon by any other person (except for the Securities and Exchange
Commission in connection with its processing of the Form SB-2 and prospective
investors in the Offering), without the prior written consent of this firm. We
hereby consent to our firm being referenced under the caption "Legal Opinions."
Very truly yours,
LUSE LEHMAN GORMAN POMERENK & SCHICK
A PROFESSIONAL CORPORATION
<PAGE>
Exhibit 8.1
June 13, 1996
Board of Directors
Community Bank of
Excelsior Springs, A Savings Bank
1001 N. Jesse James Road
Excelsior Springs, Missouri 64024
RE: FEDERAL INCOME TAX CONSEQUENCES RELATING TO CONVERSION OF THE
BANK FROM A FEDERAL MUTUAL SAVINGS INSTITUTION TO A FEDERAL STOCK
SAVINGS INSTITUTION AND THE ACQUISITION OF THE STOCK
INSTITUTION'S STOCK BY A STOCK HOLDING COMPANY
Gentlemen:
In accordance with your request, set forth herein is the opinion of this
firm relating to the federal income tax consequences of the proposed conversion
("Conversion") of Community Bank of Excelsior Springs, A Savings Bank (the
"Bank") from a federal mutual savings institution to a federal stock savings
institution (the "Stock Bank"), and the formation of a holding company parent to
be known as CBES Bancorp, Inc. (the "Holding Company"), which will acquire all
of the outstanding stock of the Stock Bank.
For purposes of this opinion, we have examined such documents and questions
of law as we have considered necessary or appropriate, including but not limited
to the Plan of Conversion as adopted by the Bank on May 14, 1996 (the "Plan");
the Federal Mutual Charter and Bylaws of the Bank; and the Certificate of
Incorporation and Bylaws of the Holding Company. In such examination, we have
assumed, and have not independently verified, the genuineness of all signatures
on original documents where due execution and delivery are requirements to the
effectiveness thereof. Terms used but not defined herein, whether capitalized or
not, shall have the same meanings as defined in said documents.
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 2
In issuing our opinion, we have assumed that the Plan has been duly and
validly authorized and has been approved and adopted by the board of directors
of the Bank at a meeting duly called and held; that the Bank will comply with
the terms and conditions of the Plan, and that the various representations and
warranties which are provided to us are accurate, complete, true and correct.
Accordingly, we express no opinion concerning the effect, if any, of variations
from the foregoing. We specifically express no opinion concerning tax matters
relating to the Plan under state and local tax laws and under Federal income tax
laws except on the basis of the documents and assumptions described above.
In issuing the opinion set forth below, we have relied solely on existing
provisions of the Internal Revenue Code of 1986, as amended (the "Code");
existing and proposed Treasury Regulations (the "Regulations") thereunder;
current administrative rulings, notices and procedures; and court decisions.
Such laws, regulations, administrative rulings, notices and procedures and court
decisions are subject to change at any time. Any such change could affect the
continuing validity of the opinions set forth below. This opinion is as of the
date hereof, and we disclaim any obligation to advise you of any change in any
matter considered herein after the date hereof.
In rendering our opinion, we have assumed that the persons and entities
identified in the Plan of Conversion will at all times comply with the
requirements of Code Section 368(a)(1)(F), the other applicable state and
Federal laws and the representations of the Bank. In addition, we have assumed
that the activities of the persons and entities identified in the Plan will be
conducted strictly in accordance with the Plan. Any variations may affect the
opinions we are rendering.
For purposes of this opinion, we are relying on the representations
provided to us by the Bank, as set forth below.
REPRESENTATIONS
---------------
1. The Conversion is implemented in accordance with the terms of the Plan
of Conversion (the "Plan") and all conditions precedent contained in the Plan
shall be performed or waived prior to the consummation of the Conversion.
2. The fair market value of the withdrawable deposit accounts plus
interests in the liquidation account ("Liquidation Account") of Stock Bank to be
received under the Plan, in each instance, shall be equal to the fair market
value of the membership interests (i.e.,
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 3
withdrawable deposit accounts, voting and liquidation rights) in the Bank
surrendered in exchange therefor.
3. Holding Company and Stock Bank each have no plan or intention to
redeem or otherwise re-acquire any of the stock issued in the proposed
transaction.
4. To the best of the knowledge of the management of the Bank, there is
no plan or intention by any member of the Bank, who holds more than 1% of the
qualifying deposits in the Bank, and there is no plan or intention on the part
of the remaining members to dispose of their withdrawable deposit accounts in
Stock Bank that would reduce their aggregate interest in the Liquidation Account
as of the Effective Date of the Conversion, to less than 50% of the value of
their interests in the Bank as of the same date.
5. Immediately following the consummation of the proposed transaction,
Stock Bank will possess the same assets and liabilities as the Bank held
immediately prior to the proposed transaction, plus proceeds from the sale of
stock of Stock Bank to Holding Company.
6. Assets used to pay expenses of the Conversion (without reference to
the expenses of the Direct Community Offering) and all distributions (except for
regular normal interest payments and other payments in the normal course of
business made by the Bank immediately preceding the transaction) will in the
aggregate constitute less than one percent (1%) of the net assets of the Bank.
7. Following the proposed transaction, Stock Bank will continue the
historic business of the Bank or use a significant portion of the Bank's
historic business assets in a business.
8. Stock Bank has no plan or intention to sell or otherwise dispose of
any of the assets of the Bank acquired in the proposed transaction, except for
dispositions in the ordinary course of business.
9. There is no plan or intention for Stock Bank to be liquidated or
merged with another corporation following the Conversion.
10. Both Stock Bank and Holding Company have no plan or intention, either
currently or at the time of the Conversion, to issue additional shares of stock
following the proposed transaction, other than shares that may be issued to
employees and/or directors pursuant to certain stock option and stock incentive
plans or that may be issued to employee benefit plans.
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 4
11. Stock Bank has no plan or intention to reacquire any of its stock
issued in the proposed transaction.
12. The Bank is not under the jurisdiction of a court in any Title 11 or
similar case within the meaning of Section 368(a)(3)(A). The proposed
transaction does not involve a receivership, foreclosure, or similar proceeding
before a federal or state agency involving a financial institution to which
Section 585 or 593 of the Code applies.
13. Compensation to be paid to depositor-employees of the Bank, Stock Bank
or Holding Company will be commensurate with amounts paid to third parties
bargaining at arm's length for similar services.
14. No shares of Holding Company Conversion Stock will be issued to or
purchased by depositor-employees of the Bank, Stock Bank or Holding Company at a
discount or as compensation in the proposed transaction.
15. No cash or other property will be given to Eligible Account Holders or
others in lieu of (a) non-transferable subscription rights or (b) an interest in
the Liquidation Account of Stock Bank.
16. Bank utilizes a reserve for bad debts in accordance with Section 593
of the Internal Revenue Code of 1986, as amended (the "Code") and, following the
conversion, Stock Bank shall likewise utilize a reserve for bad debts in
accordance with Section 593 of the Code.
17. At the time of the proposed transaction, the fair market value of the
assets of the Bank on a going concern basis will equal or exceed the amount of
its liabilities to be assumed plus the amount of liabilities to which the
transferred assets are subject. Bank will have a positive regulatory net worth
at the time of the Conversion.
18. Bank, Stock Bank and Holding Company are corporations within the
meaning of Section 7701(a)(3) of the Code. Bank and Stock Bank are domestic
building and loan associations within the meaning of Section 7701(a)(19)(C) of
the Code.
19 Neither Bank nor Stock Bank is an investment company as defined in
Sections 368(a)(2)(F)(iii) and (iv) of the Code.
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 5
20. The exercise price of the subscription rights received by the Bank's
Eligible Account Holders and Supplemental Eligible Account Holders to purchase
Holding Company Stock will be equal to the fair market value of the Holding
Company Conversion Stock at the time of the completion of the proposed
transaction as determined by an independent appraisal.
21. The Bank has received or will receive an opinion from an independent
appraiser to the effect that the subscription rights to be received by Eligible
Account Holders and Supplemental Eligible Account Holders and other eligible
subscribers do not have any ascertainable fair market value.
22. The Bank's savings depositors will pay expenses of the conversion
solely attributable to them, if any. Holding Company and the Bank will pay their
own expenses for the transaction and will not pay any expenses solely
attributable to the savings depositors or to the Holding Company stockholders.
The stockholders of Holding Company will pay the expenses incurred by themselves
in connection with the proposed transaction.
23. The Eligible Account Holders', Supplemental Eligible Account Holders',
and Other Members' proprietary interests in the Bank arise solely by virtue of
the fact that they are account holders in the Bank.
24 No creditors of the Bank or the depositors in their role as creditors,
have taken any steps to enforce their claims against the Bank by instituting
Bankruptcy or other legal proceedings, in either a court or appropriate
regulatory agency, that would eliminate the proprietary interests of the members
prior to the Conversion of the Bank including depositors as equity holders of
the Bank.
25. The liabilities of the Bank assumed by Stock Bank plus the
liabilities, if any, to which the transferred assets are subject were incurred
by the Bank in the ordinary course of its business and are associated with the
assets transferred.
26. Holding Company has no plan or intention to sell or otherwise dispose
of the stock of Stock Bank received by it in the proposed transaction.
27. No amount of deposit accounts or deposits as of the Eligibility Record
Date will be excluded from participation in the Liquidation Account.
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 6
OPINION
-------
Based on the foregoing, and in reliance thereon, and subject to the
conditions stated herein, it is our opinion that the following federal income
tax consequences will result from the proposed Conversion:
1. The change in the form of operation of the Bank from a federal mutual
savings institution to a federal stock savings institution, as
described above, will constitute a reorganization within the meaning
of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as
amended ("Code"), and no gain or loss will be recognized to either the
Bank or to the Stock Bank as a result of such conversion. (See Rev.
Rul. 80-105, 1980-1 C.B. 78). The Bank and the Stock Bank will each be
a party to a reorganization within the meaning of Section 368(b) of
the Code. (Rev. Rul. 72-206, 1972-1 C.B. 104)
2. No gain or loss will be recognized by the Stock Bank on the receipt of
money from the Holding Company in exchange for shares of common stock
of the Stock Bank. (Section 1032(a) of the Code).
3. The Holding Company will recognize no gain or loss upon receipt of
money from stockholders in exchange for shares of Holding Company
Conversion Stock. (Section 1032(a) of the Code).
4. The assets of the Bank will have the same basis in the hands of the
Stock Bank as in the hands of the Bank immediately prior to the
Conversion. (Section 362(b) of the Code).
5. The holding period of the assets of the Bank to be received by the
Stock Bank will include the period during which the assets were held
by the Bank prior to the Conversion. (Section 1223(2) of the Code).
6. No gain or loss will be recognized by the depositors of the Bank upon
the issuance to them of withdrawable deposit accounts in the Stock
Bank in the same dollar amount as their deposit accounts in the Bank
plus an interest in the Liquidation Account of the Stock Bank, as
described above,
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 7
in exchange for their deposit accounts in the Bank. (Section 354(a) of
the Code).
7. The basis of the depositors' deposit accounts in the Stock Bank
received by the depositors of the Bank will be the same as the basis
of their deposit accounts in the Bank surrendered in exchange
therefor. The basis of each account holder's interests in the
Liquidation Account of the Stock Bank received by the depositors will
be zero, that being the cost of such property. The basis of the non-
transferable subscription rights will be zero, provided that such
subscription rights are not deemed to have a fair market value and
that the subscription price of such stock issuable upon exercise of
such rights is equal to the fair market value of such stock. The basis
of the Holding Company Conversion Stock to its stockholders will be
the purchase price thereof, increased by the basis, if any, of the
subscription rights exercised. (Section 1012 of the Code). The
stockholder's holding period will commence upon the exercise of the
subscription rights. (Section 1223(6) of the Code).
8. Provided that the amount to be paid for Holding Company Stock pursuant
to the exercise of subscription rights is equal to the fair market
value of such Common Stock, no gain or loss will be recognized by
depositors under the Plan upon the distribution to them of non-
transferable subscription rights to purchase shares of Holding Company
Conversion Stock. (Rev. Rul. 56-572, 1956-2 C.B. 234).
9. For purposes of Section 381 of the Code, the Stock Bank will be
treated as if there had been no reorganization. Accordingly, the
taxable year of the Bank will not end on the effective date of the
Conversion merely because of the transfer of assets of the Bank to the
Stock Bank, and the tax attributes of the Bank will be taken into
account by the Stock Bank as if there had been no reorganization.
(Treas. Reg. (S)1.381(b)-(1)(a)(2)).
10. The part of the taxable year of the Bank before the reorganization and
the part of the taxable year of the Stock Bank after the
reorganization will constitute a single taxable year of the Stock
Bank. (Treas. Reg. (S)1.381(b)-1(a)(2); Rev. Rul. 57-276, 1957-1 C.B.
126).
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 8
11. Pursuant to the provisions of Section 381(c)(4) of the Code and Treas.
Reg. Section 1.381(c)(4)-1(a)(1)(ii), the Stock Bank will succeed to
and take into account, immediately after the reorganization, those
accounts of the Bank which represent bad debt reserves in respect of
which the Bank has taken a bad debt deduction for taxable years ending
on or before the date of the transfer. The bad debt reserves will not
be required to be restored to the gross income of either the Bank or
the Stock Bank for the taxable year of the transfer, and such bad debt
reserves will have the same character in the hands of the Stock Bank
as they would have had in the hands of the Bank if no distribution or
transfer had occurred. (Section 593(e) of the Code).
12. Regardless of any book entries that are made for the establishment of
the Liquidation Account, the Conversion, as described above, will not
diminish the accumulated earnings and profits of the Stock Bank
available for the subsequent distribution of dividends within the
meaning of Section 316 of the Code. (Treas. Reg. (S)1.312-11(b) and
(c)). The creation of the Liquidation Account on the records of the
Stock Bank will have no effect on its taxable income, deductions for
additions to reserves for bad debts under Section 593 of the Code, or
distributions to stockholders under Section 593(e) of the Code. (Rev.
Rul. 68-475, 1968-2 C.B. 259).
13. A shareholder's holding period for Holding Company Conversion Stock
acquired through the exercise of the Subscription Rights shall begin
on the date on which the Subscription Rights are exercised. (Section
1223(6) of the Code.) The holding period for the Holding Company
Conversion Stock purchased pursuant to the Community Offering or
Public Offering or under other purchase arrangements will commence on
the date following the date on which such stock is purchased. (Rev.
Rul. 70-598, 1970-2 C.B. 168).
SCOPE OF OPINION
----------------
Our opinion is limited to the federal income tax matters described above
and does not address any other federal income tax considerations or any federal,
state, local, foreign or other tax considerations. If any of the information on
which we have relied is incorrect, or if changes in the relevant facts occur
after the date hereof, our opinion could be affected thereby.
<PAGE>
Board of Directors
Community Bank of
Excelsior Springs,
June 13, 1996
Page 9
Moreover, our opinion is based on the case law, Code, Treasury Regulations
thereunder and Internal Revenue Service rulings as they now exist. These
authorities are all subject to change, and such change may be made with
retroactive effect. We can give no assurance that, after such change, our
opinion would not be different. We undertake no responsibility to update or
supplement our opinion. This opinion is not binding on the Internal Revenue
Service and there can be no assurance, and none is hereby given, that the
Internal Revenue Service will not take a position contrary to one or more of the
positions reflected in the foregoing opinion, or that our opinion will be upheld
by the courts if challenged by the Internal Revenue Service.
CONSENT
-------
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-1 or other applicable form ("Registration
Statement") of the Holding Company filed with the Securities and Exchange
Commission with respect to the Conversion and as an exhibit to the application
for Conversion on Form AC ("Form AC") of the Bank filed with the OTS with
respect to the Conversion. We also hereby consent to the references to this firm
in the prospectus which is a part of both the Registration Statement and the
Form AC.
USE OF OPINION
--------------
This opinion is rendered solely for the benefit of the Holding Company, the
Bank and prospective investors in connection with the proposed transactions
described herein and is not to be relied upon or used for any other purpose
without our prior written consent.
Very truly yours,
LUSE LEHMAN GORMAN POMERENK & SCHICK
A Professional Corporation
<PAGE>
Exhibit 8.3
[LETTERHEAD OF RP FINANCIAL]
June 14, 1996
Board of Directors
Community Bank of Excelsior Springs, A Savings Bank
1001 N. Jesse James Road
Excelsior Springs, Missouri 64024
Re: Plan of Conversion: Subscription Rights
Community Bank of Excelsior Springs, A Savings Bank
Gentlemen:
All capitalized terms not otherwise defined in this letter have the
meanings given such terms in the Plan of Conversion adopted by the Board of
Directors of Community Bank of Excelsior Springs, A Savings Bank (the "Bank")
whereby the Bank will convert from a federally chartered mutual savings bank to
a federally chartered stock savings bank and issue all of the Bank's outstanding
capital stock to CBES Bancorp, Inc. (the "Holding Company"). Simultaneously, the
Holding Company will issue shares of common stock.
We understand that in accordance with the Plan of Conversion, Subscription
Rights to purchase shares of Common Stock in the Holding Company are to be
issued to: (1) Eligible Account Holders; (2) the ESOP; (3) Supplemental Eligible
Account Holders; and (4) Other Members. Based solely upon our observation that
the Subscription Rights will be available to such parties without cost, will be
legally non-transferable and of short duration, and will afford such parties the
right only to purchase shares of Common Stock at the same price as will be paid
by members of the general public in the Community Offering, but without
undertaking any independent investigation of state or federal law or the
position of the Internal Revenue Service with respect to this issue, we are of
the belief that, pursuant to our valuation of the Subscription Rights:
(1) the Subscription Rights will have no ascertainable market value; and,
(2) the price at which the Subscription Rights are exercisable will not be
more or less than the pro forma market value of the shares upon
issuance.
Changes in the local and national economy, the legislative and regulatory
environment, the stock market, interest rates, and other external forces (such
as natural disasters or significant world events) may occur from time to time,
often with great unpredictability and may materially impact the value of thrift
stocks as a whole or the Holding Company's value alone. Accordingly, no
assurance can be given that persons who subscribe to shares of common stock in
the conversion will thereafter be able to buy or sell such shares at the same
price paid in the Subscription Offering.
Sincerely,
/S/ Ronald S. Riggin
Ronald S. Riggins
President
<PAGE>
Exhibit 10.1
CBES BANCORP, INC.
1996 STOCK OPTION AND INCENTIVE PLAN
1. PLAN PURPOSE.
The purpose of the Plan is to promote the long-term interests of the
Corporation and its stockholders by providing a means for attracting and
retaining directors, advisory directors, directors emeriti, officers and
employees of the Corporation and its Affiliates. It is intended that designated
Options granted pursuant to the provisions of this Plan to persons employed by
the Corporation or its Affiliates will qualify as Incentive Stock Options.
Options granted to persons who are not employees will be Non-Qualified Stock
Options.
2. DEFINITIONS.
The following definitions are applicable to the Plan:
"AFFILIATE" - means any "parent corporation" or "subsidiary
corporation" of the Corporation, as such terms are defined in Section 424(e) and
(f), respectively, of the Code.
"BANK" - means Community Bank of Excelsior Springs, a Savings Bank,
and any successor entity.
"AWARD" - means the grant of an Incentive Stock Option, a Non-
Qualified Stock Option, a Stock Appreciation Right, a Limited Stock Appreciation
Right or any combination thereof, as provided in the Plan.
"CODE" - means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" - means the Committee referred to in Section 3 hereof.
"CONTINUOUS SERVICE" - means the absence of any interruption or
termination of service as a director, advisory director, director emeritus,
officer or employee of the Corporation or an Affiliate, except that when used
with respect to persons granted an Incentive Option means the absence of any
interruption or termination of service as an employee of the Corporation or an
Affiliate. Service shall not be considered interrupted in the case of sick
leave, military leave or any other leave of absence approved by the Corporation
or in the case of transfers between payroll locations of the Corporation or
between the Corporation, its parent, its subsidiaries or its successor. With
respect to any advisory director or director emeritus, continuous service shall
mean availability to perform such functions as may be required of such persons.
"CORPORATION" - means CBES Bancorp, Inc., a Delaware corporation.
"DISABILITY" - means the permanent and total inability by reason of
mental or physical infirmity, or both, of an employee to perform the work
customarily assigned to him. Additionally, a medical doctor selected or approved
by the Board must advise the committee that it is either not possible to
determine where such Disability will terminate or that it appears probable that
such Disability will be permanent during the remainder of said Participant's
lifetime.
"DISINTERESTED PERSON" - means any member of the Board of Directors of
the Corporation who (A) is an outside director as defined under Section 162(m)
of the Code and the regulations thereunder and (B) a person who within the prior
year has not been, and is not being, granted any awards related to the Shares
under this Plan or any other plan of the Corporation or any of its Affiliates
except for awards which (i) are calculated in accordance with a formula as
contemplated in paragraph (c)(2)(ii) of Rule 16b-3 ("Rule 16b-3") under the
Securities Exchange Act of 1934; (ii) result from participation in an ongoing
securities acquisition plan meeting the conditions of paragraph (d)(2) of Rule
16b-3; or (iii) arise from an election by a director to receive all or part of
his board fees in securities. No recipient of a stock award granted pursuant to
Section 19 hereof shall be deemed not to be a Disinterested Person solely by
reason of such grant.
<PAGE>
"EMPLOYEE" - means any person, including an officer or director, who
is employed by the Corporation or any Affiliate.
"ERISA" - means the Employee Retirement Income Security Act of 1974,
as amended.
"EXERCISE PRICE" - means (i) in the case of an Option, the price per
Share at which the Shares subject to such Option may be purchased upon exercise
of such Option and (ii) in the case of a Right, the price per Share (other than
the Market Value per Share on the date of exercise and the Offer Price per Share
as defined in Section 10 hereof) which, upon grant, the Committee determines
shall be utilized in calculating the aggregate value which a Participant shall
be entitled to receive pursuant to Sections 9, 10 or 12 hereof upon exercise of
such Right.
"INCENTIVE STOCK OPTION" - means an option to purchase Shares granted
by the Committee pursuant to Section 6 hereof which is subject to the
limitations and restrictions of Section 8 hereof and is intended to qualify
under Section 422 of the Code.
"LIMITED STOCK APPRECIATION RIGHT" - means a stock appreciation right
with respect to Shares granted by the Committee pursuant to Sections 6 and 10
hereof.
"MARKET VALUE" - means the average of the high and low quoted sales
price on the date in question (or, if there is no reported sale on such date, on
the last preceding date on which any reported sale occurred) of a Share on the
Composite Tape for the New York Stock Exchange-Listed Stocks, or, if on such
date the Shares are not quoted on the Composite Tape, on the New York Stock
Exchange, or, if the Shares are not listed or admitted to trading on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which the Shares are listed or admitted
to trading, or, if the Shares are not listed or admitted to trading on any such
exchange, the mean between the closing high bid and low asked quotations with
respect to a Share on such date on the NASDAQ System, or any similar system then
in use, or, if no such quotations are available, the fair market value on such
date of a Share as the Committee shall reasonably determine.
"NON-QUALIFIED STOCK OPTION" - means an option to purchase Shares
granted by the Committee pursuant to Section 6 hereof, which option is not
intended to qualify under Section 422(b) of the Code.
"OPTION" - means an Incentive Stock Option or a Non-Qualified Stock
Option.
"PARTICIPANT" - means any officer or employee of the Corporation or
any Affiliate who is selected by the Committee to receive an Award and any
director, advisory director or director emeritus of the Corporation who is
granted an Award pursuant to Section 19 hereof.
"PLAN" - means the 1996 Stock Option and Incentive Plan of the
Corporation.
"RELATED" - means (i) in the case of a Right, a Right which is granted
in connection with, and to the extent exercisable, in whole or in part, in lieu
of, an Option or another Right and (ii) in the case of an Option, an Option with
respect to which and to the extent a Right is exercisable, in whole or in part,
in lieu thereof has been granted.
"RIGHT" - means a Limited Stock Appreciation Right or a Stock
Appreciation Right.
"SHARES" - means the shares of common stock of the Corporation.
"STOCK APPRECIATION RIGHT" - means a stock appreciation right with
respect to Shares granted by the Committee pursuant to Sections 6 and 9 hereof.
3. ADMINISTRATION.
The Plan shall be administered by a Committee consisting of two or
more members, each of whom shall be a Disinterested Person. The members of the
Committee shall be appointed by the Board of Directors of the
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<PAGE>
Corporation. Except as limited by the express provisions of the Plan, the
Committee shall have sole and complete authority and discretion, subject to
Office of Thrift Supervision Regulations, to (i) select Participants and grant
Awards; (ii) determine the number of Shares to be subject to types of Awards
generally, as well as to individual Awards granted under the Plan; (iii)
determine the terms and conditions upon which Awards shall be granted under the
Plan; (iv) describe the form and terms of instruments evidencing such grants;
and (v) establish from time to time regulations for the administration of the
Plan, interpret the Plan, and make all determinations deemed necessary or
advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of
a majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by a majority of the Committee without a meeting,
shall be acts of the Committee.
4. PARTICIPATION IN COMMITTEE AWARDS.
The Committee may select from time to time Participants in the Plan
from those directors, advisory directors, directors emeriti, officers and
employees (other than Disinterested Persons), of the Corporation or its
Affiliates who, in the opinion of the Committee, have the capacity for
contributing to the successful performance of the Corporation or its Affiliates.
5. SHARES SUBJECT TO PLAN.
Subject to adjustment by the operation of Section 11 hereof, the
maximum number of Shares with respect to which Awards may be made under the Plan
is 10% of the total Shares issued in the Bank's conversion to the capital stock
form. The Shares with respect to which Awards may be made under the Plan may be
either authorized and unissued shares or issued shares heretofore or hereafter
reacquired and held as treasury shares. Shares which are subject to Related
Rights and Related Options shall be counted only once in determining whether the
maximum number of Shares with respect to which Awards may be granted under the
Plan has been exceeded. An Award shall not be considered to have been made under
the Plan with respect to any Option or Right which terminates and new Awards may
be granted under the Plan with respect to the number of Shares as to which such
termination has occurred.
6. GENERAL TERMS AND CONDITIONS OF OPTIONS AND RIGHTS.
The Committee shall have full and complete authority and discretion,
subject to Office of Thrift Supervision Regulations and except as expressly
limited by the Plan, to grant Options and/or Rights and to provide the terms and
conditions (which need not be identical among Participants) thereof. In
particular, the Committee shall prescribe the following terms and conditions:
(i) the Exercise Price of any Option or Right, which shall not be less than the
Market Value per Share at the date of grant of such Option or Right, (ii) the
number of Shares subject to, and the expiration date of, any Option or Right,
which expiration date shall not exceed ten years from the date of grant, (iii)
the manner, time and rate (cumulative or otherwise) of exercise of such Option
or Right, and (iv) the restrictions, if any, to be placed upon such Option or
Right or upon Shares which may be issued upon exercise of such Option or Right.
Notwithstanding the foregoing and subject to compliance with applicable Office
of Thrift Supervision Regulations, no individual shall be granted Awards with
respect to more than 25% of the total shares subject to the Plan, and no
director who is not an employee of the Corporation or the Association shall be
granted Awards with respect to more than 5% of the total Shares subject to the
Plan. All non-employee directors of the Corporation, in the aggregate, may not
be granted Awards with respect to more than 30% of the total Shares subject to
the Plan. No Awards shall begin vesting earlier than one year from the date the
Plan is approved by stockholders of the Corporation and no awards shall vest at
a rate in excess of 20% per year beginning from the date of grant.
In the event Office of Thrift Supervision Regulations are amended (the
"Amended Regulations") to permit shorter vesting periods, any Award made
pursuant to this Plan which Award is subject to the requirements of such Amended
Regulations, may vest, at the sole discretion of the Committee, in accordance
with such Amended Regulations.
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<PAGE>
Furthermore, at the time of any Award, the Participant shall enter
into an agreement with the Corporation in a form specified by the Committee,
agreeing to the terms and conditions of the Award and such other matters as the
Committee, in its sole discretion, shall determine (the "Option Agreement").
7. EXERCISE OF OPTIONS OR RIGHTS.
(a) Except as provided herein, an Option or Right granted under the
Plan shall be exercisable during the lifetime of the Participant
to whom such Option or Right was granted only by such Participant
and, except as provided in paragraphs (c) and (d) of this Section
7, no such Option or Right may be exercised unless at the time
such Participant exercises such Option or Right, such Participant
has maintained Continuous Service since the date of grant of such
Option or Right. Cash settlements of Rights may be made only in
accordance with any applicable restrictions pursuant to Rule 16b-
3(e) under the Securities Exchange Act of 1934 or any similar or
successor provision.
(b) To exercise an Option or Right under the Plan, the Participant to
whom such Option or Right was granted shall give written notice
to the Corporation in form satisfactory to the Committee (and, if
partial exercises have been permitted by the Committee, by
specifying the number of Shares with respect to which such
Participant elects to exercise such Option or Right) together
with full payment of the Exercise Price, if any and to the extent
required. The date of exercise shall be the date on which such
notice is received by the Corporation. Payment, if any is
required, shall be made either (i) in cash (including check, bank
draft or money order) or (ii) if permitted by the Committee, by
delivering (A) Shares already owned by the Participant and having
a fair market value equal to the applicable exercise price, such
fair market value to be determined in such appropriate manner as
may be provided by the Committee or as may be required in order
to comply with or to conform to requirements of any applicable
laws or regulations, or (B) a combination of cash and such
Shares.
(c) If a Participant to whom an Option or Right was granted shall
cease to maintain Continuous Service for any reason (excluding
death or Disability and termination of employment by the
Corporation or any Affiliate for cause), such Participant may,
but only within the period of three months immediately succeeding
such cessation of Continuous Service and in no event after the
expiration date of such Option or Right, exercise such Option or
Right to the extent that such Participant was entitled to
exercise such Option or Right at the date of such cessation,
provided, however, that such right of exercise shall not be
available to a Participant if the Committee otherwise determines
and so provides in the applicable instrument or instruments
evidencing the grant of such Option or Right. If a Participant to
whom an Option or Right was granted shall cease to maintain
Continuous Service by reason of death or Disability then, unless
the Committee shall have otherwise provided in the instrument
evidencing the grant of an Option or Right, all Options and
Rights granted, whether or not fully exercisable, shall become
exercisable in full upon the happening of such event and shall
remain so exercisable (i) in the event of death for the period
described in paragraph (d) of this Section 7 and (ii) in the
event of Disability for a period of one year following such date.
If the Continuous Service of a Participant to whom an Option or
Right was granted by the Corporation is terminated for cause, all
rights under any Option or Right of such Participant shall expire
immediately upon the effective date of such termination.
(d) In the event of the death of a Participant while in the
Continuous Service of the Corporation or an Affiliate or within
the three-month period referred to in paragraph (c) of this
Section 7, the person to whom any Option or Right held by the
Participant at the time of his death is transferred by will or
the laws of descent and distribution, or in the case of an Award
other than an Incentive Stock Option, pursuant to a qualified
domestic relations order, as defined in the Code or Title 1 of
ERISA or the rules thereunder may, but only to the extent such
Participant was entitled to exercise such Option or Right
immediately prior to his death, exercise such Option or Right at
any time within a period of one year succeeding the date of death
of such
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<PAGE>
Participant, but in no event later than ten years from the date
of grant of such Option or Right. Following the death of any
Participant to whom an Option was granted under the Plan,
irrespective of whether any Related Right shall have theretofore
been granted to the Participant or whether the person entitled to
exercise such Related Right desires to do so, the Committee may,
as an alternative means of settlement of such Option, elect to
pay to the person to whom such Option is transferred by will or
by the laws of descent and distribution, or in the case of an
Option other than an Incentive Stock Option, pursuant to a
qualified domestic relations order, as defined in the Code or
Title I of ERISA or the rules thereunder, the amount by which the
Market Value per Share on the date of exercise of such Option
shall exceed the Exercise Price of such Option, multiplied by the
number of Shares with respect to which such Option is properly
exercised. Any such settlement of an Option shall be considered
an exercise of such Option for all purposes of the Plan.
(e) Notwithstanding the provisions of subparagraphs (c) and (d)
above, the Committee may, in its sole discretion, establish
different terms and conditions pertaining to the effect of
termination to the extent permitted by applicable federal and
state law.
8. INCENTIVE STOCK OPTIONS.
Incentive Stock Options may be granted only to Participants who are
Employees. Any provision of the Plan to the contrary notwithstanding, (i) no
Incentive Stock Option shall be granted more than ten years from the date the
Plan is adopted by the Board of Directors of the Corporation and no Incentive
Stock Option shall be exercisable more than ten years from the date such
Incentive Stock Option is granted, (ii) the Exercise Price of any Incentive
Stock Option shall not be less than the Market Value per Share on the date such
Incentive Stock Option is granted, (iii) any Incentive Stock Option shall not be
transferable by the Participant to whom such Incentive Stock Option is granted
other than by will or the laws of descent and distribution, and shall be
exercisable during such Participant's lifetime only by such Participant, (iv) no
Incentive Stock Option shall be granted to any individual who, at the time such
Incentive Stock Option is granted, owns stock possessing more than ten percent
of the total combined voting power of all classes of stock of the Corporation or
any Affiliate unless the Exercise Price of such Incentive Stock Option is at
least 110 percent of the Market Value per Share at the date of grant and such
Incentive Stock Option is not exercisable after the expiration of five years
from the date such Incentive Stock Option is granted, and (v) the aggregate
Market Value (determined as of the time any Incentive Stock Option is granted)
of the Shares with respect to which Incentive Stock Options are exercisable for
the first time by a Participant in any calendar year shall not exceed $100,000.
9. STOCK APPRECIATION RIGHTS.
A Stock Appreciation Right shall, upon its exercise, entitle the
Participant to whom such Stock Appreciation Right was granted to receive a
number of Shares or cash or combination thereof, as the Committee in its
discretion shall determine, the aggregate value of which (i.e., the sum of the
amount of cash and/or Market Value of such Shares on date of exercise) shall
equal (as nearly as possible, it being understood that the Corporation shall not
issue any fractional shares) the amount by which the Market Value per Share on
the date of such exercise shall exceed the Exercise Price of such Stock
Appreciation Right, multiplied by the number of Shares with respect of which
such Stock Appreciation Right shall have been exercised. A Stock Appreciation
Right may be Related to an Option or may be granted independently of any Option
as the Committee shall from time to time in each case determine. At the time of
grant of an Option the Committee shall determine whether and to what extent a
Related Stock Appreciation Right shall be granted with respect thereto;
provided, however, and notwithstanding any other provision of the Plan, that if
the Related Option is an Incentive Stock Option, the Related Stock Appreciation
Right shall satisfy all the restrictions and limitations of Section 8 hereof as
if such Related Stock Appreciation Right were an Incentive Stock Option and as
if other rights which are Related to Incentive Stock Options were Incentive
Stock Options. In the case of a Related Option, such Related Option shall cease
to be exercisable to the extent of the Shares with respect to which the Related
Stock Appreciation Right was exercised. Upon the exercise or termination of a
Related Option, any Related Stock Appreciation Right shall terminate to the
extent of the Shares with respect to which the Related Option was exercised or
terminated.
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<PAGE>
10. LIMITED STOCK APPRECIATION RIGHTS.
At the time of grant of an Option or Stock Appreciation Right to any
Participant, the Committee shall have full and complete authority and discretion
to also grant to such Participant a Limited Stock Appreciation Right which is
Related to such Option or Stock Appreciation Right; provided, however and
notwithstanding any other provision of the Plan, that if the Related Option is
an Incentive Stock Option, the Related Limited Stock Appreciation Right shall
satisfy all the restrictions and limitations of Section 8 hereof as if such
Related Limited Stock Appreciation Right were an Incentive Stock Option and as
if all other Rights which are Related to Incentive Stock Options were Incentive
Stock Options. Subject to vesting requirements contained in 12 C.F.R. (S)
563b.3(g)(4) or any successor regulation, a Limited Stock Appreciation Right
shall be exercisable only during the period beginning on the first day
following the date of expiration of any "offer" (as such term is hereinafter
defined) and ending on the forty-fifth day following such date.
A Limited Stock Appreciation Right shall, upon its exercise, entitle
the Participant to whom such Limited Stock Appreciation Right was granted to
receive an amount of cash equal to the amount by which the "Offer Price per
Share" (as such term is hereinafter defined) or the Market Value on the date of
such exercise, as shall have been provided by the Committee in its discretion at
the time of grant, shall exceed the Exercise Price of such Limited Stock
Appreciation Right, multiplied by the number of Shares with respect to which
such Limited Stock Appreciation Right shall have been exercised. Upon the
exercise of a Limited Stock Appreciation Right, any Related Option and/or
Related Stock Appreciation Right shall cease to be exercisable to the extent of
the Shares with respect to which such Limited Stock Appreciation Right was
exercised. Upon the exercise or termination of a Related Option or Related
Stock Appreciation Right, any Related Limited Stock Appreciation Right shall
terminate to the extent of the Shares with respect to which such Related Option
or Related Stock Appreciation Right was exercised or terminated.
For the purposes of this Section 10, the term "Offer" shall mean any
tender offer or exchange offer for Shares other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires pursuant to such offer either (i) 25% of the Shares outstanding
immediately prior to the commencement of such offer or (ii) a number of Shares
which, together with all other Shares acquired in any tender offer or exchange
offer (other than one made by the Corporation) which expired within sixty days
of the expiration date of the offer in question, equals 25% of the Shares
outstanding immediately prior to the commencement of the offer in question. The
term "Offer Price per Share" as used in this Section 10 shall mean the highest
price per Share paid in any Offer which Offer is in effect any time during the
period beginning on the sixtieth day prior to the date on which a Limited Stock
Appreciation Right is exercised and ending on the date on which such Limited
Stock Appreciation Right is exercised. Any securities or property which are part
or all of the consideration paid for Shares in the Offer shall be valued in
determining the Offer Price per Share at the higher of (A) the valuation placed
on such securities or property by the corporation, person or other entity making
such Offer or (B) the reasonable valuation placed on such securities or property
by the Committee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of any change in the outstanding Shares subsequent to the
effective date of the Plan by reason of any reorganization, recapitalization,
stock split, stock dividend, pro rata return of capital to all shareholders,
combination or exchange of shares, merger, consolidation or any change in the
corporate structure or Shares of the Corporation, the maximum aggregate number
and class of shares as to which Awards may be granted under the Plan and the
number, class and exercise price of shares with respect to which Awards have
been granted under the Plan shall be appropriately adjusted by the Committee,
whose determination shall be conclusive; provided, however, that no such
adjustments may be made which will change materially the value of benefits
available to a Participant under a previously granted Award.
12. EFFECT OF MERGER.
In the event of any merger, consolidation or combination of the
Corporation (other than a merger, consolidation or combination in which the
Corporation is the continuing entity and which does not result in the
outstanding Shares being converted into or exchanged for different securities,
cash or other property, or any
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combination thereof) pursuant to a plan or agreement the terms of which are
binding upon all stockholders of the Corporation (except to the extent that
dissenting stockholders may be entitled, under statutory provisions or
provisions contained in the certificate of incorporation, to receive the
appraised or fair value of their holdings), any Participant to whom an Option or
Right has been granted at least six months prior to such event shall have the
right (subject to the provisions of the Plan and any limitation or vesting
period applicable to such Option or Right), thereafter and during the term of
each such Option or Right, to receive upon exercise of any such Option or Right
an amount equal to the excess of the fair market value on the date of such
exercise of the securities, cash or other property, or combination thereof,
receivable upon such merger, consolidation or combination in respect of a Share
over the Exercise Price of such Right or Option, multiplied by the number of
Shares with respect to which such Option or Right shall have been exercised.
Such amount may be payable fully in cash, fully in one or more of the kind or
kinds of property payable in such merger, consolidation or combination, or
partly in cash and partly in one or more of such kind or kinds of property, all
in the discretion of the Committee.
13. ASSIGNMENTS AND TRANSFERS.
No Award nor any right or interest of a Participant under the Plan in
any instrument evidencing any Award under the Plan may be assigned, encumbered
or transferred except, in the event of the death of a Participant, by will or
the laws of descent and distribution or in the case of Awards other than
Incentive Stock Options pursuant to a qualified domestic relations order, as
defined in the Code or Title I of ERISA or the rules thereunder.
14. EMPLOYEE RIGHTS UNDER THE PLAN.
No director, officer or employee shall have a right to be selected as
a Participant nor, having been so selected, to be selected again as a
Participant and no director, officer, employee or other person shall have any
claim or right to be granted an Award under the Plan or under any other
incentive or similar plan of the Corporation or any Affiliate. Neither the Plan
nor any action taken thereunder shall be construed as giving any employee any
right to be retained in the employ of the Corporation or any Affiliate.
15. DELIVERY AND REGISTRATION OF STOCK.
The Corporation's obligation to deliver Shares with respect to an
Award shall, if the Committee so requests, be conditioned upon the receipt of a
representation as to the investment intention of the Participant to whom such
Shares are to be delivered, in such form as the Committee shall determine to be
necessary or advisable to comply with the provisions of the Securities Act of
1933 or any other Federal, state or local securities legislation or regulation.
It may be provided that any representation requirement shall become inoperative
upon a registration of the Shares or other action eliminating the necessity of
such representation under such Securities Act or other securities legislation.
The Corporation shall not be required to deliver any Shares under the Plan prior
to (i) the admission of such shares to listing on any stock exchange or other
system on which Shares may then be listed, and (ii) the completion of such
registration or other qualification of such Shares under any state or Federal
law, rule or regulation, as the Committee shall determine to be necessary or
advisable.
This Plan is intended to comply with Rule 16b-3 under the Securities
Exchange Act of 1934. Any provision of the Plan which is inconsistent with said
Rule shall, to the extent of such inconsistency, be inoperative and shall not
affect the validity of the remaining provisions of the Plan.
16. WITHHOLDING TAX.
The Corporation shall have the right to deduct from all amounts paid
in cash with respect to the exercise of a Right under the Plan any taxes
required by law to be withheld with respect to such cash payments. Where a
Participant or other person is entitled to receive Shares pursuant to the
exercise of an Option or Right pursuant to the Plan, the Corporation shall have
the right to require the Participant or such other person to pay the Corporation
the amount of any taxes which the Corporation is required to withhold with
respect to such Shares, and may, in its sole discretion, withhold sufficient
Shares to cover the amount of taxes which the Corporation is required to
withhold.
A-7
<PAGE>
17. AMENDMENT OR TERMINATION.
The Board of Directors of the Corporation may amend, suspend or
terminate the Plan or any portion thereof at any time, subject to Office of
Thrift Supervision Regulations, but (except as provided in Section 11 hereof) no
amendment shall be made without approval of the stockholders of the Corporation
which shall, (i) increase the aggregate number of Shares with respect to which
Awards may be made under the Plan (except pursuant to Section 11), (ii)
materially increase the benefits accruing to Participants, (iii) materially
change the requirements as to eligibility for participation in the Plan or (iv)
change the class of persons eligible to participate in the Plan, provided,
however, that no such amendment, suspension or termination shall impair the
rights of any Participant, without his consent, in any Award made pursuant to
the Plan.
Notwithstanding anything else in this Plan to the contrary, to the
extent that the Plan provides for formula awards, as defined in Rule 16b-
3(c)(2)(ii) under the Securities Exchange Act of 1934, such provisions may not
be amended more than once every six months, other than to comport with changes
in the Code, ERISA or the rules thereunder.
18. EFFECTIVE DATE AND TERM OF PLAN.
The Plan shall become effective upon its ratification by stockholders
of the Corporation, which shall not occur prior to six months following the
effective date of the Bank's Conversion from mutual to stock form. It shall
continue in effect for a term of ten years unless sooner terminated under
Section 17 hereof.
19. INITIAL GRANT.
By, and simultaneously with, the ratification of this Plan by the
stockholders of the Corporation, each member of the Board of Directors of the
Corporation and each advisory director and director emeritus of the Corporation
at the time of stockholder ratification of this Plan, who is not an Employee, is
hereby granted a ten-year, Non-Qualified Stock Option to purchase _____ shares
at an Exercise Price per share equal to the Market Value per share of the Shares
on the date of grant. In addition, subject to availability, each non-employee
director of the Corporation elected subsequent to the date of stockholder
ratification of the Plan is hereby granted, as of the date he or she is elected
and qualified a ten-year Non-Qualified Stock Option to purchase _____ shares at
an Exercise Price equal to the Market Value per share of the Shares on the date
of grant. Each such Option shall be evidenced by a Non-Qualified Stock Option
Agreement in a form approved by the Board of Directors and shall be subject in
all respects to the terms and conditions of this Plan, which are controlling.
All Options granted pursuant to this section shall vest in five equal annual
installments with the first installment vesting on the first anniversary of the
date of grant, subject to the director maintaining Continuous Service with the
Corporation or its Affiliates since the date of grant.
A-8
<PAGE>
Exhibit 10.2
CBES BANCORP, INC.
RECOGNITION AND RETENTION PLAN
1. PLAN PURPOSE.
The purpose of the Plan is to promote the long-term interests of the
Corporation and its stockholders by providing a means for attracting and
retaining directors and officers of the Corporation and its Affiliates.
2. DEFINITIONS.
The following definitions are applicable to the Plan:
"AWARD" - means the grant by the Committee of Restricted Stock, as provided
in the Plan.
"AFFILIATE" - means any "parent corporation" or "subsidiary corporation" of
the Corporation, as such terms are defined in Section 424(e) and (f),
respectively, of the Code.
"BANK" - means Community Bank of Excelsior Springs, a Savings Bank, a
capital stock savings institution and its predecessors and successors.
"CODE" - means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" - means the Committee referred to in Section 6 hereof.
"CONTINUOUS SERVICE" - means the absence of any interruption or termination
of service as a director, advisory director, director emeritus, officer or
employee of the Corporation or any Affiliate. Service shall not be considered
interrupted in the case of sick leave, military leave or any other leave of
absence approved by the Corporation or any Affiliate or in the case of transfers
between payroll locations of the Corporation or between the Corporation, its
subsidiaries or its successor. With respect to any advisory director or director
emeritus, continuous service shall mean availability to perform such functions
as may be required of such persons.
"CORPORATION" - means CBES Bancorp, Inc., a Delaware corporation.
"DISABILITY" - means the permanent and total inability by reason of mental
or physical infirmity, or both, of an employee to perform the work customarily
assigned to him. Additionally, a medical doctor selected or approved by the
Board must advise the committee that it is either not possible to determine
where such Disability will terminate or that it appears probable that such
Disability will be permanent during the remainder of said Participant's
lifetime.
"DISINTERESTED PERSON" - means any member of the Board of Directors of the
Corporation who is not being and within the prior year has not been, granted any
awards related to the shares under this Plan or any other plan of the
Corporation or any of its Affiliates except for awards which (I) are calculated
in accordance with a formula as contemplated in paragraph (c)(2)(ii) of Rule 16-
3 ("Rule 16b-3") under the Securities Exchange Act of 1934, as amended; (ii)
result from participation in an ongoing securities acquisition plan meeting the
conditions of paragraph (d)(2) of Rule 16b-3; or (iii) arise from an election by
a director to receive all or part of his board fees in securities.
"ERISA" - means the Employee Retirement Income Security Act of 1974, as
amended.
"PARTICIPANT" - means any director, officer or employee of the Corporation
or any Affiliate who is selected by the Committee to receive an Award and any
director, advisory director or director emeritus of the Corporation who is
granted an Award pursuant to Section 12 hereof.
"PLAN" - means the Recognition and Retention Plan of the Corporation.
<PAGE>
"RESTRICTED PERIOD" - means the period of time selected by the Committee
for the purpose of determining when restrictions are in effect under Section 3
hereof with respect to Restricted Stock awarded under the Plan.
"RESTRICTED STOCK" - means Shares which have been contingently awarded to a
Participant by the Committee subject to the restrictions referred to in Section
3 hereof, so long as such restrictions are in effect.
"SHARES" - means the common stock, par value $0.01 per share, of the
Corporation.
3. TERMS AND CONDITIONS OF RESTRICTED STOCK.
The Committee shall have full and complete authority, subject to the
limitations of the Plan and to Office of Thrift Supervision regulations, to
grant awards of Restricted Stock and, in addition to the terms and conditions
contained in paragraphs (a) through (f) of this Section 3, to provide such other
terms and conditions (which need not be identical among Participants) in respect
of such Awards, and the vesting thereof, as the Committee shall determine.
(a) At the time of an award of Restricted Stock, the Committee shall
establish for each Participant a Restricted Period during which or at
the expiration of which, as the Committee shall determine and provide
in the agreement referred to in paragraph (d) of this Section 3, the
Shares awarded as Restricted Stock shall vest, and subject to any such
other terms and conditions as the Committee shall provide, shares of
Restricted Stock may not be sold, assigned, transferred, pledged,
voted or otherwise encumbered by the Participant, except as
hereinafter provided, during the Restricted Period. Except for such
restrictions, and subject to paragraphs (c) and (e) of this Section 3
and Section 4 hereof, the Participant as owner of such shares shall
have all the rights of a stockholder. No director, advisory director
or director emeritus who is not an employee of the Corporation or the
Bank shall be granted Awards with respect to more than 5% of the total
shares subject to the Plan. All non-employee directors of the
Corporation, in the aggregate, may not be granted Awards with respect
to more than 30% of the total shares subject to the Plan and no
individual shall be granted Awards with respect to more than 25% of
the total shares subject to the Plan. No Awards shall begin vesting
earlier than one year from the date the Plan is ratified by
stockholders of the Corporation and no Awards shall vest at a rate in
excess of 20% per year beginning from the date of grant. In the event
Office of Thrift Supervision Regulations are amended (the "Amended
Regulations") to permit shorter vesting periods, any Awards made
pursuant to this Plan, which Award is subject to the requirements of
such Amended Regulations, may vest, at the sole discretion of the
Committee, in accordance with such Amended Regulations. Subject to
compliance with Office of Thrift Supervision Regulations, the
Committee shall have the authority, in its discretion, to accelerate
the time at which any or all of the restrictions shall lapse with
respect thereto, or to remove any or all of such restrictions,
whenever it may determine that such action is appropriate by reason of
changes in applicable tax or other laws or other changes in
circumstances occurring after the commencement of such Restricted
Period.
(b) If a Participant ceases to maintain Continuous Service for any reason
(other than death or Disability), all Shares of Restricted Stock
awarded to such Participant and which at the time of such termination
of Continuous Service are subject to the restrictions imposed by
paragraph (a) of this Section 3 shall upon such termination of
Continuous Service be forfeited and returned to the Corporation. If a
Participant ceases to maintain Continuous Service by reason of death
or Disability, Restricted Stock then still subject to restrictions
imposed by paragraph (a) of this Section 3 will be free of those
restrictions.
(c) Each certificate in respect of Shares of Restricted Stock awarded
under the Plan shall be registered in the name of the Participant and
deposited by the Participant, together with a stock power endorsed in
blank, with the Corporation and shall bear the following (or a
similar) legend:
"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) contained in the Recognition and Retention Plan of CBES
B-2
<PAGE>
Bancorp, Inc. Copies of such Plan are on file in the office of the
Secretary of CBES Bancorp, Inc., 1001 N. Jesse James Road, Excelsior
Springs, Missouri 64024-1201."
(d) At the time of any Award, the Participant shall enter into an
agreement with the Corporation in a form specified by the Committee,
agreeing to the terms and conditions of the Award and such other
matters as the Committee, in its sole discretion, shall determine (the
"Restricted Stock Agreement").
(e) After an Award has been granted but before such Award has been earned,
the Participant shall receive any cash dividends paid with respect to
such shares. Unless the Participant has made an election under Section
83(b) of the Code, cash dividends so paid on shares that have not yet
been earned by the Participant shall be treated as compensation income
to the Participant when paid. Any stock dividends paid with respect to
such shares shall be considered Restricted Stock, subject to the
restrictions of this Section 3.
(f) At the expiration of the restrictions imposed by paragraph (a) of this
Section 3, the Corporation shall redeliver to the Participant (or
where the relevant provision of paragraph (b) of this Section 3
applies in the case of a deceased Participant, to his legal
representative, beneficiary or heir) the certificate(s) and stock
power deposited with it pursuant to paragraph (c) of this Section 3
and the Shares represented by such certificate(s) shall be free of the
restrictions referred to in paragraph (a) of this Section 3.
(g) After an Award has been granted to a Participant, the Participant
shall have the right to vote the Restricted Stock subject to the
Award.
4. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of any change in the outstanding Shares subsequent to the
effective date of the Plan by reason of any reorganization, recapitalization,
stock split, stock dividend, combination or exchange of shares, merger,
consolidation or any change in the corporate structure or Shares of the
Corporation, the maximum aggregate number and class of shares as to which Awards
may be granted under the Plan and the number and class of shares with respect to
which Awards theretofore have been granted under the Plan shall be appropriately
adjusted by the Committee, whose determination shall be conclusive. Any shares
of stock or other securities received, as a result of any of the foregoing, by a
Participant with respect to Restricted Stock shall be subject to the same
restrictions and the certificate(s) or other instruments representing or
evidencing such shares or securities shall be legended and deposited with the
Corporation in the manner provided in Section 3 hereof.
5. ASSIGNMENTS AND TRANSFERS.
No Award nor any right or interest of a Participant under the Plan in any
instrument evidencing any Award under the Plan may be assigned, encumbered or
transferred except, in the event of the death of a Participant, by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined in the Code or Title I of ERISA or the rules thereunder.
6. ADMINISTRATION.
The Plan shall be administered by a Committee consisting of two or more
members, each of whom shall be a Disinterested Person. The members of the
Committee shall be appointed by the Board of Directors of the Corporation.
Except as limited by the express provisions of the Plan, the Committee shall
have sole and complete authority and discretion, subject to Office of Thrift
Supervision Regulations, to (I) select Participants and grant Awards; (ii)
determine the number of shares to be subject to types of Awards generally, as
well as to individual Awards granted under the Plan; (iii) determine the terms
and conditions upon which Awards shall be granted under the Plan; (iv) prescribe
the form and terms of instruments evidencing such grants; and (v) establish from
time to time regulations for the administration of the Plan, interpret the Plan,
and make all determinations deemed necessary or advisable for the administration
of the Plan.
B-3
<PAGE>
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by a majority of the Committee without a meeting, shall
be acts of the Committee.
7. SHARES SUBJECT TO PLAN.
Subject to adjustment by the operation of Section 4 hereof, the maximum
number of Shares with respect to which Awards may be made under the Plan is 4.0%
of the total Shares sold in the Bank's conversion to stock form, subject to the
Bank's capital level meeting OTS regulatory requirements at the time of
submission to stockholders. The shares with respect to which Awards may be made
under the Plan may be either authorized and unissued shares or issued shares
reacquired and held as treasury shares. An Award shall not be considered to have
been made under the Plan with respect to Restricted Stock which is forfeited and
new Awards may be granted under the Plan with respect to the number of Shares as
to which such forfeiture has occurred.
8. EMPLOYEE RIGHTS UNDER THE PLAN.
No director, officer or employee shall have a right to be selected as a
Participant nor, having been so selected, to be selected again as a Participant
and no director, officer, employee or other person shall have any claim or right
to be granted an Award under the Plan or under any other incentive or similar
plan of the Corporation or any Affiliate. Neither the Plan nor any action taken
thereunder shall be construed as giving any employee any right to be retained in
the employ of the Corporation, the Bank or any Affiliate.
9. WITHHOLDING TAX.
Upon the termination of the Restricted Period with respect to any shares of
Restricted Stock (or at any such earlier time, if any, that an election is made
by the Participant under Section 83(b) of the Code, or any successor provision
thereto, to include the value of such shares in taxable income), the Corporation
may withhold from any payment or distribution made under this Plan sufficient
Shares or may withhold or cause to be paid by Participant sufficient cash to
cover any applicable withholding and employment taxes. The Corporation shall
have the right to deduct from all dividends paid with respect to shares of
Restricted Stock the amount of any taxes which the Corporation is required to
withhold with respect to such dividend payments. No discretion or choice shall
be conferred upon any Participant with respect to the form, timing or method of
any such tax withholding.
10. AMENDMENT OR TERMINATION.
The Board of Directors of the Corporation may amend, suspend or terminate
the Plan or any portion thereof at any time, subject to Office of Thrift
Supervision Regulations, provided, however, that no such amendment, suspension
or termination shall impair the rights of any Participant, without his consent,
in any Award theretofore made pursuant to the Plan.
Notwithstanding anything in this Plan to the contrary, to the extent that
the Plan provides for formula awards, as defined in Rule 16b-3(c)(2)(ii) under
the Securities Exchange Act of 1934, as amended, such provisions may not be
amended more than once every six months, other than to comport with changes in
the Code, ERISA or the rules thereunder.
11. TERM OF PLAN.
The Plan shall become effective upon its ratification by stockholders of
the Corporation, following the completion of the Bank's conversion to stock
form. It shall continue in effect for a term of ten years unless sooner
terminated under Section 10 hereof.
12. INITIAL GRANTS.
By, and simultaneously with, the ratification of this Plan by the
stockholders of the Corporation, each member of the Board of Directors of the
Corporation and each advisory director and director emeritus of the
B-4
<PAGE>
Corporation at the time of stockholder ratification, who is not a full-time
Employee, is hereby granted an Award of _____ shares of Restricted Stock. Each
such Award shall be evidenced by a Restricted Stock Agreement in a form approved
by the Committee administering this plan and shall be subject in all respects to
the terms and conditions of this Plan, which are controlling. In addition, each
non-employee director of the Corporation first elected subsequent to the time of
stockholder ratification of this Plan, shall be issued an Award equal to the
fair market value of _____ shares of Restricted Stock determined at the time of
stockholder ratification of the Plan, subject to availability. All Awards of
Restricted Stock granted pursuant to this Section 12 shall be rounded down to
the nearest whole share to the extent necessary to ensure that no shares of
Restricted Stock representing fractional shares are issued. Each of the Awards
granted in this Section 12 shall vest in five equal annual installments, with
the first installment vesting on the one year anniversary of the date of grant.
Awards granted pursuant to this Section 12 are subject to the conditions of the
Plan, including the requirement that the director maintain Continuous Service
with the Corporation, provided that no Awards shall be earned in any fiscal year
--------
in which the Bank fails to meet all of its fully phased-in capital requirements.
B-5
<PAGE>
Exhibit 10.3
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this ___
day of __________, 199_, by and between Community Bank of Excelsior Springs, a
Savings Bank (hereinafter referred to as the "Bank" whether in mutual or stock
form), and ______________ (the "Employee").
WHEREAS, the Employee is currently serving as ___________________ of the
Bank; and
WHEREAS, the Bank has adopted a plan of conversion whereby the Bank will
convert to capital stock form as the subsidiary of CBES Bancorp, Inc. (the
"Holding Company"), subject to the approval of the Bank's members and the Office
of Thrift Supervision (the "Conversion"); and
WHEREAS, the board of directors of the Bank ("Board of Directors")
recognizes that, as is the case with publicly held corporations generally, the
possibility of a change in control of the Holding Company and/or the Bank may
exist and that such possibility, and the uncertainty and questions which it may
raise among management, may result in the departure or distraction of key
management personnel to the detriment of the Bank, the Holding Company and their
respective stockholders; and
WHEREAS, the Board of Directors believes it is in the best interests of the
Bank to enter into this Agreement with the Employee in order to assure
continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to the Employee's assigned
duties without distraction in the face of potentially disruptive circumstances
arising from the possibility of a change in control of the Holding Company or
the Bank, although no such change is now contemplated; and
WHEREAS, the Board of Directors has approved and authorized the execution
of this Agreement with the Employee to take effect as stated in Section 2
hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein, it is AGREED as follows:
1. Definitions.
-----------
(a) The term "Change in Control" means (1) an event of a nature that
(i) results in a change in control of the Bank or the Holding Company within the
meaning of the Home Owners' Loan Act of 1933 and 12 C.F.R. Part 574 as in effect
on the date hereof; or (ii) would be required to be reported in response to Item
1 of the current report on Form 8-K, as in effect on the date hereof, pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act"); (2) any person (as the term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange
<PAGE>
Act), directly or indirectly of securities of the Bank or the Holding Company
representing 20% or more of the Bank's or the Holding Company's outstanding
securities; (3) individuals who are members of the board of directors of the
Bank or the Holding Company on the date hereof (the "Incumbent Board") cease for
any reason to constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election was approved by
a vote of at least three-quarters of the directors comprising the Incumbent
Board, or whose nomination for election by the Holding Company's stockholders
was approved by the nominating committee serving under an Incumbent Board, shall
be considered a member of the Incumbent Board; or (4) a reorganization, merger,
consolidation, sale of all or substantially all of the assets of the Bank or the
Holding Company or a similar transaction in which the Bank or the Holding
Company is not the resulting entity. The term "Change in Control" shall not
include an acquisition of securities by an employee benefit plan of the Bank or
the Holding Company or the acquisition of securities of the Bank by the Holding
Company in connection with the Conversion. In the application of 12 C.F.R. Part
574 to a determination of a Change in Control, determinations to be made by the
OTS or its Director under such regulations shall be made by the Board of
Directors.
(b) The term "Commencement Date" means the date of completion of
Conversion.
(c) The term "Date of Termination" means the date upon which the
Employee ceases to serve as an employee of the Bank.
(d) The term "Involuntarily Termination" means termination of the
employment of Employee without the Employee's express written consent, and shall
include a material diminution of or interference with the Employee's duties,
responsibilities and benefits as _________ of the Bank, including (without
limitation) any of the following actions unless consented to in writing by the
Employee: (1) a change in the principal workplace of the Employee to a location
outside of a 30 mile radius from the Bank's headquarters office as of the date
hereof; (2) a material demotion of the Employee; (3) a material reduction in the
number or seniority of other Bank personnel reporting to the Employee or a
material reduction in the frequency with which, or in the nature of the matters
with respect to which, such personnel are to report to the Employee, other than
as part of a Bank- or Holding Company-wide reduction in staff; (4) a material
adverse change in the Employee's salary, perquisites, benefits, contingent
benefits or vacation, other than as part of an overall program applied uniformly
and with equitable effect to all members of the senior management of the Bank or
the Holding Company; and (5) a material permanent increase in the required hours
of work or the workload of the Employee. The term "Involuntary Termination"
does not include Termination for Cause or termination of employment due to
retirement, death, disability or suspension or temporary or permanent
prohibition from participation in the conduct of the Bank's affairs under
Section 8 of the Federal Deposit Insurance Act ("FDIA").
(e) The terms "Termination for Cause" and "Terminated For Cause" mean
termination of the employment of the Employee because of the Employee's personal
dishonesty, incompetence, willful misconduct, breach of a fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, or regulation (other than traffic violations or
similar offenses) or final cease-and-desist order, or material breach of
2
<PAGE>
any provision of this Agreement. The Employee shall not be deemed to have been
Terminated for Cause unless and until there shall have been delivered to the
Employee a copy of a resolution, duly adopted by the affirmative vote of not
less than a majority of the entire membership of the Board of Directors of the
Bank at a meeting of the Board called and held for such purpose (after
reasonable notice to the Employee and an opportunity for the Employee, together
with the Employee's counsel, to be heard before the Board), stating that in the
good faith opinion of the Board the Employee has engaged in conduct described in
the preceding sentence and specifying the particulars thereof in detail.
2. Term. The term of this Agreement shall be a period of [UP TO THREE]
----
years commencing on the Commencement Date, subject to earlier termination as
provided herein. Beginning on the first anniversary of the Commencement Date,
and on each anniversary thereafter, the term of this Agreement shall be extended
for a period of one year in addition to the then-remaining term, provided that
-------------
(1) the Bank has not given notice to the Employee in writing at least 90 days
prior to such anniversary that the term of this Agreement shall not be extended
further; and (2) prior to such anniversary, the Board of Directors of the Bank
explicitly reviews and approves the extension. Reference herein to the term of
this Agreement shall refer to both such initial term and such extended terms.
3. Employment. The Employee is employed as _____________ of the Bank. As
----------
such, the Employee shall render administrative and management services as are
customarily performed by persons situated in similar executive capacities, and
shall have such other powers and duties of an officer of the Bank as the Board
of Directors may prescribe from time to time.
4. Compensation.
------------
(a) Salary. The Bank agrees to pay the Employee during the term of
------
this Agreement, not less frequently than monthly, the salary established by the
Board of Directors, which shall be at least the Employee's salary in effect as
of the Commencement Date. The amount of the Employee's salary shall be reviewed
by the Board of Directors, beginning not later than the first anniversary of the
Commencement Date. Adjustments in salary or other compensation shall not limit
or reduce any other obligation of the Bank under this Agreement. The Employee's
salary in effect from time to time during the term of this Agreement shall not
thereafter be reduced.
(b) Discretionary Bonuses. The Employee shall be entitled to
---------------------
participate in an equitable manner with all other executive officers of the Bank
in discretionary bonuses as authorized and declared by the Board of Directors to
its executive employees. No other compensation provided for in this Agreement
shall be deemed a substitute for the Employee's right to participate in such
bonuses when and as declared by the Board of Directors.
(c) Expenses. The Employee shall be entitled to receive prompt
--------
reimbursement for all reasonable expenses incurred by the Employee in performing
services under this Agreement in accordance with the policies and procedures
applicable to the executive officers of the Bank, provided that the Employee
-------- ----
accounts for such expenses as required under such policies and procedures.
3
<PAGE>
5. Benefits.
--------
(a) Participation in Retirement and Employee Benefit Plans. The
------------------------------------------------------
Employee shall be entitled to participate in all plans relating to pension,
thrift, profit-sharing, group life and disability insurance, medical and dental
coverage, education, cash bonuses, and other retirement or employee benefits or
combinations thereof, in which the Bank's executive officers participate.
(b) Fringe Benefits. The Employee shall be eligible to participate
---------------
in, and receive benefits under, any fringe benefit plans which are or may become
applicable to the Bank's executive officers.
6. Vacations; Leave. The Employee shall be entitled to annual paid
----------------
vacation in accordance with the policies established by the Bank's Board of
Directors for executive employees and to voluntary leave of absence, with or
without pay, from time to time at such times and upon such conditions as the
Board of Directors of the Bank may determine in its discretion.
7. Termination of Employment.
-------------------------
(a) Involuntary Termination. The Board of Directors may terminate
-----------------------
the Employee's employment at any time, but, except in the case of Termination
for Cause, termination of employment shall not prejudice the Employee's right to
compensation or other benefits under this Agreement. In the event of Involuntary
Termination other than in connection with or within twelve (12) months after a
Change in Control, (1) the Bank shall pay to the Employee during the remaining
term of this Agreement, the Employee's salary at the rate in effect immediately
prior to the Date of Termination, payable in such manner and at such times as
such salary would have been payable to the Employee under Section 4 if the
Employee had continued to be employed by the Bank, and (2) the Bank shall
provide to the Employee during the remaining term of this Agreement
substantially the same health benefits as the Bank maintained for its executive
officers immediately prior to the Date of Termination.
(b) Termination for Cause. In the event of Termination for Cause,
---------------------
the Bank shall pay the Employee the Employee's salary through the Date of
Termination, and the Bank shall have no further obligation to the Employee under
this Agreement.
(c) Voluntary Termination. The Employee's employment may be
---------------------
voluntarily terminated by the Employee at any time upon 90 days written notice
to the Bank or upon such shorter period as may be agreed upon between the
Employee and the Board of Directors of the Bank. In the event of such voluntary
termination, the Bank shall be obligated to continue to pay to the Employee the
Employee's salary and benefits only through the Date of Termination, at the time
such payments are due, and the Bank shall have no further obligation to the
Employee under this Agreement.
(d) Change in Control. In the event of Involuntary Termination in
-----------------
connection with or within 12 months after a Change in Control which occurs at
any time while the Employee is employed under this Agreement, the Bank shall,
subject to Section 8 of this Agreement, (1) pay to the Employee in a lump sum in
cash within 25 business days after the
4
<PAGE>
Date of Termination an amount equal to 299% of the Employee's "base amount" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"); and (2) provide to the Employee during the remaining term of this
Agreement substantially the same health benefits as the Bank maintained for its
executive officers immediately prior to the Change in Control.
(e) Death; Disability. In the event of the death of the Employee
-----------------
while employed under this Agreement and prior to any termination of employment,
the Employee's estate, or such person as the Employee may have previously
designated in writing, shall be entitled to receive from the Bank the salary of
the Employee through the last day of the calendar month in which the Employee
died. If the Employee becomes disabled as defined in the Bank's then current
disability plan, if any, or if the employee is otherwise unable to serve as
______________, this Agreement shall continue in full force and effect, except
that the salary paid to the Employee shall be reduced by any disability
insurance payments made to Employee on policies of insurance maintained by the
Bank at its expense.
(f) Temporary Suspension or Prohibition. If the Employee is
-----------------------------------
suspended and/or temporarily prohibited from participating in the conduct of the
Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA,
12 U.S.C. (S) 1818(e)(3) and (g)(1), the Bank's obligations under this Agreement
shall be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Bank may in its
discretion (1) pay the Employee all or part of the compensation withheld while
its obligations under this Agreement were suspended and (ii) reinstate in whole
or in part any of its obligations which were suspended.
(g) Permanent Suspension or Prohibition. If the Employee is removed
-----------------------------------
and/or permanently prohibited from participating in the conduct of the Bank's
affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12
U.S.C. (S) 1818(e)(4) and (g)(1), all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
(h) Default of the Bank. If the Bank is in default (as defined in
-------------------
Section 3(x)(1) of the FDIA), all obligations under this Agreement shall
terminate as of the date of default, but this provision shall not affect any
vested rights of the contracting parties.
(i) Termination by Regulators. All obligations under this Agreement
-------------------------
shall be terminated, except to the extent determined that continuation of this
Agreement is necessary for the continued operation of the Bank: (1) by the
Director of the Office of Thrift Supervision (the "Director") or his or her
designee, at the time the Federal Deposit Insurance Corporation [OR THE
RESOLUTION TRUST CORPORATION] enters into an agreement to provide assistance to
or on behalf of the Bank under the authority contained in Section 13(c) of the
FDIA; or (2) by the Director or his or her designee, at the time the Director or
his or her designee approves a supervisory merger to resolve problems related to
operation of the Bank or when the Bank is determined by the Director to be in an
unsafe or unsound condition. Any rights of the parties that have already vested,
however, shall not be affected by any such action.
5
<PAGE>
8. Certain Reduction of Payments by the Bank.
-----------------------------------------
(a) Notwithstanding any other provision of this Agreement, if
payments under this Agreement, together with any other payments received or to
be received by the Employee in connection with a Change in Control would be
deemed to include an "excess parachute payment" pursuant to Section 280G of the
Code, then benefits under this Agreement shall be reduced (not less than zero)
to the extent necessary to avoid the payment of an excess parachute payment by
the Bank. The Employee shall determine the allocation of such reduction among
payments to the Employee.
(b) Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
(S) 1828(k) and any regulations promulgated thereunder.
9. No Mitigation. The Employee shall not be required to mitigate the
-------------
amount of any salary or other payment or benefit provided for in this Agreement
by seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Agreement be reduced by any compensation earned by
the Employee as the result of employment by another employer, by retirement
benefits after the Date of Termination, or otherwise.
10. Attorneys Fees. In the event the Bank exercises its right of
--------------
Termination for Cause, but it is determined by a court of competent jurisdiction
or by an arbitrator pursuant to Section 17 that cause did not exist for such
termination, or if in any event it is determined by any such court or arbitrator
that the Bank has failed to make timely payment of any amounts owed to the
Employee under this Agreement, the Employee shall be entitled to reimbursement
for all reasonable costs, including attorneys' fees, incurred in challenging
such termination or collecting such amounts. Such reimbursement shall be in
addition to all rights to which the Employee is otherwise entitled under this
Agreement.
11. No Assignments.
--------------
(a) This Agreement is personal to each of the parties hereto, and
neither party may assign or delegate any of its rights or obligations hereunder
without first obtaining the written consent of the other party; provided,
however, that the Bank shall require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Bank, by an assumption
agreement in form and substance satisfactory to the Employee, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Bank would be required to perform it if no such succession or
assignment had taken place. Failure of the Bank to obtain such an assumption
agreement prior to the effectiveness of any such succession or assignment shall
be a breach of this Agreement and shall entitle the Employee to compensation
from the Bank in the same amount and on the same terms as the compensation
pursuant to Section 7(d) hereof. For purposes of implementing the provisions of
this Section 11(a), the date on which any such succession becomes effective
shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder shall
inure to the benefit of and be enforceable by the Employee's personal and legal
representatives, executors,
6
<PAGE>
administrators, successors, heirs, distributees, devisees and legatees. If the
Employee should die while any amounts would still be payable to the Employee
hereunder if the Employee had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Employee's devisee, legatee or other designee or if there is no
such designee, to the Employee's estate.
12. Notice. For the purposes of this Agreement, notices and all other
------
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, to the Bank at its home office,
to the attention of the Board of Directors with a copy to the Secretary of the
Bank, or, if to the Employee, to such home or other address as the Employee has
most recently provided in writing to the Bank.
13. Amendments. No amendments or additions to this Agreement shall be
----------
binding unless in writing and signed by both parties, except as herein otherwise
provided.
14. Headings. The headings used in this Agreement are included solely for
--------
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
15. Severability. The provisions of this Agreement shall be deemed
------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Governing Law. This Agreement shall be governed by the laws of the
-------------
United States to the extent applicable and otherwise by the laws of the State of
Missouri.
17. Arbitration. Any dispute or controversy arising under or in
-----------
connection with this Agreement shall be settled exclusively by arbitration in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction.
[Remainder of Page Intentionally Left Blank]
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
Attest: COMMUNITY BANK OF EXCELSIOR
SPRINGS, A SAVINGS BANK
____________________ _____________________________________
Secretary By:
Its:
Employee
_____________________________________
8
<PAGE>
Exhibit 10.4
FORM OF
COMMUNITY BANK OF EXCELSIOR SPRINGS,
A SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP PLAN
(adopted effective January 1, 1996)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS,
A SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP PLAN
This Employee Stock Ownership Plan, executed on the ___ day of ___________,
1996, by Community Bank of Excelsior Springs, a Missouri-chartered stock savings
bank (the "Bank").
W I T N E S S E T H T H A T
WHEREAS, the Board of directors of the Bank has resolved to adopt an
employee stock ownership plan for eligible employees in accordance with the
terms and conditions presented to the directors;
NOW, THEREFORE, the Bank hereby adopts the following Plan setting forth the
terms and conditions pertaining to contributions by the Employer and the payment
of benefits to Participants and Beneficiaries.
IN WITNESS WHEREOF, the Bank has adopted this Plan and caused this
instrument to be executed by its duly authorized officers as of the above date.
ATTEST:
__________________________ By: _______________________________
Secretary President
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
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<S> <C> <C>
Section 1. Plan Identity ........................................ 1
1.1 Name.................................................. 1
1.2 Purpose............................................... 1
1.3 Effective Date........................................ 1
1.4 Fiscal Period......................................... 1
1.5 Single Plan for All Employees......................... 1
1.6 Interpretation of Provisions.......................... 1
Section 2. Definitions........................................... 1
3. Eligibility for Participation......................... 8
3.1 Initial Eligibility................................... 8
3.2 Definition of Eligibility Year........................ 8
3.3 Terminated Employees.................................. 8
3.4 Certain Employees Ineligible.......................... 8
3.5 Participation and Reparticipation..................... 9
3.6 Omission of Eligible Employee......................... 9
3.7 Inclusion of Ineligible Employee...................... 9
Section 4. Employer Contributions and Credits.................... 9
4.1 Discretionary Contributions........................... 9
4.2 Contributions for Stock Obligations................... 9
4.3 Definitions Related to Contributions.................. 10
4.4 Conditions as to Contributions........................ 10
4.5 Transfers............................................. 11
Section 5. Limitations on Contributions
and Allocations.................................. 11
5.1 Limitation on Annual Additions........................ 11
5.2 Coordinated Limitation With Other Plans............... 12
5.3 Effect on Limitations................................. 13
5.4 Limitations as to Certain Participants................ 13
Section 6. Trust Fund and Its Investment......................... 14
6.1 Creation of Trust Fund................................ 14
6.2 Stock Fund and Investment Fund........................ 14
6.3 Acquisition of Stock.................................. 14
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
6.4 Participants' Option to Diversify..................... 15
Section 7. Voting Rights and Dividends on Stock.................. 16
7.1 Voting and Tendering of Stock......................... 16
7.2 Dividends on Stock.................................... 16
Section 8. Adjustments to Accounts............................... 17
8.1 Adjustments for Transactions.......................... 17
8.2 Valuation of Investment Fund.......................... 17
8.3 Adjustments for Investment Experience................. 17
Section 9. Vesting of Participants' Interests.................... 17
9.1 Deferred Vesting in Accounts.......................... 17
9.2 Computation of Vesting Years.......................... 18
9.3 Full Vesting Upon Certain Events...................... 18
9.4 Full Vesting Upon Plan Termination.................... 19
9.5 Forfeiture, Repayment, and Restoral................... 19
9.6 Accounting for Forfeitures............................ 19
9.7 Vesting and Nonforfeitability......................... 20
Section 10. Payment of Benefits................................... 20
10.1 Benefits for Participants............................. 20
10.2 Time for Distribution................................. 20
10.3 Marital Status........................................ 21
10.4 Delay in Benefit Determination........................ 22
10.5 Accounting for Benefit Payments....................... 22
10.6 Options to Receive and Sell Stock..................... 22
10.7 Restrictions on Disposition of Stock.................. 23
10.8 Continuing Loan Provisions; Creation of Projections
and Rights...................................... 23
10.9 Direct Rollover of Eligible Distribution.............. 23
Section 11. Rules Governing Benefit Claims and
Review of Appeals.............................. 24
11.1 Claim for Benefits.................................... 24
11.2 Notification by Committee............................. 24
11.3 Claims Review Procedure............................... 24
Section 12. The Committee and Its Functions....................... 25
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
12.1 Authority of Committee................................ 25
12.2 Identity of Committee................................. 25
12.3 Duties of Committee................................... 25
12.4 Valuation of Stock.................................... 26
12.5 Compliance with ERISA................................. 26
12.6 Action by Committee................................... 26
12.7 Execution of Documents................................ 26
12.8 Adoption of Rules..................................... 26
12.9 Responsibilities...................................... 26
12.10 Alternative Payees in Event of Incapacity............. 26
12.11 Indemnification by Employers.......................... 27
12.12 Nonparticipation by Interested Member................. 27
Section 13. Adoption, Amendment or Termination of the Plan........ 27
13.1 Adoption of Plan by Other Employers................... 27
13.2 Adoption of Plan by Successor......................... 27
13.3 Plan Adoption Subject to Qualification................ 27
13.4 Right to Amend or Terminate........................... 28
Section 14. Miscellaneous Provisions.............................. 28
14.1 Plan Creates No Employment Rights..................... 28
14.2 Nonassignability of Benefits.......................... 28
14.3 Limit of Employer Liability........................... 29
14.4 Treatment of Expenses................................. 29
14.5 Number and Gender..................................... 29
14.6 Nondiversion of Assets................................ 29
14.7 Separability of Provisions............................ 29
14.8 Service of Process.................................... 29
14.9 Governing State Law................................... 29
14.10 Employer Contributions Conditioned on Deductibility... 29
14.11 Unclaimed Accounts.................................... 29
14.12 Qualified Domestic Relations Order.................... 30
Section 15. Top-Heavy Provisions.................................. 30
15.1 Top-Heavy Plan........................................ 30
15.2 Super Top-Heavy Plan.................................. 31
15.3 Definitions........................................... 31
15.4 Top-Heavy Rules of Application........................ 32
15.5 Top-Heavy Ratio....................................... 33
15.6 Minimum Contributions................................. 34
15.7 Minimum Vesting....................................... 34
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
15.8 Top Heavy Provisions Control in Top-Heavy Plan........ 34
</TABLE>
(iv)
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS,
A SAVINGS BANK
EMPLOYEE STOCK OWNERSHIP PLAN
SECTION 1. PLAN IDENTITY.
-------------
1.1 NAME. The name of this Plan is "Community Bank of Excelsior Springs,
----
A Savings Bank, Employee Stock Ownership Plan."
1.2 PURPOSE. The purpose of this Plan is to describe the terms and
-------
conditions under which contributions made pursuant to the Plan will be credited
and paid to the Participants and their Beneficiaries.
1.3 EFFECTIVE DATE. The Effective Date of this Plan is January 1, 1996.
--------------
1.4 FISCAL PERIOD. This Plan shall be operated on basis of a January 1
-------------
to December 31 fiscal year for the purpose of keeping the Plan's books and
records and distributing or filing any reports or returns required by law.
1.5 SINGLE PLAN FOR ALL EMPLOYERS. This Plan shall be treated as a
-----------------------------
single plan with respect to all participating Employers for the purpose or
crediting contributions and forfeitures and distributing benefits, determining
whether there has been any termination of Service, and applying the limitations
set forth in Section 5.
1.6 INTERPRETATION OF PROVISIONS. The Employers intend this Plan and the
----------------------------
Trust to be a qualified stock bonus plan under Section 401(a) of the Code and an
employee stock ownership plan within the meaning of Section 407(d)(6) of ERISA
and Section 4975(e)(7) of the Code. The Plan is intended to have its assets
invested primarily in qualifying employer securities of one or more Employers
within the meaning of Section 407(d)(3) of ERISA, and to satisfy any requirement
under ERISA or the Code applicable to such a plan.
Accordingly, the Plan and Trust Agreement shall be interpreted and applied
in a manner consistent with this intent and shall be administered at all times
and in all respects in a nondiscriminatory manner.
SECTION 2. DEFINITIONS.
-----------
The following capitalized words and phrases shall have the meanings
specified when used in this Plan and in the Trust Agreement, unless the context
clearly indicates otherwise:
"ACCOUNT" means a Participant's interest in the assets accumulated under
this Plan as expressed in terms of a separate account balance which is
periodically adjusted to reflect his Employer's contributions, the Plan's
investment experience, and distributions and forfeitures.
"ACTIVE PARTICIPANT" means any Employee who has satisfied the eligibility
requirements of Section 3 and who qualifies as an Active Participant for a
particular Plan Year under Section 4.3.
<PAGE>
"BANK" means Community Bank of Excelsior Springs, A Savings Bank, and any
entity which succeeds to the business of Community Bank of Excelsior Springs, A
Savings Bank, and adopts this Plan as its own pursuant to Section 14.2.
"BENEFICIARY" means the person or persons who are designated by a
Participant to receive benefits payable under the Plan on the Participant's
death. In the absence of any designation or if all the designated Beneficiaries
shall die before the Participant dies or shall die before all benefits have been
paid, the Participant's Beneficiary shall be his surviving spouse, if any, or
his estate if he is not survived by a spouse. The Committee may rely upon the
advice of the Participant's executor or administrator as to the identity of the
Participant's spouse.
"BREAK IN SERVICE" means any Vesting Year in which an Employee has 500 or
fewer Hours of Service. Solely for this purpose, an Employee shall be considered
employed for his normal hours of paid employment during a Recognized Absence
(said employee shall not be credited with more than 501 Hours of Service to
avoid a Break in Service), unless he does not resume his Service at the end of
the Recognized Absence. Further, if an Employee is absent for any period
beginning on or after January 1, 1985, (i) by reason of the Employee's
pregnancy, (ii) by reason of the birth of the Employee's child, (iii) by reason
of the placement of a child with the Employee in connection with the Employee's
adoption of the child, or (iv) for purposes of caring for such child for a
period beginning immediately after such birth or placement, the Employee shall
be credited with the Hours of Service which would normally have been credited
but for such absence, up to a maximum of 501 Hours of Service.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the committee responsible for the administration of this
Plan in accordance with Section 12.
"COMPANY" means CBES Bancorp, Inc., the Delaware stock holding company of
Bank.
"DISABILITY" means only a disability which renders the Participant totally
unable, as a result of bodily or mental disease or injury, to perform any duties
for an Employer for which he is reasonably fitted, which disability is expected
to be permanent or of long and indefinite duration. However, this term shall not
include any disability directly or indirectly resulting from or related to
habitual drunkenness or addiction to narcotics, a criminal act or attempt,
service in the armed forces of any country, an act of war, declared or
undeclared, any injury or disease occurring while compensation to the
Participant is suspended, or any injury which is intentionally self-inflicted.
Further, this term shall apply only if (i) the Participant is sufficiently
disabled to qualify for the payment of disability benefits under the federal
Social Security Act or Veterans Disability Act, or (ii) the Participant's
disability is certified by a physician selected by the Committee. Unless the
Participant is sufficiently disabled to qualify for disability benefits under
the federal Social Security Act or Veterans Disability Act, the Committee may
require the Participant to be appropriately examined from time to time by one or
more physicians chosen by the Committee, and no Participant who refuses to be
examined shall be treated as having a Disability. In any event, the Committee's
good faith decision as to whether a Participant's Service has been terminated by
Disability. In an event, the Committee's good faith decision as to whether a
Participant's Service has been terminated by Disability shall be final and
conclusive.
-2-
<PAGE>
"EARLY RETIREMENT" means retirement on or after a Participant's attainment
of age 55 and the completion of twenty years of Service for an Employer. If the
participant separates from Service before satisfying the age requirement, but
has satisfied the Service requirement, the Participant will be entitled to elect
early retirement upon satisfaction of the age requirement.
"EFFECTIVE DATE" means January 1, 1996.
"EMPLOYEE" means any individual who is or has been employed or self-
employed by an Employer. "Employee" also means an individual employed by a
leasing organization who, pursuant to an agreement between an Employer and the
leasing organization, has performed services for the Employer and any related
persons (within the meaning of Section 414(n)(6) of the Code) on a
substantially full-time basis for more than one year, if such services are of a
type historically performed by employees in the Employee if (i) he participates
in a money purchase pension plan sponsored by the leasing organization which
provides for immediate participation, immediate full vesting, and an annual
contribution of at least 10 percent of the Employee's Total Compensation, and
(ii) leased employees do not constitute more than 20 percent of the Employer's
total work force (including leased employees, but excluding Highly Paid
Employees and any other employees who have not performed services for the
Employer on a substantially full-time basis for at least one year).
"EMPLOYER" means the Bank or any affiliate within the purview of section
414(b), (c) or (m) and 415(h) of the Code, any other corporation, partnership,
or proprietorship which adopts this Plan with the Bank's consent pursuant to
Section 13.1, and any entity which succeeds to the business of any Employer and
adopts the Plan pursuant to Section 13.2.
"ENTRY DATE" means the Effective Date of the Plan and each January 1 of
each Plan Year thereafter.
"ERISA" means the Employee Retirement Income Security Act of 1974 (P.L.
93-406, as amended).
"HIGHLY PAID EMPLOYEE" for any Plan Year means an Employee who, during
either of that or the immediately preceding Plan Year, (i) owned more than five
percent of the outstanding equity interest or the outstanding voting interest in
any Employer, (ii) had Total Compensation exceeding $75,000 (as adjusted
pursuant to section 415(d) of the Code), (iii) had Total Compensation exceeding
$50,000 (as adjusted pursuant to section 415(d) of the Code) and was among the
most highly compensated one-fifth of all Employees, or (iv) was at any time an
officer of an Employer and had Total Compensation exceeding $45,000 (or 50
percent of the currently applicable dollar limit under Section 415(b)(1)(A) of
the Code). For this purpose:
(a) Total Compensation" shall include any amount which is excludable
from the Employee's gross income for tax purposes pursuant to Section 125,
402(a)(8), 402(h)(1)(B), or 403(b) of the Code.
(b) The number of Employees in "the most highly compensated one-fifth
of all Employees" shall be determined by taking into account all individuals
working for all related
-3-
<PAGE>
Employer entities described in the definition of "Service" but excluding any
individual who has not completed six months of Service, who normally works fewer
than 17-1/2 hours per week or is fewer than six months per year, who has not
reached age 21, whose employment is covered by a collective bargaining
agreement, or who is a nonresident alien who receives no earned income from
United States sources.
(c) The number of individuals counted as "officers" shall not be more
than the lesser of (i) 50 individuals and (ii) the greater of 3 individuals or
10 percent of the total number of Employees. If no officer earns more than
$45,000 (or the adjusted limit), then the highest paid officer shall be a Highly
Paid Employee.
(d) A former employee shall be treated as a highly compensated
employee if such employee was a highly paid employee when such employee
separated from service, or if such employee was a highly paid employee at any
time after attaining age 55.
"HOURS OF SERVICE" means hours to be credited to an Employee under the following
rules:
(a) Each hour for which an Employee is paid or is entitled to be paid
for services to an Employer is an Hour of Service.
(b) Each hour for which an Employee is directly or indirectly paid or
is entitled to be paid for a period of vacation, holidays, illness,disability,
lay-off, jury duty, temporary military duty, or leave of absence is an Hour of
Service. However, except as otherwise specifically provided, no more than 501
Hours of Service shall be credited for any single continuous period which an
Employee performs no duties. No more than 501 hours of service will be credited
under this paragraph for any single continuous period (whether or not such
period occurs in a single computation period). Further, no Hours of Service
shall be credited on account of payments made solely under a plan maintained to
comply with worker's compensation, unemployment compensation, or disability
insurance laws, or to reimburse an Employee for medical expenses.
(c) Each hour for which back pay (ignoring any mitigation of damages)
is either awarded or agreed to by an Employer is an Hour of Service. However no
more than 501 Hours of Service shall be credited for any single continuous
period during which an Employee would not have performed any duties. The same
hours of service will not be credited both under paragraph (a) or (b) as the
case may be, and under this paragraph (c). These hours will be credited to the
employee for the computation period or periods to which the award or agreement
pertains rather than the computation period in which the award agreement or
payment is made.
(d) Hours of Service shall be credited in any one period only under
one of the foregoing paragraphs (a), (b) and (c); an Employee may not get double
credit for the same period.
(e) If an Employer finds it impractical to count the actual Hours of
Service for any class or group of non-hourly Employees, each Employee in that
class or group shall be credited with 45 Hours of Service for each weekly pay
period in which he has at least one Hour of Service. However, an Employee shall
be credited only for his normal working hours during a paid absence.
-4-
<PAGE>
(f) Hours of Service to be credited on account of a payment to an
Employee (including back pay) shall be recorded in the period of Service
for which the payment was made. If the period overlaps two or more Plan
Years, the Hours of Service credit shall be allocated in proportion to the
respective portions of the period included in the several Plan Years.
However, in the case of periods of 31 days or less, the Administrator may
apply a uniform policy of crediting the Hours of Service to either the
first Plan Year or the second.
(g) In all respects an Employee's Hours of Service shall be counted
as required by Section 2530.200b-2(b) and (c) of the Department of Labor's
regulations under Title I of ERISA.
"INVESTMENT FUND" means that portion of the Trust Fund consisting of assets
other than Stock.
"NORMAL RETIREMENT" means retirement on or after a Participant's 65th
birthday.
"PARTICIPANT" means any employee who is participating in the plan, or who
has previously participated in the Plan and still has a balance credited to his
Account.
"PLAN YEAR" means the twelve month period commencing January 1 and ending
December 31, and each succeeding 12 consecutive month period.
"RECOGNIZED ABSENCE" means a period for which--
(a) an Employer grants an Employee a leave of absence for a limited
period, but only if an Employer grants such leave on a nondiscriminatory
basis; or
(b) an Employee is temporarily laid off by an Employer because of a
change in business conditions; or
(c) an Employee is on active military duty, but only to the extent
that his employment rights are protected by the Military Selective Service
Act of 1967 (38 U.S.C. SEC. 2021).
"ROLL OVER ACCOUNT" means the separate account established to hold a
Participant's roll-over contributions and direct transfers.
"SERVICE" means an Employee's period(s) of employment or self-employment
with an Employer, excluding for initial eligibility purposes any period in which
the individual was a nonresident alien and did not receive from an Employer any
earned income which constituted income from sources within the United States.
An Employee's Service shall include any service which constitutes service with a
predecessor employer within the meaning of Section 414(a) of the Code. An
Employee's Service shall also include any service with an entity which is not an
Employer, but only either (i)for a period after 1975 in which the other entity
is a member of a controlled group of corporations or is under common control
with other trades and businesses within the meaning of Section 414(b) or 414(c)
of the Code, and a member of the controlled group or one of the trades and
business is an Employer, (ii) for a period after 1979 in which the other entity
is a member of an affiliated service group within the meaning of Section 414(m)
of the Code, and a member of the affiliated service group is an Employer, or
(iii) all employers aggregated with
-5-
<PAGE>
the Employer under Section 414(o) of the Code (but not until the Proposed
Regulations under Section 414(o) becomes effective).
"SPOUSE" means the individual, if any, to whom a Participant is lawfully
married on the date benefit payments to the Participant are to begin, or on the
date of the Participant's death, if earlier. A former spouse shall be treated as
the Spouse or surviving spouse to the extent provided under a qualified domestic
relations order as described in section 414(p) of the Code.
"STOCK" means shares of the Company's voting common stock or preferred
stock meeting the requirements of Section 409(e)(3) of the Code issued by an
Employer which is a member of the same controlled group of corporations within
the meaning of Code Section 414(b).
"STOCK FUND" means that portion of the Trust Fund consisting of Stock.
"STOCK OBLIGATION" means an indebtedness arising from any extension of
credit to the Plan or the Trust which satisfies the requirements set forth in
Section 6.3 and which was obtained for any or all of the following purposes:
(i) to acquire qualifying employer securities as defined in
Treasury Regulations (S) 54,49750121
(ii) to repay such Stock Obligation; or
(iii) to repay a prior exempt loan.
"TOTAL COMPENSATION" (a) shall mean:
(i) A Participant's wages, salaries, fees for
professional services and other amounts received (without
regard to whether an amount is paid in cash) for personal
services actually rendered in the course of employment with the
Employer while a Participant in the Plan, (including, but not
limited to, commissions paid to salesmen, compensation for
services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, severance payments and
amounts paid as a result of termination, and any deferred
compensation contributions made to this or any other Section
401(k) Plan on behalf of the Participant's), taxable fringe
benefits, reimbursements and expense allowances under a
nonaccountable plan (as described in Section 1.62-2(c) of the
Treasury Regulations).
(ii) Amounts described in sections 104(a)(3), 105(a), and
105(h), but only to the extent that these amounts are
includable in the gross income of the employee.
(iii) Amounts paid or reimbursed by the employer for moving
expenses incurred by an employee, but only to the extent that
at the time of payment it is
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<PAGE>
reasonable to believe that these amounts are not deductible by
the employee under section 217.
(iv) The value of a non-qualified stock option granted to
an employee by the employer, but only to the extent that the
value of the option is includable in the gross income of the
employee for the taxable year in which granted.
(v) The amount includable in the gross income of an
employee upon making the election described in section 83(b).
(b) The term "Total Compensation" does not include items such as:
(i) Contributions made by the Employer to a Plan of
deferred compensation to the extent that before the
application of Section 415 limitations to the Plan, the
contributions are not includable in the gross income of the
Employee for the taxable year in which contributed, except for
deferred compensation contributions made by the Employer to a
Section 401(k) Plan on behalf of the Participant. However, for
purposes of computing Code Section 415 annual additions,
deferred compensation contributions made by the Employer to a
Section 401(k) Plan on behalf of a Participant shall be
deducted from Total Compensation. In addition, Employer
contributions made on behalf of an Employee to a simplified
employee pension plan described in Code Section 408(k) are not
considered as compensation for the taxable year in which
contributed to the extent such contributions are deductible by
the Employee under Code Section 219(b)(7). Additionally, any
distributions from a Plan of deferred compensation are not
considered as compensation for Code Section 415 purposes,
regardless of whether such amounts are includable in the gross
income of the Employee when distributed. However, any amounts
received by an Employee pursuant to an unfunded non-qualified
Plan may be considered as compensation for Code Section 415
purposes in the year such amounts are includable in the gross
income of the Employee.
(ii) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture.
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option.
(iv) Other amounts which receive special tax benefits,
such as premiums for group term life insurance (but only to the
extent that the premiums are not includable in the gross income
of the Employee), or contributions made by the Employer
(whether or not under a salary reduction agreement) towards the
purchase of an annuity contract described in Code Section
403(b) (whether or not the contributions are excludable from
the gross income of the Employee).
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<PAGE>
(c) For Plan Years beginning after December 31, 1993, Total
Compensation in excess of $150,000 (as indexed) shall be disregarded for
all Participants. For purposes of this sub-section, the $150,000 limit
shall be referred to as the "applicable limit" for the Plan Year in
question. Such amount shall be adjusted in such manner as permitted under
Code Section 401(a)(17)(B), effective for the Plan Year which begins within
the applicable calendar year. For purposes of the applicable limit, Total
Compensation shall be prorated over short plan years. In determining the
Total Compensation of a Participant for purposes of the applicable limit,
the rules of Code Section 414(q)(6) shall apply, except as set forth in
Section 4.3 hereof. If as a result of the application of such rules, the
adjusted applicable limit is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each such
individual's Total Compensation, as determined under this Section prior to
the application of this limitation.
"TRUST" OR "TRUST FUND" means the trust fund created under this Plan.
"TRUST AGREEMENT" means the agreement between the Bank and the Trustee
concerning the Trust Fund. If any assets of the Trust Fund are held in a co-
mingled trust fund with assets of other qualified retirement plans, "Trust
Agreement" shall be deemed to include the trust agreement governing that co-
mingled trust fund. With respect to the allocation of investment responsibility
for the assets of the Trust Fund, the provisions of Article II of the Trust
Agreement are incorporated herein by reference.
"TRUSTEE" means one are more corporate persons or individuals selected from
time to time by the Bank to serve as trustee or co-trustees of the Trust Fund.
"UNALLOCATED STOCK FUND" means that portion of the Stock Fund consisting of
the Plan's holding of stock which have been acquired in exchange for one or more
Stock obligations and which have not yet been allocated to the Participant's
Accounts in accordance with Section 4.2.
"VALUATION DATE" means the last day of the Plan Year and each other date as
of which the committee shall determine the investment experience of the
Investment Fund and adjust the Participants' accounts accordingly.
"VALUATION PERIOD" means the period following a Valuation Date and ending
with the next Valuation Date.
"VESTING YEAR" means a unit of Service credited to a Participant pursuant
to Section 9.2 for purposes of determining his vested interest in his Account.
SECTION 3. ELIGIBILITY FOR PARTICIPATION.
-----------------------------
3.1 INITIAL ELIGIBILITY. An Employee shall enter the Plan as of the
-------------------
last Entry Date preceding the later of the following dates:
(a) the last day of the Employee's first Eligibility Year, and
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<PAGE>
(b) the Employee's 21st birthday. However, if an Employee is not
in active Service with an Employer on the date he would otherwise first
enter the Plan, his entry shall be deferred until the next day he is in
Service.
3.2 Definition of Eligibility Year. An "Eligibility Year" means an
------------------------------
applicable eligibility period (as defined below) in which the Employee has
completed 1,000 Hours of Service for the Employer. For this purpose:
(a) an Employee's first "eligibility period" is the 12-consecutive
month period beginning on the first day on which he has an Hour of Service,
and
(b) his subsequent eligibility periods will be 12-consecutive
month periods beginning on each January 1 after that first day of Service.
3.3 Terminated Employees. No Employee shall have any interest or rights
--------------------
under this Plan if he is never in active Service with an Employer on or after
the Effective Date.
3.4 Certain Employees Ineligible. No Employee shall participate in the
----------------------------
Plan while his Service is covered by a collective bargaining agreement between
an Employer and the Employee's collective bargaining representative if (i)
retirement benefits have been the subject of good faith bargaining between the
Employer and the representative and (ii) the collective bargaining agreement
does not provide for the Employee's participation in the Plan. No Employee shall
participate in the Plan while he is actually employed by a leasing organization
rather than an Employer.
3.5 Participation and Reparticipation. Subject to the satisfaction of
---------------------------------
the foregoing requirements, an Employee shall participate in the Plan during
each period of his Service from the date on which he first becomes eligible
until his termination. For this purpose, an Employee returning within five years
of his or her termination who previously satisfied the initial eligibility
requirements or returning after 5 consecutive one year Breaks in Service with a
vested account balance in the Plan shall re-enter the Plan as of the date of his
return to Service with an Employer.
3.6 Omission of Eligible Employee. If, in any Plan Year, any Employee
-----------------------------
who should be included as a Participant in the Plan is erroneously omitted and
discovery of such omission is not make until after a contribution by his
Employer for the year has been made, the Employer shall make a subsequent
contribution with respect to the omitted Employee in the amount which the said
Employer would have contributed shall be made regardless of whether or not it is
deductible in whole or in part in any taxable year under applicable provisions
of the Code.
3.7 Inclusion of Ineligible Employee. If, in any Plan Year, any person
--------------------------------
who should not have been included as a Participant in the Plan is erroneously
included and discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be entitled to
recover the contribution made with respect to the ineligible person regardless
of whether or not a deduction is allowable with respect to the ineligible person
shall constitute a Forfeiture for the Plan Year in which the discovery is made.
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<PAGE>
SECTION 4. CONTRIBUTIONS AND CREDITS.
-------------------------
4.1 DISCRETIONARY CONTRIBUTIONS. The Employer shall from time to time
---------------------------
contribute, with respect to a Plan Year, such amounts as it may determine from
time to time. The Employer shall have no obligation to contribute any amount
under this Plan except as so determined in its sole discretion. The Employer's
contributions and available forfeitures for a Plan Year shall be credited as of
the last day of the year to the Accounts of the Active Participants in
proportion to their amounts of Cash Compensation.
4.2 CONTRIBUTIONS FOR STOCK OBLIGATIONS. If the Trustee, upon
-----------------------------------
instructions from the Committee, incurs any Stock Obligation upon the purchase
of Stock, the Employer may contribute for each Plan Year an amount sufficient to
cover all payments of principal and interest as they come due under the terms of
the Stock Obligation. If there is more than one Stock Obligation, the Employer
shall designate the one to which any contribution is to be applied. Investment
earnings realized on Employer contributions and any dividends paid by the
Employer on Stock held in the Unallocated Stock Account, which earnings and
dividends shall be applied to the Stock Obligation related to that Stock.
In each Plan Year in which Employer contributions, earnings on
contributions, or dividends on unallocated Stock are used as payments under a
Stock Obligation, a certain number of shares of the Stock acquired with that
Stock Obligation which is then held in the Unallocated Stock Fund shall be
released for allocation among the Participants. The number of shares released
shall bear the same ratio to the total number of those shares then held in the
Unallocated Stock Fund (prior to the release) as (i) the principal and interest
payments made on the Stock Obligation in the current Plan Year bears to (ii) the
sum of (i) above, and the remaining principal and interest payments required (or
---
projected to be required on the basis of the interest rate in effect at the end
of the Plan Year) to satisfy the Stock Obligation.
At the direction of the Committee, the current and projected payments of
interest under a Stock Obligation may be ignored in calculating the number of
shares to be released in each year if (i) the Stock Obligation provides for
annual payments of principal and interest at a cumulative rate that is not less
rapid at any time than level annual payments of such amounts for 10 years, (ii)
the interest included in any payment is ignored only to the extent that it would
be determined to be interest under standard loan amortization tables, and (iii)
the term of the Stock Obligation, by reason of renewal, extension, or
refinancing, has not exceeded 10 years from the original acquisition of the
Stock.
For these purposes, each Stock Obligation, the Stock purchased with it, and
any dividends on such Stock, shall be considered separately. The Stock released
from the Unallocated Stock Fund in any Plan Year shall be credited as of the
last day of the year to the Accounts of the Active Participants in proportion to
their amounts of Cash Compensation.
4.3 DEFINITIONS RELATED TO CONTRIBUTIONS. For the purposes of this Plan,
the following terms have the meanings specified:
"ACTIVE PARTICIPANT" means a Participant who has satisfied the eligibility
requirements under Section 3 and who has at least 1000 Hours of Service during
the current Plan Year. However, a Participant shall not qualify as an Active
Participant unless (i) he is in active Service with an Employer as of the last
day of the Plan Year, or (ii) he is on a Recognized Absence as of that date, or
(iii) his Service terminated during the Plan Year by reason of Disability,
death, Early or Normal Retirement.
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<PAGE>
"CASH COMPENSATION" A Participant's Cash Compensation shall include base
salary and bonuses received by the Participating during the Plan Year, and shall
also include amounts contributed under a salary reduction agreement pursuant to
Section 401(k) or Section 125 of the Code.
In the event a Plan Year is a period of less than 12 months for any reason,
then Cash Compensation for the short period shall not exceed the pro rata
portion of this limit created by multiplying a fraction which is the number of
months in the short period divided by twelve times the annual compensation
limit.
In determining the Cash Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in applying
such rules, the term "family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not attained age 19 years
before the close of the year. If as a result of the application of such rules
the adjusted $150,000 limitation is exceeded, then the limitation shall be
prorated among the affected individuals in proportion to each individual's
compensation, as determined under this Section prior to the application of this
limitation.
4.4 CONDITIONS AS TO CONTRIBUTIONS. Employers' contributions shall in
------------------------------
all events be subject to the limitations set forth in Section 5. Contributions
may be made in the form of cash, or securities and other property to the extent
permissible under ERISA, including Stock, and shall be held by the Trustee in
accordance with the Trust Agreement. In addition to the provisions of Section
13.3 for the return of an Employer's contributions in connection with a failure
of the Plan to qualify initially under the Code, any amount contributed by an
Employer due to a good faith mistake of fact, or based upon a good faith but
erroneous determination of its deductibility under Section 404 of the Code,
shall be returned to the Employer within one year after the date on which the
contribution was originally made, or within one year after its nondeductibility
has been finally determined. However, the amount to be returned shall be reduced
to take account of any adverse investment experience within the Trust Fund in
order that the balance credited to each Participant's Account is not less that
it would have been if the contribution had never been made.
4.5 TRANSFERS. This plan shall accept direct and indirect transfers,
---------
including roll-over contributions from other tax-qualified plans, provided,
however, that this Plan shall not accept any direct or indirect transfers from
any other retirement plan that is tax-qualified under Section 401(a) of the Code
and which is subject to the survivor annuity requirements of section 401(a)(11)
and section 417 of the Code.
SECTION 5. LIMITATIONS ON CONTRIBUTIONS AND ALLOCATIONS.
--------------------------------------------
5.1 LIMITATION ON ANNUAL ADDITIONS. Notwithstanding anything herein to
------------------------------
the contrary, allocation of Employer contributions for any Plan Year shall be
subject to the following;
5.1-1 If allocation of Employer contributions in accordance with
Section 4.1 will result in an allocation of more than one-third the total
contributions for a Plan Year to the accounts of Highly Paid Employees,
then allocation of such amount shall be adjusted so that such excess will
not occur.
5.1-2 After adjustment, if any, required by the preceding
paragraph, the annual additions during any Plan Year to any Participant's
Account under this and any other defined contribution
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<PAGE>
plans maintained by the Employer or an affiliate (within the purview of
Section 414(b), (c) and (m) and Sections 415(h) of the Code, which
affiliate shall be deemed the Employer for this purpose) shall not exceed
the lesser of $30,000 (or such other dollar amount which results from cost-
of-living adjustments under Section 415(d) of the Code) or "25 percent of
the Participant's Total Compensation for such limitation year." In the
event that annual additions exceed the aforesaid limitations, they shall be
reduced in the following priority:
(i) If the Participant is covered by the Plan at the end of the
Plan Year, any excess amount at the end of Plan Year that cannot be
allocated to the Participant's account shall be used to reduce the
employer contribution for such Participant in the next limitation
year and any succeeding limitation years if necessary.
(ii) If the Participant is not covered by the Plan at the end of
the Plan Year, the excess amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future employer contributions for all remaining Participants in the
next limitation year and each succeeding limitation year if
necessary.
(iii) If a suspense account is in existence at any time during a
limitation year, it will not participate in any allocation of
investment gains and losses. All amounts held in suspense accounts
must be allocated to Participant's accounts before any contributions
may be made to the Plan for the limitation year.
(iv) If a suspense account exists at the time of plan
termination, amounts held in the suspense account that cannot be
allocated shall revert to the Employer.
5.1-3 For purposes of this Section 5.1 and the following Section
5.2, the "annual addition" to a Participant's accounts means the sum of (I)
employer contributions, (ii) employee contributions, if any, and (iii)
forfeitures. Annual additions to a defined contribution plan also include
amounts allocated, after March 31, 1984, to an individual medical account,
as defined in Section 415(1)(2) of the Internal Revenue Code, which is part
of a pension or annuity plan maintained by the Employer, amounts derived
from contributions paid or accrued after December 31, 1985, in taxable
years ending after such date, which are attributable to post-retirement
medical benefits allocated to the separate account of a Key Employee under
a welfare benefit fund, as defined in Section 419A(d) of the Internal
Revenue Code, maintained by the Employer. For these purposes, annual
additions to a defined contribution plan shall not include the allocation
of the excess amounts remaining in the Unallocated Stock Fund subsequent to
a sale of stock from such fund in accordance with a transaction described
in Section 8.1 of the Plan. The $30,000 limitations referred to shall, for
each limitation year ending after 1988, be automatically adjusted to the
new dollar limitations determined by the Commissioner of Internal Revenue
for the calendar year beginning in that limitation year.
5.1-4 Notwithstanding the foregoing, if no more than one-third of
the Employer Contributions to the Plan for a year which are deductible
under Section 404(a)(9) of the Code are allocated to Highly Paid Employees
(within the meaning of Section 414(q) of the Internal Revenue Code), the
limitations imposed herein shall not apply to:
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<PAGE>
(i) forfeitures of employer securities (within the meaning of
Section 409 of the Code) under the Plan if such securities were
acquired with the proceeds of a loan described in Section
404(a)(9)(A) of the Code), or
(ii) Employer Contributions to the Plan which are deductible
under Section 404(a)(9)(B) and charged against a Participant's
account.
5.1-5 If the Employer contributes amounts, on behalf of Employees
covered by this Plan, to other "defined contribution plans" as defined in
Section 3(34) of ERISA, the limitation on annual additions provided in this
Section shall be applied to annual additions in the aggregate to this Plan
and to such other plans. Reduction of annual additions, where required,
shall be accomplished first by reductions under such other plan pursuant to
the directions of the named Fiduciary for administration of such other
plans or under priorities, if any, established under the terms of such
other plans and then by allocating any remaining excess for this Plan in
the manner and priority set out above with respect to this Plan."
5.1-6 A limitation year shall mean each 12 consecutive month
period beginning each January 1.
5.2 COORDINATED LIMITATION WITH OTHER PLANS. Aside from the limitation
---------------------------------------
prescribed by Section 5.1 with respect to the annual addition to a Participant's
accounts for any single limitation year, if a Participant has ever participated
in one or more defined benefit plans maintained by an Employer or an affiliate,
then the accrued benefit shall be limited so that the sum of his defined plan
fraction and his defined contribution plan fraction does not exceed one. For
this purpose:
5.2-1 A Participant's defined contribution plan fraction with
respect to a Plan Year shall be a fraction, (i) the numerator of which is
the sum of the annual additions to his accounts through the current year,
and (ii) the denominator of which is the sum of the lesser of the following
amounts -A- and -B- determined for the current limitation year and each
prior limitation year of Service with an Employer: -A- is 1.25 times the
dollar limit in effect for the year under Section 415(c)(1)(A) of the Code,
or 1.0 times such dollar limitation if the Plan is top-heavy, and -B- is 35
percent of the Participant's Total Compensation for such year. Further, if
the Participant participated in any related defined contribution plan in
any years beginning before 1976, any-excess of the sum of the actual annual
additions to the Participant's accounts for those years over the maximum
annual additions which could have been made in accordance with Section 5.1
shall be ignored, and voluntary contributions by the Participant during
those years shall be taken into account as to each such year only to the
extent that his average annual voluntary contribution in those years
exceeded 10 percent of his average annual Total Compensation in those
years.
5.2-2 A Participant's defined benefit plan fraction with respect
to a limitation year shall be a fraction, (i) the numerator of which is his
projected annual benefit payable at normal retirement under the Employers'
defined benefit plans, and (ii) the denominator of which is the lesser of
(a) 1.25 times $90,000, or 1.0 times such dollar limitation if the Plan is
top-heavy, and (b) 1.4 times the Participant's average Total Compensation
during his highest-paid three consecutive limitations years.
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<PAGE>
5.3 EFFECT OF LIMITATIONS. The Committee shall take whatever action may
---------------------
be necessary from time to time to assure compliance with the limitations set
forth in Section 5.1 and 5.2. Specifically, the Committee shall see that each
Employer restrict its contributions for any Plan Year to an amount which,
taking into account the amount of available forfeitures, may be completely
allocated to the Participants consistent with those limitations. Where the
limitations would otherwise be exceeded by any Participant, further allocations
to the Participant shall be curtailed to the extent necessary to satisfy the
limitations. Where an excessive amount is contributed on account of a mistake as
to one or more Participants' compensation, or there is an amount of forfeitures
which may not be credited in the Plan Year in which it becomes available, the
amount shall be corrected in accordance with Section 5.1-2 of the Plan.
5.4 LIMITATIONS AS TO CERTAIN PARTICIPANTS. Aside from the limitations
--------------------------------------
set forth in Section 5.1 and 5.2, if the Plan acquires any Stock in a
transaction as to which a selling shareholder or the estate of a deceased
shareholder is claiming the benefit of Section 1042 of the Code, the Committee
shall see that none of such Stock, and no other assets in lieu of such Stock,
are allocated to the Accounts of certain Participants in order to comply with
Section 409(n) of the Code.
This restriction shall apply at all times to a Participant who owns (taking
into account the attribution rules under Section 318(a) of the Code, without
regard to the exception for employee plan trusts in Section 318(a)(2)(B)(i) more
than 25 percent of any class of stock of a corporation which issued the Stock
acquired by the Plan, or another corporation within the same controlled group,
as defined in Section 409(1)(4) of the Code (any such class of stock hereafter
called a "Related Class"). For this purpose, a Participant who owns more than 25
percent of any Related Class at any time within the one year preceding the
Plan's purchase of the Stock shall be subject to the restriction as to all
allocations of the Stock, but any other Participant shall be subject to the
restriction only as to allocations which occur at a time when he owns more than
25 percent of any Related Class.
Further, this restriction shall apply to the selling shareholder claiming
the benefit of Section 1042 and any other Participant who is related to such a
shareholder within the meaning of Section 267(b) of the Code, during the period
beginning on the date of sale and ending on the later of (1) the date that is
ten years after the date of sale, or (2) the date of the plan allocation
attributable to the final payment of acquisition indebtedness incurred in
connection with the sale.
This restriction shall not apply to any Participant who is a lineal
descendant of a selling shareholder if the aggregate amounts allocated under the
Plan for the benefit of all descendants do not exceed five percent of the Stock
acquired from the shareholder.
SECTION 6. TRUST FUND AND ITS INVESTMENT.
-----------------------------
6.1 CREATION OF TRUST FUND. All amounts received under the Plan from
----------------------
Employers and investments shall be held as the Trust Fund pursuant to the terms
of this Plan and of the Trust Agreement between the Bank and the Trustee. The
benefits described in this Plan shall be payable only from the assets of the
Trust Fund, and none of the Bank, any other Employer, its board of directors or
trustees, its stockholders, its officers, its employees, the Committee, and the
Trustee shall be liable for payment of any benefit under this Plan except from
the Trust Fund.
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<PAGE>
6.2 STOCK FUND AND INVESTMENT FUND. The Trust Fund held by the Trustee
------------------------------
shall be divided into the Stock Fund, consisting entirely of Stock, and the
Investment Fund, consisting of all assets of the Trust other than Stock. The
Trustee shall have no investment responsibility for the Stock Fund, but shall
accept any Employer contributions made in the form of Stock, and shall acquire,
sell, exchange, distribute, and otherwise deal with and dispose of Stock in
accordance with the instructions of the Committee. The Trustee shall have full
responsibility for the investment of the Investment Fund, except to the extent
such responsibility may be delegated from time to time to one or more investment
managers pursuant to Section 2.2 of the Trust Agreement.
6.3 ACQUISITION OF STOCK. From time to time the Committee may, in its
--------------------
sole discretion, direct the Trustee to acquire Stock from the issuing Employer
or from shareholders, including shareholders who are or have been Employees,
Participants, or fiduciaries with respect to the Plan. The Trustee shall pay for
such Stock no more than its fair market value, which shall be determined
conclusively by the Committee pursuant to Section 12.4. The Committee may direct
the Trustee to finance the acquisition of Stock by incurring or assuming
indebtedness to the seller or another party which indebtedness shall be called a
"Stock Obligation". The term "Stock Obligation" shall refer to a loan made to
the Plan by a disqualified person within the meaning of Section 4975(e)(2) of
the Code, or a loan to the Plan which is guaranteed by a disqualified person. A
Stock Obligation includes a direct loan of cash, a purchase-money transaction,
and an assumption of an obligation of a tax-qualified employee stock ownership
plan under Section 4975(e)(7) of the Code ("ESOP"). For these purposes, the term
"guarantee" shall include an unsecured guarantee and the use of assets of a
disqualified person as collateral for a loan, even though the use of assets may
not be a guarantee under applicable state law. An amendment of a Stock
Obligation in order to qualify as an "exempt loan" is not a refinancing of the
Stock Obligation or the making of another Stock Obligation. The term "exempt
loan" refers to a loan that satisfies the provisions of this paragraph. A "non-
exempt loan" fails to satisfy this paragraph. Any Stock Obligation shall be
subject to the following conditions and limitations:
6.3-1 A Stock Obligation shall be for a specific term, shall not be
payable on demand except in the event of default, and shall bear a
reasonable rate of interest.
6.3-2 A Stock Obligation may, but need not, be secured by collateral
pledge of either the Stock acquired in exchange for the Stock Obligation,
or the Stock previously pledged in connection with a prior Stock Obligation
which is being repaid with the proceeds of the current Stock Obligation. No
other assets of the Plan and Trust may be used as collateral for a Stock
Obligation, and no creditor under a Stock Obligation shall have any right
or recourse to any Plan and Trust assets other than Stock remaining subject
to a collateral pledge.
6.3-3 Any pledge of Stock to secure a Stock Obligation must provide
for the release of pledged Stock in connection with payments on the Stock
obligations in the ratio prescribed in Section 4.2.
6.3-4 Repayments of principal and interest on any Stock Obligation
shall be made by the Trustee only from Employer cash contributions
designated for such payments, from earnings on such contributions, and from
cash dividends received on Stock, in the last case, however, subject to the
further requirements of Section 7.2.
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<PAGE>
6.3-5 In the event of default of a Stock Obligation, the value of
plan assets transferred in satisfaction of the Stock Obligation must not
exceed the amount of the default. If the lender is a disqualified person
within the meaning of Section 4975 of the Code, a Stock Obligation must
provide for a transfer of plan assets upon default only and to the extent
of the failure of the plan to meet the payment schedule of said Stock
Obligation. For purposes of this paragraph, the making of a guarantee does
not make a person a lender."
6.4 PARTICIPANTS' OPTION TO DIVERSIFY. The Committee shall provide for
---------------------------------
a procedure under which each Participant may, during the qualified election
period, elect to "diversify" a portion of the Employer Stock allocated to his
Account, as provided in Section 401(a)(28)(B) of the Code. An election to
diversity must be made on the prescribed form and filed with the Committee
within the period specified herein. For each of the first five (5) Plan years in
the qualified election period, the Participant may elect to diversify an amount
which does not exceed 25% of the number of shares allocated to his Account since
the inception of the Plan, less than all shares with respect to which an
election under this Section has already been made. For the last year of the
qualified election period, the Participant may elect to have up to 50 percent of
the value of his Account committed to other investments, less all shares with
respect to which an election under this Section has already been made. The term
"qualified election period" shall mean the six (6) Plan Year period beginning
with the first Plan Year in which a Participant has both attained age 55 and
completed 10 years of participation in the Plan. A Participant's election to
diversify his Account may be made within each year of the qualified election
period and shall continue for the 90-day period immediately following the last
day of each year in the qualified election period. Once a Participant makes such
election, the Plan must complete diversification in accordance with such
election within 90 days after the end of the period during which the election
could be made for the Plan Year. In the discretion of the Committee, the Plan
may satisfy the diversification requirement by any of the following methods:
6.4-1 The Plan may distribute all or part of the amount subject to
the diversification election.
6.4-2 The Plan may offer the Participant at least three other
distinct investment options, if available under the Plan. The other
investment options shall satisfy the requirements of Regulations under
Section 404(c) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
6.4-3 The Plan may transfer the portion of the Participant's
Account subject to the diversification election to another qualified
defined contribution plan of the Employer that offers at least three
investment options satisfying the requirements of the Regulations under
Section 404(c) of ERISA.
SECTION 7. VOTING RIGHTS AND DIVIDENDS ON STOCK.
------------------------------------
7.1 VOTING AND TENDERING OF STOCK. The Trustee generally shall vote all
-----------------------------
shares of Stock held under the Plan in accordance with the written instructions
of the Committee. However, if any Employer has registration-type class of
securities within the meaning of Section 409(e)(4) of the Code, or if a matter
submitted to the holders of the Stock involves a merger, consolidation,
recapitalization, reclassification, liquidation, dissolution, or sale of
substantially all assets of an entity, then (i) the shares of Stock which have
been allocated to Participants' Accounts shall be voted by the Trustee in
accordance with the
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<PAGE>
Participant's written instructions, and (ii) the Trustee shall vote any
unallocated Stock and allocated Stock for which it has received no voting
instructions in the same proportions as it votes the allocated Stock for which
it has received instructions from Participants; provided, however, that if an
exempt loan, as defined in Section 4975(d) of the Code, is outstanding and the
Plan is in default on such exempt loan, as default is defined in the loan
documents, then to the extent that such loan documents require the lender to
exercise voting rights with respect to the unallocated shares, the loan
documents will prevail. In the event no shares of Stock have been allocated to
Participants' Accounts at the time Stock is to be voted and any exempt loan
which may be outstanding is not in default, each Participant shall be deemed to
have one share of Stock allocated to his or her account for the sole purpose of
providing the Trustee with voting instructions.
Notwithstanding any provision hereunder to the contrary, all unallocated
shares of Stock must be voted by the Trustee in a manner determined by the
Trustee to be for the exclusive benefit of the Participants and Beneficiaries.
Whenever such voting rights are to be exercised, the Employers shall provide the
Trustee, in a timely manner, with the same notices and other materials as are
provided to other holders of the Stock, which the Trustee shall distribute to
the Participants. The Participants shall be provided with adequate opportunity
to deliver their instructions to the Trustee regarding the voting of Stock
allocated to their Accounts. The instructions of the Participants' with respect
to the voting of allocated shares hereunder shall be confidential.
7.1-1 In the event of a tender offer, Stock shall be tendered by
the Trustee in the same manner as set forth above with respect to the
voting of Stock. Notwithstanding any provision hereunder to the contrary,
Stock must be tendered by the Trustee in a manner determined by the Trustee
to be for the exclusive benefit of the Participants and Beneficiaries.
7.2 DIVIDENDS ON STOCK. Dividends on Stock which are received by the
------------------
Trustee in the form of additional Stock shall be retained in the Stock Fund, and
shall be allocated among the Participant's Accounts and the Unallocated Stock
Fund in accordance with their holdings of the Stock on which the dividends have
been paid. Dividends on Stocks credited to Participants' Accounts which are
received by the Trustee in the form of cash shall, at the direction of the
Employer paying the dividends, either (i) be credited to the Accounts in
accordance with Section 8.3 and invested as part of the Investment Fund, (ii) be
distributed immediately to the Participants in proportion with the Participants'
Account balance (iii) be distributed to the Participants within 90 days of the
close of the Plan Year in which paid in proportion with the Participants'
Account balance or (iv) be used to make payments on an exempt loan. If dividends
allocated to a participant's account are used to repay an exempt loan, stock
with a fair market value equal to the dividends so used must be allocated to
such Participant's Account in lieu of the dividends. Dividends on Stock held in
the Unallocated Stock Fund which are received by the Trustee in the form of cash
shall be applied as soon as practicable to payments of principal and interest
under the Stock Obligation incurred with the purchase of the Stock.
SECTION 8 ADJUSTMENTS TO ACCOUNTS.
-----------------------
8.1 ADJUSTMENTS FOR TRANSACTIONS. An Employer contribution pursuant to
----------------------------
Section 4.1 shall be credited to the Participants' Accounts as of the last day
of the Plan Year for which it is contributed. Stock released from the
Unallocated Stock Fund upon the Trust's repayment of a Stock Obligation pursuant
to Section 4.2 shall be credited to the Participants' Accounts as of the last
day of the Plan Year in which the repayment occurred. Any excess amounts
remaining from the use of proceeds of a sale of Stock from
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<PAGE>
the Unallocated Stock Fund to repay a Stock Obligation shall be allocated as of
the last day of the Plan Year in which the repayment occurred among the
Participants' Accounts in proportion to the opening balance in each Account. Any
benefit which is paid to a Participant or Beneficiary pursuant to Section 10
shall be charged to the Participant's Account as of the first day of the
Valuation Period in which it is paid. Any forfeiture or restoral shall be
charged or credited to the Participant's Account as of the first day of the
Valuation Period in which the forfeiture or restoral occurs pursuant to Section
9.6.
8.2 VALUATION OF INVESTMENT FUND. As of each Valuation Date, the Trustee
----------------------------
shall prepare a balance sheet of the Investment Fund, recording each asset
(including any contribution receivable from an Employer) and liability at its
fair market value. Any liability with respect to short positions or options and
any item of accrued income or expense and unrealized appreciation or
depreciation shall be included; provided, however, that such an item may be
estimated or excluded if it is not readily ascertainable unless estimating or
excluding it would result in a material distortion. The Committee shall then
determine the net gain or loss of the Investment Fund since the preceding
Valuation Date, which shall mean the entire income of the Investment
Fund, including realized and unrealized capital gains and losses, net of any
expenses to be charged to the general Investment Fund and excluding any
contributions by the Employer. The determination of gain or loss shall be
consistent with the balance sheets of the Investment Fund of the current and
preceding Valuation Dates.
8.3 ADJUSTMENTS FOR INVESTMENT EXPERIENCE. Any net gain or loss of the
-------------------------------------
Investment Fund during a Valuation Period, as determined pursuant to Section
8.2, shall be allocated as of the last day of the Valuation Period among the
Participants' Accounts in proportion to the opening balance in each Account, as
adjusted for benefit payments and forfeitures during the Valuation Period,
without regard to whatever Stock may be credited to an Account.
SECTION 9. VESTING OF PARTICIPANTS' INTERESTS.
----------------------------------
9.1 DEFERRED VESTING IN ACCOUNTS. A Participant's vested interest in his
----------------------------
Account shall be based on his Vesting Years in accordance with the following
Table, subject to the balance of this Section 9.
<TABLE>
<CAPTION>
Vesting Percentage of
Years Interest Vested
------- ---------------
<S> <C>
Fewer than 5 0%
5 or more 100%
</TABLE>
9.2 COMPUTATION OF VESTING YEARS. For purposes of this Plan, a "Vesting
----------------------------
Year" means generally a calendar year in which an Employee has at least 1,000
Hours of Service, beginning with the first Plan Year in which the Employee has
completed an Hour of Service with the Employer, and including Service with other
employers as provided in the definition of "Service". Notwithstanding the above,
an Employee who was employed with Community Bank of Excelsior Springs, a
Missouri-chartered mutual savings bank (the "Mutual Bank") which is the
predecessor to the Bank, shall receive credit for vesting purposes for each
calendar year of employment with the Mutual Bank in which such Employee
completed 1,000 Hours of Service, not to exceed 5 years of credit for vesting
purpose (such years shall also be referred to as "Vesting Years"). However, a
Participant's Vesting Years shall be computed subject to the following
conditions and qualifications:
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9.2-1 A Participant's Vesting Years shall not include any Service
prior to the date on which an Employee attains age 18.
9.2-2 A Participant's vested interest in his Account accumulated
before five (5) consecutive Breaks in Service shall be determined without
regard to any Service after such five consecutive Breaks in Service.
Further, if a Participant has five (5) consecutive Breaks in Service before
his interest in his Account has become vested to some extent, pre-Break
years of Service shall not be required to be taken into account for
purposes of determining his post-Break vested percentage.
9.2-3 In the case of a participant who has 5 or more consecutive
1-year Breaks in Service, the participant's pre-break service will count in
vesting of the employer-derived post-break accrued benefit only if either:
(i) such Participant has any nonforfeitable interest in the
accrued benefit attributable to employer contributions at
the time of separation from service, or
(ii) upon returning to service the number of consecutive 1-year
Breaks in Service is less than the number of years of
service.
9.2-4 Unless otherwise specifically excluded, a Participant's
Vesting Years shall include any period of active military duty to the
extent required by the Military Selective Service Act of 1967 (38 U.S.C.
Section 2021).
9.3 FULL VESTING UPON CERTAIN EVENTS.
--------------------------------
9.3-1 Notwithstanding Section 9.1, a Participant's interest in his Account
shall fully vest on the Participant's Normal Retirement. The Participant's
interest shall also fully vest in the event that his Service is terminated by
Early Retirement, Disability or by death.
9.3-2 The Participant's interest in his Account shall also fully vest in
the event of a "Change in Control" of the Bank, or the Company. For these
purposes, "Change in Control" shall mean an event of a nature that; (i) would be
required to be reported in response to Item 1a of the current report on Form 8-
K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"); or (ii) results in a
Change in Control of the Bank or the Company within the meaning of the Bank
Holding Company Act of 1956, as amended, and applicable rules and regulations
promulgated thereunder as in effect at the time of the Change in Control
(collectively, the "BHCA"); or (iii) without limitation such a Change in Control
shall be deemed to have occurred at such time as (a) any "Person" (as the term
is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Bank or the Company representing 25% or more
of the Bank's or the Company's outstanding securities except for any securities
of the Bank purchased by the Company in connection with the conversion of the
Bank to the stock form and any securities purchased by the Bank's employee stock
ownership plan and trust; or (b) individuals who constitute the Board on the
date hereof (the "Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided, however, that this subsection (b) shall not apply
if the Incumbent Board is replaced by the appointment by a Federal banking
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<PAGE>
agency of a conservator or receiver for the Bank and, provided further that any
person becoming a director subsequent to the date hereof whose election was
approved by a vote of at least two-thirds of the directors comprising the
Incumbent Board or whose nomination for election by the Company's stockholders
was approved by the same Nominating Committee serving under an Incumbent Board,
shall be, for purposes of this clause (b), considered as though he were a member
of the Incumbent Board; or (c) a plan of reorganization, merger, consolidation,
sale of all or substantially all the assets of the Bank or the Company; or (d) a
proxy statement soliciting proxies from stockholders of the Company, by someone
other than the current management of the Company, seeking stockholder approval
of a plan of reorganization, merger or consolidation of the Company or Bank or
similar transaction with one or more corporations as a result of which the
outstanding shares of the class of securities then subject to such plan or
transaction are exchanged for or converted into cash or property or securities
not issued by the Bank or the Company shall be distributed and the requisite
number of proxies approving such plan or reorganization, merger or consolidation
of the Company or Bank are received and voted in favor of such transactions; or
(e) a tender offer is made for 25% or more of the outstanding securities of the
Bank or Company and shareholders owning beneficially or of record 25% or more of
the outstanding securities of the Bank or Company have tendered or offered to
sell their shares pursuant to such tender offer and such tendered shares have
been accepted by the tender offeror.
9.4 FULL VESTING UPON PLAN TERMINATION. Notwithstanding Section 9.1, a
----------------------------------
Participant's interest in his Account shall fully vest if he is in active
Service upon termination of this Plan or upon the permanent and complete
discontinuance of contributions by his Employer. In the event of a partial
termination, the interest of each affected Participant who is in Service shall
fully vest with respect to that part of the Plan which is terminated.
9.5 FORFEITURE, REPAYMENT, AND RESTORAL. If a Participant's Service
-----------------------------------
terminates before his interest in his Account is fully vested, that portion
which has not vested shall be forfeited if he either (i) receives a distribution
of his entire vested interest pursuant to Section 10.1, or (ii) incurs a Break
In Service. If a Participant's Service terminates prior to having any portion of
his Account become vested, such Participant shall be deemed to have received a
distribution of his vested interest as of the Valuation Date next following his
termination of Service.
If a Participant who has received his entire vested interest returns to
Service before he has five consecutive Breaks in Service, he may repay to the
Trustee an amount equal to the distribution. The Participant may repay such
amount at any time within five years after he has returned to Service. The
amount shall be credited to his account as of the last day of the Plan Year in
which it is repaid; an additional amount equal to that portion of his Account
which was previously forfeited shall be restored to his Account at the same time
from other Employees' forfeitures and, if such forfeitures are insufficient,
from a special contribution by his Employer for that year. A Participant who was
deemed to have received a distribution of his vested interest in the Plan shall
have his account restored as of the last day of the Plan Year after he performs
an Hour of Service.
9.6 ACCOUNTING FOR FORFEITURES. If a portion of a Participant's account
--------------------------
is forfeited, Stock allocated to said Participant's account shall be forfeited
only after other assets are forfeited. If interests in more than one class of
Stock have been allocated to a Participant's account, the Participant must be
treated as forfeiting the same proportion of each class of Stock. A forfeiture
shall be charged to the
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<PAGE>
Participant's Account as of the first day of the first Valuation Period in which
the forfeiture becomes certain pursuant to Section 9.5. Except as otherwise
provided in that Section, a forfeiture shall be added to the contributions of
the terminated Participant's Employer which are to be credited to other
Participants pursuant to Section 4.1 as of the last day of the Plan Year in
which the forfeiture becomes certain.
9.7 VESTING AND NONFORFEITABILITY. A Participant's interest in his
-----------------------------
Account which has become vested shall be nonforfeitable for any reason.
SECTION 10. PAYMENTS OF BENEFITS.
--------------------
10.1 BENEFITS FOR PARTICIPANTS. For a Participant whose Service ends for
-------------------------
any reason, distribution will be made to or for the benefit of the Participant
or, in the case of the Participant's death, his Beneficiary, by either, or a
combination of the following methods:
10.1.1 By payment in a lump sum, in accordance with Section 10.2;
or
10.1.2 By payment in a series of substantially equal annual
installments over a period not to exceed five (5) years, provided the
maximum period over which the distribution of a Participant's Account may
be made shall be extended by 1 year, up to five (5) additional years, for
each $100,000 (or fraction thereof) by which such Participant's Account
balance exceeds $500,000 (the aforementioned figures are subject to cost-
of-living adjustments prescribed by the Secretary of the Treasury pursuant
to Section 409(o)(2) of the Code).
The Participant shall elect the manner in which his vested Account balance
will be distributed to him. If a Participant so desires, he may direct how his
benefits are to be paid to his Beneficiary. If a deceased Participant did not
file a direction with the Committee, the Participant's benefits shall be
distributed to his Beneficiary in a lump sum. Notwithstanding the foregoing, if
the balance credited to his Account exceeds $3,500, his benefits shall not be
paid before the latest of his 65th birthday or the tenth anniversary of the year
in which he commenced participation in the Plan unless he elects an early
payment date in a written election filed with the Committee. A Participant may
modify such an election at any time, provided any new benefit payment date is at
least 30 days after a modified election is delivered to the Committee, subject
to the provisions of Section 10.11 hereof. In all events, a Participant's
benefits shall be paid by April 1st of the calendar year in which he reaches age
71-1/2.
10.2 TIME FOR DISTRIBUTION.
---------------------
10.2.1 Distribution of the balance of a Participant's Account
generally shall commence as soon as practicable after the last day of the
Plan Year next following his termination of Service for any reason, but no
later than one year after the close of the Plan Year:
(i) in which the Participant separates from service by
reason of Normal Retirement, Disability, or death; or
(ii) which is the fifth Plan Year following the year in
which the Participant resigns or is dismissed, unless he is reemployed
before such date.
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<PAGE>
10.2.2 Unless the Participant elects otherwise, the distribution of
the balance of a Participant's Accounts shall commence nor later than the 60th
day after the latest of the close of the plan year in which -
(i) the Participant attains the age of 65;
(ii) occurs the tenth anniversary of the year in which the
Participant commenced participation in the Plan; or
(iii) the participant terminates his service with the
Employer.
10.2.3 Notwithstanding any other provision in this Section 10.2 to
the contrary, distribution of a Participant's Account shall commence
(whether or not he remains in the employ of the Employer) not later than
the April 1 of the calendar year next following the calendar year in which
the Participant attains age 70 and 1/2 years. A Participant's benefit from
that portion of his Account committed to the Investment Fund shall be
calculated on the basis of the most recent Valuation Date before the date
of payment.
10.2.4 Distribution of a Participant's Account balance after his
death shall comply with the following requirements:
(i) If a Participant dies before his distributions have
commenced, distribution of his Account to his Beneficiary shall
commence not later than one year after the end of the Plan Year in
which the Participant died, however, if the Participant's Beneficiary
is his surviving spouse, distributions may commence on the date on
which the Participant would have attained age 70-1/2. In either case,
distributions shall be completed within five years after the they
commence.
(ii) If the Participant dies after distribution has
commenced pursuant to Section 10.1.2 but before his entire interest in
the Plan has been distributed to him, then the remaining portion of
that interest shall, in accordance with Section 401(a)(9) of the Code,
be distributed at least as rapidly as under the method of distribution
being used under Section 10.1.2 at the date of his death.
(iii) If a married Participant dies before his benefit
payments begin, then unless he has specifically elected otherwise the
Committee shall cause the balance in his Account to be paid to his
spouse. No election by a married Participant of a different
Beneficiary shall be valid unless the election is accompanied by the
Spouse's written consent, which (i) must acknowledge the effect of the
election, (ii) must explicitly provide either that the designated
Beneficiary may not subsequently be changed by the Participant without
the Spouse's further consent, or that it may be changed without such
consent, and (iii) must be witnessed by the Committee, its
representative, or a notary public. (This requirement shall not apply
if the Participant establishes to the Committee's satisfaction that
the Spouse may not be located.)
10.3 MARTIAL STATUS. The Committee shall from time to time take whatever
--------------
steps it deems appropriate to keep informed of each Participant's martial
status. Each Employer shall provide the
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<PAGE>
Committee with the most reliable information in the Employer's possession
regarding its Participants' marital status, and the Committee may, in its
discretion, require a notarized affidavit from any Participant as to his martial
status. The Committee, the Plan, the Trustee, and the Employers shall be fully
protected and discharged from any liability to the extent of any benefit
payments made as a result of the Committee's good faith and reasonable reliance
upon information obtained from a Participant and his Employer as to his martial
status.
10.4 DELAY IN BENEFIT DETERMINATION. If the Committee is unable to
------------------------------
determine the benefits payable to a Participant or Beneficiary on or before the
latest date prescribed for payment pursuant to Section 10.1 or 10.2, the
benefits shall in any event be paid within 60 days after they can first be
determined, with whatever makeup payments may be appropriate in view of the
delay.
10.5 ACCOUNTING FOR BENEFIT PAYMENTS. Any benefit payment shall be
-------------------------------
charged to the Participant's Account as of the first day of the Valuation Period
in which the payment is made.
10.6 OPTIONS TO RECEIVE AND SELL STOCK. Unless ownership of virtually all
---------------------------------
Stock is restricted to active Employees and qualified retirement plans for the
benefit of Employees pursuant to the certificates of incorporation or by-laws of
the Employers issuing Stock, a terminated Participant or the Beneficiary of a
deceased Participant may instruct the Committee to distribute the Participant's
entire vested interest in his Account in the form of Stock. In that event, the
Committee shall apply the Participant's vested interest in the Investment Fund
to purchase sufficient Stock from the Stock Fund or from any owner of stock to
make the required distribution. In all other cases, the Participant's vested
interest in the Stock Fund shall be distributed in shares of Stock, and his
vested interest in the Investment Fund shall be distributed in cash.
Any Participant who receives Stock pursuant to Section 10.1, and any person
who has received Stock from the Plan or from such a Participant by reason of the
Participant's death or incompetency, by reason of divorce or separation from the
Participant, or by reason of a rollover contribution described in Section
402(a)(5) of the Code, shall have the right to require the Employer which issued
the Stock to purchase the Stock for its current fair market value (hereinafter
referred to as the "put right"). The put right shall be exercisable by written
notice to the Committee during the first 60 days after the Stock is distributed
by the Plan, and, if not exercised in that period, during the first 60 days in
the following Plan Year after the Committee has communicated to the Participant
its determination as to the Stock's current fair market value. However, the put
right shall not apply to the extent that the Stock, at the time the put right
would otherwise be exercisable, may be sold on an established market in
accordance with federal and state securities laws and regulations. Similarly,
the put option shall not apply with respect to the portion of a Participant's
account which the employee elected to have reinvested under Code Section
401(a)(28)(B). If the put right is exercised, the Trustee may, if so directed by
the Committee in its sole discretion, assume the Employer's rights and
obligations with respect to purchasing the Stock. Notwithstanding anything
herein to the contrary, in the case of a plan established by a Bank (as defined
in Code Section 581), the put option shall not apply if prohibited by a federal
or state law and Participants are entitled to elect their benefits be
distributed in cash.
If a Participant elects to receive his distribution in the form of a lump
sum pursuant to Section 10.1.1 of the Plan, the Employer or the Trustee, as the
case may be, may elect to pay for the Stock in equal periodic installments, not
less frequently than annually, over a period not longer than five years from the
day after the put right is exercised, with adeqaute security and interest at a
reasonable rate on the
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<PAGE>
unpaid balance, all such terms to be set forth in a promissory note delivered to
the seller with normal terms as to acceleration upon any uncured default.
If a Participant elects to receive his distribution in the form of an
installment payment pursuant to Section 10.1.2 of the Plan, the Employer or the
Trustee, as the case may be, shall pay for the Stock distributed in the
installment distribution over a period which shall not exceed 30 days after the
exercise of the put right.
Nothing contained herein shall be deemed to obligate any Employer to
register any Stock under any federal or state securities law or to create or
maintain a public market to facilitate the transfer or disposition of any Stock.
The put right described herein may only be exercised by a person described in
the second preceding paragraph, and may not be transferred with any Stock to any
other person. As to all Stock purchased by the Plan in exchange for any Stock
Obligation, the put right shall be nonterminable. The put right for Stock
acquired through a Stock Obligation shall continue with respect to such Stock
after the Stock Obligation is repaid or the Plan ceases to be an employee stock
ownership plan.
10.7 RESTRICTIONS ON DISPOSITION OF STOCK. Except in the case of Stock
------------------------------------
which is traded on an established market, a Participant who receives Stock
pursuant to Section 10.1, and any person who has received Stock from the Plan or
from such a Participant by reason of the Participant's death or incompetency, by
reason of divorce or separation from the Participant, or by reason of a rollover
contribution described in Section 402(a)(5) of the Code, shall, prior to any
sale or other transfer of the Stock to any other person, first offer the stock
to the issuing Employer and to the Plan at the greater of (i) its current fair
market value, or (ii) the purchase price offered in good faith by an independent
third party purchaser. This restriction shall apply to any transfer, whether
voluntary, involuntary, or by operation of law, and whether for consideration or
gratuitous. Either the Employer or Trustee may accept the offer within 14 days
after it is delivered. Any Stock distributed by the Plan shall bear a
conspicuous legend describing the right of first refusal under this Section
10.7, as well as any other restrictions upon the transfer of the Stock imposed
by federal and state securities laws and regulations.
10.8 CONTINUING LOAN PROVISIONS: CREATIONS OF PROTECTIONS AND RIGHTS.
---------------------------------------------------------------
Except as otherwise provided in Sections 10.6 and 10.7 and this Section, no
shares of Employer Stock held or distributed by the Trustee may be subject to a
put, call or other option, or buy-sell arrangement. The provisions of this
Section shall continue to by applicable to such Stock even if the Plan ceases to
be an employee stock ownership plan under Section 4975(e)(7) of the Code.
10.9 DIRECT ROLLOVER OF ELIGIBLE DISTRIBUTION. A Participant or
----------------------------------------
distributee may elect, at the time and in the manner prescribed by the Trustee
or the Committee , to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the Participant or
distributee in a direct rollover.
10.9-1 An "eligible rollover" is any distribution that does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the Participant and the Participant's Beneficiary, or for a specified period
of ten years or more; any distribution to the extent such distribution is
required under Code Section 401(a)(9); and the
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<PAGE>
portion of any distribution that is not included in gross income
(determined without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
10.9-2 An "eligible retirement plan" is an individual retirement
account described in Code Section 401(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section 401(a), that accepts
the distributee's eligible rollover distribution. However, in the case of
an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual
retirement annuity.
10.9-3 A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
10.9-4 The term "distributee" shall refer to a deceased
Participant's spouse or a Participant's former spouse who is the alternate
payee under a qualified domestic relations order, as defined in Code
Section 414(p).
10.10 IN SERVICE DISTRIBUTION OF ROLL-OVER ACCOUNT. Upon the written
--------------------------------------------
election of a Participant delivered to the Committee, all or any portion of the
amounts held in the Participant's Roll-over Account, shall be distributed to the
Participant at any time within 30 days or as soon thereafter as is reasonably
practicable.
10.11 WAIVER OF 30 DAY PERIOD AFTER NOTICE OF DISTRIBUTION. If a
----------------------------------------------------
distribution is one to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days after the notice
required under Section 4.11(a)-11(c) of the Income Tax Regulations is given,
provided that:
(i) the Trustee or Administrative Committee, as
applicable, clearly informs the Participant that the
Participant has a right to a period of at least 30
days after receiving the notice to consider the
decision of whether or not to elect a distribution
(and, if applicable, a particular option), and
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
SECTION 11. RULES GOVERNING BENEFIT CLAIMS AND REVIEW OF APPEALS
----------------------------------------------------
11.1 CLAIM FOR BENEFITS. Any Participant or Beneficiary who qualifies for
------------------
the payment of benefits shall file a claim for his benefits with the Committee
on a form provided by the Committee. The claim, including any election of an
alternative benefit form, shall be filed at least 30 days before the date on
which the benefits are to begin. If a Participant or Beneficiary fails to file a
claim by the day before the date on which benefits become payable, he shall be
presumed to have filed a claim for payment for the Participant's benefits in the
standard form prescribed by Sections 10.1 or 10.2.
11.2 NOTIFICATION BY COMMITTEE. Within 90 days after receiving a claim
-------------------------
for benefits (or within 180 days, if special circumstances require an extension
of time and written notice of the extension is given to the Participant or
Beneficiary within 90 days after receiving the claim for benefits), the
Committee shall
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11.2
<PAGE>
notify the Participant or Beneficiary whether the claim has been approved or
denied. If the Committee denies a claim in any respect, the Committee shall set
forth in a written notice to the Participant or Beneficiary:
(i) each specific reason for the denial;
(ii) specific references to the pertinent Plan provisions on which
the denial is based;
(iii) a description of any additional material or information which
could be submitted by the Participant or Beneficiary to support his claim,
with an explanation of the relevance of such information; and
(iv) an explanation of the claims review procedures set forth in
Section 11.3.
11.3 CLAIMS REVIEW PROCEDURE. Within 60 days after a Participant or
-----------------------
Beneficiary receives notice from the Committee that his claim for benefits has
been denied in any respect, he may file with the Committee a written notice of
appeal setting forth his reasons for disputing the Committee's determination. In
connection with his appeal the Participant or Beneficiary or his representative
may inspect or purchase copies of pertinent documents and records to the extent
not inconsistent with other Participant's and Beneficiaries' rights of privacy.
Within 60 days after receiving a notice of appeal from a prior determination (or
within 120 days, if special circumstances require an extension of time and
written notice of the extension is given to the Participant or Beneficiary and
his representative within 60 days after receiving the notice of appeal), the
Committee shall furnish to the Participant or Beneficiary and his
representative, if any, a written statement of the Committee's final decision
with respect to his claim, including the reasons for such decision and the
particular Plan provisions upon which it is based.
SECTION 12. THE COMMITTEE AND ITS FUNCTIONS.
-------------------------------
12.1 AUTHORITY OF COMMITTEE. The Committee shall be the "plan
----------------------
administrator" within the meaning of ERISA and shall have exclusive
responsibility and authority to control and manage the operation and
administration of the Plan, including the interpretation and application of its
provisions, except to the extent such responsibility and authority are otherwise
specifically (i) allocated to the Bank, the Employers, or the Trustee under the
Plan and Trust Agreement, (ii) delegated in writing to other persons by the
Bank, the Employers, the Committee, or the Trustee, or (iii) allocated to other
parties by operation of law. The Committee shall have exclusive responsibility
regarding decisions concerning the payments of benefits under the Plan. The
Committee shall have no investment responsibility with respect to the Investment
Fund except to the extent, if any, specifically provided in the Trust Agreement.
In the discharge of its duties, the Committee may employ accountants, actuaries,
legal counsel, and other agents (who also may be employed by an Employer or the
Trustee in the same or some other capacity) and may pay their reasonable
expenses and compensation.
12.2 IDENTIFY OF COMMITTEE. The Committee shall consists of three or more
---------------------
individuals selected by the Bank. Any individual, including a director, trustee,
shareholder, officer, or employee of an Employer, shall be eligible to serve as
a member of the Committee. The Bank shall have the power to remove any
individual serving on the Committee at any time without cause upon 10 days
written notice,
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<PAGE>
and any individual may resign from the Committee at any time upon 10 days
written notice to the Bank. The Bank shall notify the Trustee of any change in
membership of the Committee.
12.3 DUTIES OF COMMITTEE. The Committee shall keep whatever records may
-------------------
be necessary to implement the Plan and shall furnish whatever reports may be
required from time to time by the Bank. The Committee shall furnish to the
Trustee whatever information may be necessary to properly administer the Trust.
The Committee shall see to the filing with the appropriate government agencies
of all reports and returns required of the plan Committee under ERISA and other
laws.
Further, the Committee shall have exclusive responsibility and authority
with respect to the Plan's holdings of Stock and shall direct the Trustee in all
respects regarding the purchase, retention, sale, exchange, and pledge of Stock
and the creation and satisfaction of Stock Obligations. The Committee shall at
all times act consistently with the Bank's long-term intention that the Plan, as
an Employee stock ownership plan, be invested primarily in Stock. Subject to
the direction of the Board as to the application of Employer contributions to
Stock Obligations, and subject to the provisions of Sections 6.4 and 10.6 as to
Participants' rights under certain circumstances to have their Accounts invested
in Stock or in assets other than Stock, the Committee shall determine in its
sole discretion the extent to which assets of the Trust shall be used to repay
Stock Obligations, to purchase Stock, or invest in other assets to be selected
by the Trustee or an investment manager. No provision of the Plan relating to
the allocation or vesting of any interests in the Stock Fund or the Investment
Fund shall restrict the Committee from changing any holdings of the Trust,
whether the changes involve an increase or a decrease in the Stock or other
assets credited to Participants' Accounts. In determining the proper extent of
the Trust's investment in Stock, the Committee shall be authorized to employ
investment counsel, legal counsel, appraisers, and other agents to pay their
reasonable expenses and compensation.
12.4 VALUATION OF STOCK. If the valuation of any Stock is not
------------------
established by reported trading on a generally recognized public market, the
Committee shall have the exclusive authority and responsibility to determine its
value for all purposes under the Plan. Such value shall be determined as of each
Valuation Date, and on any date as of which the Plan purchases or sells such
Stock. The Committee shall use generally accepted methods of valuing stock of
similar corporations for purposes of arm's length business and investment
transactions, and in this connection the Committee shall obtain, and shall be
protected in relying upon, the valuation of such Stock as determined by an
independent appraiser experienced in preparing valuations of similar business.
12.5 COMPLIANCE WITH ERISA. The Committee shall perform all acts
---------------------
necessary to comply with ERISA. Each individual member or employee of the
Committee shall discharge his duties in good faith and in accordance with the
applicable requirements of ERISA.
12.6 ACTION BY COMMITTEE. All actions of the Committee shall be governed
-------------------
by the affirmative vote of a number of members which is a majority of the total
number of members currently appointed, including vacancies. The members of the
Committee may meet informally and may take any action without meeting as a
group.
12.7 EXECUTION OF DOCUMENTS. Any instrument executed by the Committee
----------------------
shall be signed by any member or employee of the Committee.
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<PAGE>
12.8 ADOPTION OF RULES. The Committee shall adopt such rules and
-----------------
regulations of uniform applicability as it deems necessary or appropriate for
the proper administration and interpretation of the Plan.
12.9 RESPONSIBILITY TO PARTICIPANTS. The Committee shall determine which
------------------------------
Employees qualify to enter the Plan. The Committee shall furnish to each
eligible Employee whatever summary plan descriptions, summary annual reports,
and other notices and information may be required under ERISA. The Committee
also shall determine when a Participant or his Beneficiary qualifies for the
payment of benefits under the Plan. The Committee shall furnish to each such
Participant or Beneficiary whatever information is required under ERISA (or is
otherwise appropriate) to enable the Participant or Beneficiay to make whatever
elections may be available pursuant to Sections 6 and 10, and the Committee
shall provide for the payment of benefits in the proper form and amount from the
assets of the Trust Fund. The Committee may decide in its sole discretion to
permit modifications of elections and to defer or accelerate benefits to the
extent consistent with applicable law and the best interests of the individuals
concerned.
12.10 ALTERNATIVE PAYEES IN EVENT OF INCAPACITY. If the Committee finds
-----------------------------------------
at any time that an individual qualifying for benefits under this Plan is a
minor or is incompetent, the Committee may direct the benefits to be paid, in
the case of a minor, to his parents, his legal guardian, or a custodian for him
under the Uniform Gifts to Minors Act, or, in the case of an incompetent, to his
spouse, or his legal guardian, the payments to be used for the individual's
benefit. The Committee and the Trustee shall not be obligated to inquire as to
the actual use of the funds by the person receiving them under this Section
12.10, and any such payment shall completely discharge the obligations of the
Plan, the Trustee, the Committee, and the Employers to the extent of the
payment.
12.11 INDEMNIFICATION BY EMPLOYERS. Except as separately agreed in
----------------------------
writing, the Committee, and any member or employee of the Committee, shall be
indemnified and held harmless by the Employer, jointly and severally, to the
fullest extent permitted by the law against any and all costs, damages,
expenses, and liabilities reasonably incurred by or imposed upon it or him in
connection with any claim made against it or him or in which it or he may be
involved by reason of its or his being, or having been, the Committee, or a
member or employee of the Committee, to the extent such amounts are not paid by
insurance.
12.12 NONPARTICIPATION BY INTERESTED MEMBER. Any member of the Committee
-------------------------------------
who also is a Participant in the Plan shall take no part in any determination
specifically relating to his own participation or benefits, unless his
abstention would leave the Committee incapable of acting on the matter.
SECTION 13. ADOPTION, AMENDMENT, OR TERMINATION OF THE PLAN.
-----------------------------------------------
13.1 ADOPTION OF PLAN BY OTHER EMPLOYERS. With the consent of the Bank,
-----------------------------------
any entity may become a participating Employer under the Plan by (i) taking such
action as shall be necessary to adopt the Plan, (ii) becoming a party to the
Trust Agreement establishing the Trust Fund, and (iii) executing and delivering
such instruments and taking such other action as may be necessary or desirable
to put the Plan into effect with respect to the entity's Employees.
13.2 ADOPTION OF PLAN BY SUCCESSOR. In the event that any Employer shall
-----------------------------
be reorganized by way of merger, consolidation, transfer of assets or otherwise,
so that an entity other than an Employer shall succeed to all or substantially
all of the Employer's business, the successor entity may be substituted for
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<PAGE>
the Employer under the Plan by adopting the Plan and becoming a party to the
Trust Agreement. Contributions by the Employer shall be automatically suspended
from the effective date of any such reorganization until the date upon which the
substitution of the successor entity for the Employer under the Plan becomes
effective. If, within 90 days following the effective date of any such
reorganization, the successor entity shall not have elected to become a party to
the Plan, or if the Employer shall adopt a plan of complete liquidation other
than in connection with a reorganization, the Plan shall be automatically
terminated with respect to Employees of the Employer as of the close of business
on the 90th day following the effective date of the reorganization, or as of the
close of business on the date of adoption of a plan of complete liquidation, as
the case may be.
13.3 PLAN ADOPTION SUBJECT TO QUALIFICATION. Notwithstanding any other
--------------------------------------
provision of the Plan, the adoption of the Plan and the execution of the Trust
Agreement are conditioned upon their being determined initially by the Internal
Revenue Service to meet the qualification requirements of Section 401(a) of the
Code, so that the Employers may deduct currently for federal income tax purposes
their contributions to the Trust and so that the Participants may exclude the
contributions from their gross income and recognize income only when they
receive benefits. In the event that this Plan is held by the Internal Revenue
Service not to qualify initially under Section 401(a), the Plan may be amended
retroactively to the earliest date permitted by U.S. Treasury Regulations in
order to secure qualification under Section 401(a). If this Plan is held by the
Internal Revenue Service not to qualify initially under Section 401(a) either as
originally adopted or as amended, each Employer's contributions to the Trust
under this Plan (including any earnings thereon) shall be returned to it and
this Plan shall be terminated. In the event that this Plan is amended after its
initial qualification and the Plan as amended is held by the Internal Revenue
Service not to qualify under Section 401(a), the amendment may be modified
retroactively to the earliest date permitted by U.S. Treasury Regulations in
order to secure approval of the amendment under Section 401(a).
13.4 RIGHT TO AMEND OR TERMINATE. The Bank intends to continue this Plan
---------------------------
as a permanent program. However, each participating Employer separately reserves
the right to suspend, supersede, or terminate the Plan at any time and for any
reason, as it applies to that Employer's Employees, and the Bank reserves the
right to amend, suspend, supersede, merge, consolidate, or terminate the Plan at
any time and for any reason, as it applies to the Employees of each Employer. No
amendment, suspension, supersession, merger, consolidation, or termination of
the Plan shall (i) reduce any Participant's or Beneficiary's proportionate
interest in the Trust Fund, (ii) reduce or restrict, either directly or
indirectly, the benefit provided any Participant prior to the amendment, or
(iii) divert any portion of the Trust Fund to purposes other than the exclusive
benefit of the Participants and their Beneficiaries prior to the satisfaction of
all liabilities under the Plan. Moreover, there shall not be any transfer of
assets to a successor plan or merger or consolidation with another plan unless,
in the event of the termination of the successor plan or the surviving plan
immediately following such transfer, merger, or consolidation, each participant
or beneficiary would be entitled to a benefit equal to or greater than the
benefit he would have been entitled to if the plan in which he was previously a
participant or beneficiary had terminated immediately prior to such transfer,
merger, or consolidation. Following a termination of this Plan by the Bank, the
Trustee shall continue to administer the Trust and pay benefits in accordance
with the Plan as amended from time to time and the Committee's instructions.
If any amendment changes the vesting schedule, including an automatic
change to or from a top-heavy vesting schedule, any Participant with three (3)
or more Vesting Years may, by filing a written
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<PAGE>
request with the Employer, elect to have his vested percentage computed under
the vesting schedule in effect prior to the amendment. The election period must
begin not later than the later of sixty (60) days after the amendment is
adopted, the amendment becomes effective, or the Participant is issued written
notice of the amendment by the Employer or the Committee.
SECTION 14. MISCELLANEOUS PROVISIONS.
------------------------
14.1 PLAN CREATES NO EMPLOYMENT RIGHTS. Nothing in this Plan shall be
---------------------------------
interpreted as giving any Employee the right to be retained as an Employee by an
Employer, or as limiting or affecting the rights of an Employer to control its
Employees or to terminate the Service of any Employee at any time and for any
reason, subject to any applicable employment or collective bargaining
agreements.
14.2 NONASSIGNABILITY OF BENEFITS. No assignment, pledge, or other
----------------------------
anticipation of benefits from the Plan will be permitted or recognized by the
Employer, the Committee, or the Trustee. Moreover, benefits from the Plan shall
not be subject to attachment, garnishment, or other legal process for debts or
liabilities of any Participant or Beneficiary, to the extent permitted by law.
This prohibition on assignment or alienation shall apply to any judgment,
decree, or order (including approval of a property settlement agreement) which
relates to the provision of child support, alimony, or property rights to a
present or former spouse, child or other dependent of a Participant pursuant to
a State domestic relations or community property law, unless the judgment,
decree, or order is determined by the Committee to be a qualified domestic
relations order within order within the meaning of Section 414(p) of the Code,
as more fully set forth in Section 14.2 hereof.
14.3 LIMIT OF EMPLOYER LIABILITY. The liability of the Employer with
---------------------------
respect to Participants under this Plan shall be limited to making contributions
to the Trust from time to time, in accordance with Section 4.
14.4 TREATMENT OF EXPENSES. All expenses incurred by the Committee and
---------------------
the Trustee in connection with administering this Plan and Trust Fund shall be
paid by the Trustee from the Trust Fund to the extent the expenses have not been
paid or assumed by the Employer or by the Trustee.
14.5 NUMBER AND GENDER. Any use of the singular shall be interpreted to
-----------------
include the plural, and the plural the singular. Any use of the masculine,
feminine, or neuter shall be interpreted to include the masculine, feminine, or
neuter, as the context shall require.
14.6 NONDIVERSION OF ASSETS. Except as provided in Sections 5.3 and 13.3,
----------------------
under no circumstances shall any portion of the Trust Fund be diverted to or
used for any purpose other than the exclusive benefit of the Participants and
their Beneficiaries prior to the satisfaction of all liabilities under the Plan.
14.7 SEPARABILITY OF PROVISIONS. If any provision of this Plan is held to
--------------------------
be invalid or unenforceable, the other provisions of the Plan shall not be
affected but shall be applied as if the invalid or unenforceable provision had
not been included in the Plan.
14.8 SERVICE OF PROCESS. The agent for the service of process upon the
------------------
Plan shall be the president of the Bank, or such other person as may be
designated from time to time by the Bank.
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<PAGE>
14.9 GOVERNING STATE LAW. This Plan shall be interpreted in accordance
-------------------
with the laws of the State of Missouri to the extent those laws are applicable
under the provisions of ERISA.
14.10 EMPLOYER CONTRIBUTIONS CONDITIONED ON DEDUCTIBILITY. Employer
---------------------------------------------------
Contributions to the Plan are conditioned on deductibility under Code Section
404. In the event that the Internal Revenue Service shall determine that all or
any portion of an Employer Contribution is not deductible under that Section,
the nondeductible portion shall be returned to the Employer within one year of
the disallowance of the deduction.
14.11 UNCLAIMED ACCOUNTS. Neither the Employer nor the Trustees shall be
------------------
under any obligation to search for, or ascertain the whereabouts of, any
Participant or beneficiary. The Employer or the Trustees, by certified or
registered mail addressed to his last known address of record with the Employer,
shall notify any Participant or beneficiary that he is entitled to a
distribution under this Plan, and the notice shall quote the provisions of this
Section. If the Participant or beneficiary fails to claim his benefits or make
his whereabouts known in writing to the Employer of the Trustees within seven
(7) calendar years after the date of notification, the benefits of the
Participant or beneficiary under the Plan will be disposed of as follows:
(a) If the whereabouts of the Participant is unknown but the
whereabouts of the Participant's beneficiary is known to the Trustees,
distribution will be made to the beneficiary.
(b) If the whereabouts of the Participant and his beneficiary are
unknown to the Trustees, the plan will forfeit the benefit, provided that
the benefit is subject to a claim for reinstatement if the Participant or
Beneficiary make a claim for the forfeited benefit.
Any payment made pursuant to the power herein conferred upon the Trustees
shall operate as a complete discharge of all obligations of the Trustees, to the
extent of the distributions so made.
14.12 QUALIFIED DOMESTIC RELATIONS ORDER. Section 14.2 shall not apply to
----------------------------------
a "qualified domestic relations order" defined in Code Section 414(p), and such
other domestic relations orders permitted to be so treated by Administrator
under the provisions of the Retirement Equity Act of 1984. Further, to the
extent provided under a "qualified domestic relations order", a former spouse of
a Participant shall be treated as the spouse or surviving spouse for all
purposes under the Plan.
In the case of any domestic relations order received by the Plan:
(a) The Employer or the Plan Committee shall promptly notify the
Participant and any other alternate payee of the receipt of such order and
the Plan's procedures for determining the qualified status of domestic
relations orders, and
(b) Within a reasonable period after receipt of such order, the
Employer or the Plan Committee shall determine whether such order is a
qualified domestic relations order and notify the Participant and each alternate
payee of such determination. The Employer of the Plan Committee shall establish
reasonable procedures to determine the qualified status of domestic relations
orders and to administer distributions under such qualified orders.
-31-
<PAGE>
During any period in which the issue of whether a domestic relations order
is a qualified domestic relations order is being determined (by the Employer or
Plan Committee, by a court of competent jurisdiction, or otherwise), the
Employer or the Plan Committee shall segregate in a separate account in the Plan
or in an escrow account the amounts which would have been payable to the
alternate payee during such period if the order had been determined to be a
qualified domestic relations order. If within eighteen (18) months the order (or
modification thereof) is determined to be a qualified domestic relations order,
the Employer or the Plan Committee shall pay the segregate amounts (plus any
interest thereon) to the person or persons entitled thereto. If within eighteen
(18) months it is determined that the order is not a qualified domestic
relations order, or the issue as to whether such order is a qualified domestic
relations order is not resolved, then the Employer or the Plan Committee shall
pay the segregated amounts (plus any interest thereon) to the person or persons
who would have been entitled to such amounts if there had been no order. Any
determination that an order is a qualified domestic relations order which is
made after the close of the eighteen (18) month period shall be applied
prospectively only. The term "alternate payee" means any spouse, former spouse,
child or other dependant of a Participant who is recognized by a domestic
relations order as having a right to receive all, or a portion of, the benefit
payable under a Plan with respect to such Participant.
SECTION 15. TOP-HEAVY PROVISIONS.
--------------------
15.1 TOP-HEAVY PLAN. For any Plan Year beginning after December
--------------
31, 1983, this Plan is top-heavy if any of the following conditions exist:
(a) If the top-heavy ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any required aggregation group or permissive
aggregation group;
(b) If this Plan is a part of a required aggregation group (but
is not part of a permissive aggregation group) and the aggregate top-heavy ratio
for the group of Plans exceeds sixty percent (60%); or
(c) If this Plan is a part of a required aggregation group and
part of a permissive aggregation group and the aggregate top-heavy ratio for the
permissive aggregation group exceeds sixty percent (60%).
15.2 SUPER TOP-HEAVY PLAN. For any Plan Year beginning after December
--------------------
31, 1983, this Plan will be a super top-heavy Plan if any of the following
conditions exist:
(a) If the top-heavy ratio for this Plan exceeds ninety percent
(90%) and this Plan is not part of any required aggregation group or permissive
aggregation group.
(b) If this Plan is a part of a required aggregation group (but
is not part of a permissive aggregation group) and the aggregate top-heavy ratio
for the group of Plans exceeds ninety percent (90%), or
(c) If this Plan is a part of a required aggregation group and
part of a permissive aggregation group and the aggregate top-heavy ratio for the
permissive aggregation group exceeds ninety percent (90%).
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<PAGE>
15.3 DEFINITIONS.
-----------
In making this determination, the Committee shall use the following definitions
and principles:
15.3-1 The "Determination Date", with respect to the first Plan
Year of any plan, means the last day of that Plan Year, and with respect to
each subsequent Plan Year, means the last day of the preceding Plan Year.
If any other plan has a Determination Date which differs from this Plan's
Determination Date, the top-heaviness of this Plan shall be determined on
the basis of the other plan's Determination Date falling within the same
calendar years as this Plan's Determination Date.
15.3-2 A "Key Employee", with respect to a Plan Year, means an
Employee who at any time during the five years ending on the top-heavy
Determination Date for the Plan Year has received compensation from an
Employer and has been (i) an officer of the Employer having Total
Compensation greater than 50 percent of the limit then in effect under
Section 415(b)(1)(A) of the Code, (ii) one of the 10 Employees owning the
largest interests in the Employer having Total Compensation greater than
the limit then in effect under Section 415(c)(1)(A), (iii) an owner of more
than five percent of the outstanding equity interest or the outstanding
voting interest in any Employer, or (iv) an owner of more than one percent
of the outstanding equity interest or the outstanding voting interest in an
Employer whose Total Compensation exceeds $150,000. In determining which
individuals are Key Employees, the rules of Section 415(i) of the Code and
Treasury Regulations promulgated thereunder shall apply. The Beneficiary of
a Key Employee shall also be considered a Key Employee.
15.3-3 A "Non-key Employee" means an Employee who at any time
during the five years ending on the top-heavy Determination Date for the
Plan Year has received compensation from an Employer and who has never been
a Key Employee, and the Beneficiary of any such Employee.
15.3-4 A "required aggregation group" includes (a) each qualified
Plan of the Employer in which at least one Key Employee participates in the
Plan Year containing the Determination Date and any of the four (4)
preceding Plan Years, and (b) any other qualified Plan of the Employer
which enables a Plan described in (a) to meet the requirements of Code
Sections 401(a)(4) and 410. For purposes of the preceding sentence, a
qualified Plan of the Employer includes a terminated Plan maintained by the
Employer within the five (5) year period ending on the Determination Date.
In the case of a required aggregation group, each Plan in the group will be
considered a top-heavy Plan if the required aggregation group is a top-
heavy group. No Plan in the required aggregation group will be considered a
top-heavy Plan if the required aggregation group is not a top-heavy group.
All Employers aggregated under Code Sections 414(b), (c) or (m) or (o) (but
only after the Code Section 414(o) regulations becomes effective) are
considered a single Employer.
15.3-5 A "permissive aggregation group" includes the required
aggregation group of Plans plus any other qualified Plan(s) of the Employer
that are not required to be aggregated but which, when considered as a
group with the required aggregation group, satisfy the requirements of Code
Sections 401(a)(4) and 410 and are comparable to the Plans in the required
aggregation group. No Plan in the permissive aggregation group will be
considered a top-heavy Plan if the permissive
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<PAGE>
aggregation group is not a top-heavy group. Only a Plan that is part of the
required aggregation group will be considered a top-heavy Plan if the
permissive aggregation group is top-heavy.
15.4 TOP-HEAVY RULES OF APPLICATION.
------------------------------
For purposes of determining the value of account balances and the
present value of accrued benefits the following provisions shall apply:
15.4-1 The value of account balances and the present value of
accrued benefits will be determined as of the most recent valuation date
that falls within or ends with the twelve (12) month period ending on the
Determination Date.
15.4-2 For purposes of testing whether this Plan is top-heavy, the
present value of an individual's accrued benefits and an individual's
account balances is counted only once each year.
15.4-3 The account balances and accrued benefits of a Participant
who is not presently a Key Employee but who was a Key Employee in a Plan
Year beginning on or after January 1, 1984 will be disregarded.
15.4-4 For years beginning after December 31, 1984, non-deductible
Voluntary Employee Contributions will be taken into account for purposes of
computing the top-heavy ratio. Employer contributions attributable to a
salary reduction or similar arrangement will be taken into account.
15.4-5 When aggregating Plans, the value of account balances and
accrued benefits will be calculated with reference to the Determination
Dates that fall within the same calendar year.
15.4-6 The present value of the accrued benefits or the amount of
the account balances of an Employee shall be increased by the aggregate
distributions made to such Employee from a Plan of the Employer. No
distribution, however, made from the Plan to an individual (other than the
beneficiary of a deceased Employee who was an Employee within the five (5)
year period ending on the Determination Date) who has not been an Employee
at any time during the five (5) year period ending on the Determination
Date shall be taken into account in determining whether the Plan is top-
heavy. Also, any amounts recontributed by an Employee upon becoming a
Participant in the Plan shall no longer be counted as a distribution under
this Paragraph.
15.4-7 The present value of the accrued benefits or the amount of
the account balances of an Employee shall be increased by the aggregate
distributions made to such Employee from a terminated Plan of the Employer,
provided that such Plan (if not terminated) would have been required to be
included in the aggregation group.
15.4-8 Accrued benefits and account balances of an individual shall
not be taken into account for purposes of determining the top-heavy ratios
if the individual has performed no services for the Employer during the
five (5) year period ending on the applicable Determination Date.
Compensation for purposes of this subparagraph shall not include any
payments made to an individual by the Employer pursuant to a qualified or
non-qualified deferred compensation plan.
15.4-9 The present value of the accrued benefits or the amount of
the account balances of any Employee participating in this Plan shall not
include any rollover contributions or other
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<PAGE>
transfers voluntarily initiated by the Employee except as described below.
If a rollover was received by this Plan after December 31, 1983, the
rollover or transfer voluntarily initiated by the Employee was received
prior to January 1, 1984, then the rollover or transfer shall be considered
as part of the accrued benefit by the Plan receiving such rollover or
transfer. If this Plan transfers or rolls over funds to another Plan in a
transaction voluntarily initiated by the Employee after December 31, 1983,
then this Plan shall count the distribution for purposes of determining
account balances or the present value of accrued benefits. A transfer
incident to a merger or consolidation of two or more Plans of the Employer
(including Plans of related Employers treated as a single Employer under
Code Section 414), or a transfer or rollover between Plans of the Employer,
shall not be considered as voluntarily initiated by the Employee.
15.5 TOP-HEAVY RATIO.
---------------
If the Employer maintains one (1) or more defined contribution plans
(including any simplified Employee pension plan) and the Employer has never
maintained any defined benefit plans which have covered or could cover a
Participant in this Plan, the top-heavy ratio is a fraction, the numerator of
which is the sum of the account balances of all Key Employees as of the
Determination Date, and the denominator of which is the sum of the account
balances of all Employees as of the Determination Date. Both the numerator and
denominator of the top-heavy ratio shall be increased to reflect any
contribution which is due unpaid as of the Determination Date.
If the Employer maintains one (1) or more defined contribution plans
(including any simplified Employee pension plan) and the Employer maintains or
has maintained one (1) or more defined benefit plans which have covered or could
cover a Participant in this Plan, the top-heavy ratio is a fraction, the
numerator of which is the sum of account balances under the defined contribution
plans for all Key Employees and the present value of accrued benefits under the
defined benefit plans for all Key Employees, and the denominator of which is the
sum of the account balances under the defined contribution plans for all
Employees and the present value of accrued benefits under the defined benefit
plans for all Employees.
15.6 MINIMUM CONTRIBUTIONS. For any Top-Heavy Year, each Employer shall
---------------------
make a special contribution on behalf of each Participant to the extent that the
total allocations to his Account pursuant to Section 4 is less than the lesser
of:
(i) three percent of his Total Compensation for that year, or
(ii) the highest ratio of such allocation to Total Compensation
received by any Key Employee for that year. For purposes of the special
contribution of this Section 15.2, a Key Employee's Total Compensation
shall include amounts the Key Employee elected to defer under a qualified
401(k) arrangement. Such a special contribution shall be made on behalf of
each Participant who is employed by an Employer on the last day of the Plan
Year, regardless of the number of his Hours of Service, and shall be
allocated to his Account.
For any Plan Year when (1) the Plan is top-heavy and (2) a Non-Key Employee
is a Participant in both this Plan and a defined benefit plan included in the
plan aggregation group which is top heavy, the sum of the Employer contributions
and forfeitures allocated to the Account of each such Non-key Employee shall be
equal to at least five percent (5%) of such Non-key Employee's Total
Compensation for that year.
-35-
<PAGE>
15.7 MINIMUM VESTING. If a Participant's vested interest in his Account
---------------
is to be determined in a Top-Heavy Year, it shall be based on the following
"top-heavy table":
Vesting Percentage of
Years Interest Vested
------- ---------------
Fewer than 3 years 0%
3 or more 100%
15.8 TOP-HEAVY PROVISIONS CONTROL IN TOP-HEAVY PLAN. In the event this
----------------------------------------------
Plan becomes top-heavy and a conflict arises between the top-heavy provisions
herein set forth and the remaining provisions set forth in this Plan, the
top-heavy provisions shall control.
-36-
<PAGE>
Exhibit 10.5
COMMUNITY BANK OF EXCELSIOR SPRINGS
DIRECTOR EMERITUS AGREEMENT
THIS AGREEMENT is made this 24th day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Edgar Radley (the
"Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide Director Emeritus benefits to the
Director. The Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51 % or more of
the Company's outstanding voting common stock followed within twelve (12)
months by termination of the Director's status as a member of the Company's
Board of Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as
amended. References to a Code section shall be deemed to be to that section
as it now exists and to any successor provision.
<PAGE>
1.1.3 "Disability" means, if the Director is covered by a
Company-sponsored disability insurance policy, total disability as defined
in such policy without regard to any waiting period. If the Director is not
covered by such a policy, Disability means the Director suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Director from performing
substantially all of the normal duties of a director. As a condition to any
benefits, the Company may require the Director to submit to such physical
or mental evaluations and tests as the Company's Board of Directors deems
appropriate.
1.1.4 "Plan Year" means twelve months ending on ______________.
1.1.5 "Normal Retirement Date" means the Director attaining age
75.
1.1.6 "Termination of Service" means the Director's ceasing to
be a member of the Company's Board of Directors for any reason whatsoever.
ARTICLE 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Director terminates service on
or after the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.l.
2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
$671.
2.1.2. Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Retirement Date and continuing for 119 additional months.
2.2 Early Retirement Benefit. If the Director terminates service
before the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.2.
2.2.1 Amount of Benefit The benefit under this Section 2.2 is
the benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing for 119
additional months.
2.3 Disability Benefit. If the Director terminates service for
Disability prior to the Normal - Retirement Date, the Company shall pay to the
Director the benefit described in this Section 2.3.
2
<PAGE>
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is
the benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing until the
earlier of (a) the Director's recovery from the Disability, or (b) 119
months.
2.4 Change of Control Benefit. Upon a Change of Control while the Director
is in the active service of the Company, the Company shall pay to the Director
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is
the benefit determined under Schedule A, Column A, based on the date of the
Director's Termination of Service.
2.4.2 Payment of Benefit. The Company shall pay the benefit to
the Director in a lump sum within 60 days after the Change of Control.
ARTICLE 3
DEATH BENEFITS
3.1 There are no Death Benefits arising from this agreement. Upon the Death
of the Director, the Company shall be relieved of any obligations or duties
contained herein. Neither the Director's estate nor his heirs or assigns shall
receive any Benefits on or after the Director's Death.
ARTICLE 4
BENEFICIARIES
4.1 No beneficiary designations are required nor permitted because no
benefits will survive the Director's death.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280 G of the Code.
5.2 Termination for Cause. If the Company terminates the Director's service
for:
5.2.1 Gross negligence or gross neglect of duties;
3
<PAGE>
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse financial effect on the
Company.
5.4 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
4
<PAGE>
ARTICLE 7
AMENDMENTS AND TERMINATION
The Company may amend or terminate this Agreement at any time if,
pursuant to legislative, judicial or regulatory action, continuation of the
Agreement would (i) cause benefits to be taxable to the Director prior to actual
receipt, or (ii) result in significant financial penalties or other
significantly detrimental ramifications to the Company (other than the financial
impact of paying the benefits). In the event of any such amendment or
termination, the Director shall be 100% vested in the benefit determined under
Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Director and the
Company. and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Company, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Director's life is a general
asset of the Company to which the Director and beneficiary have no preferred or
secured claim.
5
<PAGE>
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
Community Bank of Excelsior Springs
/s/ Edgar Radley By: /s/ Larry E. Hermreck
- ------------------------ -------------------------------
Edgar Radley
Title: Chief Executive Officer
----------------------------
6
<PAGE>
Schedule "A"
Edgar Radley
<TABLE>
<CAPTION>
Plan
Year-End Monthly
Accrual Retirement/Disability
Plan Year Balance Benefit
<S> <C> <C>
1 $ 4,935 $ 61
2 10,306 128
3 16,151 200
4 22,513 279
5 29,438 365
6 36,975 458
7 45,178 560
8 54,106 671
</TABLE>
<PAGE>
Beneficiary Designation
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Shirley R. Radley
----------------------------
Contingent: To be divided equally among my three children, Larry L. Radley,
---------------------------------------------------------------
Ramona R. Lewis, Joan M. Martin
- -------------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ E. L. Radley
--------------------------
Date April 28, 1995
-------------------------------
Accepted by the Company this _____ day of __________, 199__.
By ________________________________
Title ______________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
DIRECTOR EMERITUS AGREEMENT
THIS AGREEMENT is made this 24th day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Cecil Lamb (the
"Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide Director Emeritus benefits to the
Director. The Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51 % or more of
the Company's outstanding voting common stock followed within twelve (12)
months by termination of the Director's status as a member of the Company's
Board of Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Director is covered by a
Company-sponsored disability insurance policy, total disability as defined
in such policy without regard to any waiting period. If the Director is not
covered by such a policy, Disability means the Director suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Director from performing
substantially all of the normal duties of a director. As a condition to any
benefits, the Company may require the Director to submit to such physical
or mental evaluations and tests as the Company's Board of Directors deems
appropriate.
1.1.4 "Plan Year" means twelve months ending on ______________.
1.1.5 "Normal Retirement Date" means the Director attaining age
75.
1.1.6 "Termination of Service" means the Director's ceasing to be
a member of the Company's Board of Directors for any reason whatsoever.
<PAGE>
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If the Director terminates service on or
after the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.l.
2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
$525.
2.1.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Retirement Date and continuing for 119 additional months.
2.2 Early Retirement Benefit. If the Director terminates service before the
Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Director the benefit described in this Section 2.2.
2.2.1 Amount of Benefit The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing for 119
additional months.
2.3 Disability Benefit. If the Director terminates service for Disability
prior to the Normal - Retirement Date, the Company shall pay to the Director the
benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is
the benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing until the
earlier of (a) the Director's recovery from the Disability, or (b) 119
months.
2.4 Change of Control Benefit. Upon a Change of Control while the Director
is in the active service of the Company, the Company shall pay to the Director
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is
the benefit determined under Schedule A, Column A, based on the date of the
Director's Termination of Service.
2
<PAGE>
2.4.2 Payment of Benefit. The Company shall pay the benefit to
the Director in a lump sum within 60 days after the Change of Control.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1. Amount of Benefit. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1 calculated as if the date of the Director's death were the Normal
Retirement Date.
3.1.2. Payment of Benefit. The Company shall pay the benefit to
the Beneficiary on the first day of each month commencing with the month
following the Director's death and continuing for 119 additional months.
3.2 Death During Benefit Period. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have paid to the
Director had the Director survive.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and accepted by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director, or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's surviving spouse, if any, and if none,
to the Director's surviving children and the descendants of any deceased child
by right of representation, and if no children or descendants survive, to the
Director's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
ARTICLE 5
GENERAL LIMITATIONS
3
<PAGE>
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code.
5.2 Termination for Cause. If the Company terminates the Director's service
for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse financial effect on the
Company.
5.4 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position
4
<PAGE>
to the Company orally or in writing, and the beneficiary (or counsel) shall have
the right to review the pertinent documents. The Company shall notify the
beneficiary of its decision in writing within the sixty-day period, stating
specifically the basis of its decision, written in a manner calculated to be
understood by the beneficiary and the specific provisions of the Agreement on
which the decision is based. If, because of the need for a hearing, the sixty-
day period is not sufficient, the decision may be deferred for up to another
sixty-day period at the election of the Company, but notice of this deferral
shall be given to the beneficiary.
ARTICLE 7
AMENDMENTS AND TERMINATION
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Director prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Director shall be 100% vested in the benefit determined under Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Director and the Company.
and their beneficiaries, survivors, executors, administrators and transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Company, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Director's life is a general
asset of the Company to which the Director and beneficiary have no preferred or
secured claim.
5
<PAGE>
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
Community Bank of Excelsior Springs
/s/ Cecil Lamb By: /s/ Larry E. Hermreck
- ---------------------- ---------------------------
Cecil Lamb
Title: Chief Executive Officer
-----------------------
6
<PAGE>
Schedule "A"
Cecil Lamb
<TABLE>
<CAPTION>
Plan
Year-End Monthly
Accrual Retirement/Disability
Plan Year Balance Benefit
<S> <C> <C>
1 $ 3,274 $ 41
2 6,837 85
3 10,716 133
4 14,937 185
5 19,531 242
6 24,531 304
7 29,973 372
8 35,897 445
9 42,344 525
</TABLE>
<PAGE>
AMENDMENT
Amendment to application of 0008912336
name of insured Cecil E. Lamb
of Excelsior Springs, MO
bearing date of February 24, 1995
SINGLE PREMIUM DEPOSIT IS DETERMINED TO BE $105,000.00.
CONTRACT ISSUED AS A SPECIAL CLASS.
CONTRACT ISSUED WITH FACE AMOUNT OF $50,000.
I hereby agree that the above statement or statements shall be a part of my
application above referred to just as fully as though made in said application.
/s/ Cecil Lamb
-------------------------------------
Signature of Insured
/s/ Larry Hermreck, CEO
-------------------------------------
Signature of Applicant/Owner
(If other than Insured)
Signed this 24th day of February 1995 in the presence of
_____________________________________
Agent
<PAGE>
a Beneficiary Designation
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Patricia L. Lamb
----------------------------
Contingent: Lance H. Lamb - James D. Lamb - Amalie S. Dysar - Divided Equally
-----------------------------------------------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Cecil E. Lamb
--------------------------------
Date _____________________________________
Accepted by the Company this _____ day of __________, 199__.
By _______________________________________
Title ___________________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
DIRECTOR EMERITUS AGREEMENT
THIS AGREEMENT is made this 24th day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Robert Lee Lalumondier
(the "Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide Director Emeritus benefits to the
Director. The Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51 % or more of
the Company's outstanding voting common stock followed within twelve (12)
months by termination of the Director's status as a member of the Company's
Board of Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Director is covered by a
Company-sponsored disability insurance policy, total disability as defined
in such policy without regard to any waiting period. If the Director is not
covered by such a policy, Disability means the Director suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Director from performing
substantially all of the normal duties of a director. As a condition to any
benefits, the Company may require the Director to submit to such physical
or mental evaluations and tests as the Company's Board of Directors deems
appropriate.
1.1.4 "Plan Year" means twelve months ending on ______________.
1.1.5 "Normal Retirement Date" means the Director attaining age
75.
1.1.6 "Termination of Service" means the Director's ceasing to be
a member of the Company's Board of Directors for any reason whatsoever.
<PAGE>
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If the Director terminates service on or
after the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.l.
2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
$642.
2.1.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Retirement Date and continuing for 119 additional months.
2.2 Early Retirement Benefit. If the Director terminates service before the
Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Director the benefit described in this Section 2.2.
2.2.1 Amount of Benefit The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.2.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing for 119
additional months.
2.3 Disability Benefit. If the Director terminates service for Disability
prior to the Normal - Retirement Date, the Company shall pay to the Director the
benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is
the benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.3.2 Payment of Benefit. The Company shall pay the benefit to
the Director on the first day of each month commencing with the month
following the Director's Termination of Service and continuing until the
earlier of (a) the Director's recovery from the Disability, or (b) 119
months.
2.4 Change of Control Benefit. Upon a Change of Control while the Director
is in the active service of the Company, the Company shall pay to the Director
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is
the benefit determined under Schedule A, Column A, based on the date of the
Director's Termination of Service.
2
<PAGE>
2.4.2 Payment of Benefit. The Company shall pay the benefit to
the Director in a lump sum within 60 days after the Change of Control.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1. Amount of Benefit. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1 calculated as if the date of the Director's death were the Normal
Retirement Date.
3.1.2. Payment of Benefit. The Company shall pay the benefit to
the Beneficiary on the first day of each month commencing with the month
following the Director's death and continuing for 119 additional months.
3.2 Death During Benefit Period. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have paid to the
Director had the Director survive.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Director shall designate a beneficiary by
filing a written designation with the Company. The Director may revoke or modify
the designation at any time by filing a new designation. However, designations
will only be effective if signed by the Director and accepted by the Company
during the Director's lifetime. The Director's beneficiary designation shall be
deemed automatically revoked if the beneficiary predeceases the Director, or if
the Director names a spouse as beneficiary and the marriage is subsequently
dissolved. If the Director dies without a valid beneficiary designation, all
payments shall be made to the Director's surviving spouse, if any, and if none,
to the Director's surviving children and the descendants of any deceased child
by right of representation, and if no children or descendants survive, to the
Director's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
3
<PAGE>
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280 G of the Code.
5.2 Termination for Cause. If the Company terminates the Director's service
for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any
law or significant Company policy committed in connection with the
Director's service and resulting in an adverse financial effect on the
Company.
5.4 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific
4
<PAGE>
reasons which the beneficiary believes entitle him or her to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Company of the petition, the Company shall afford the beneficiary (and counsel,
if any) an opportunity to present his or her position to the Company orally or
in writing, and the beneficiary (or counsel) shall have the right to review the
pertinent documents. The Company shall notify the beneficiary of its decision in
writing within the sixty-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the beneficiary and
the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty-day period is not sufficient, the
decision may be deferred for up to another sixty-day period at the election of
the Company, but notice of this deferral shall be given to the beneficiary.
ARTICLE 7
AMENDMENTS AND TERMINATION
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Director prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Director shall be 100% vested in the benefit determined under Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Director and the Company.
and their beneficiaries, survivors, executors, administrators and transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Company, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits
5
<PAGE>
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any
insurance on the Director's life is a general asset of the Company to which the
Director and beneficiary have no preferred or secured claim.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
Community Bank of Excelsior Springs
/s/ Robert Lee Lalumondier By: /s/ Larry E. Hermreck
- -------------------------------- ---------------------------------
Robert Lee Lalumondier
Title: Chief Executive Officer
------------------------------
6
<PAGE>
Schedule "A"
Robert Lee Lalumondier
<TABLE>
<CAPTION>
Plan
Year-End Monthly
Accrual Retirement/Disability
Plan Year Balance Benefit
<S> <C> <C>
1 $1,030 $13
2 2,151 27
3 3,371 42
4 4,699 58
5 6,145 76
6 7,718 96
7 9,430 117
8 11,293 140
9 13,322 165
10 15,529 193
11 17,932 222
12 20,547 255
13 23,393 290
14 26,491 328
15 29,862 370
16 33,532 416
17 37,526 465
18 41,873 519
19 46,604 578
20 51,753 642
</TABLE>
<PAGE>
AMENDMENT
Amendment to application of 0008912378
name of insured Robert Lee Lalumondier
of Holt, MO
bearing date of February 24, 1995
SINGLE PREMIUM DEPOSIT IS DETERMINED TO BE $45,000.00.
CONTRACT ISSUED WITH FACE AMOUNT OF $100,000.00
I hereby agree that the above statement or statements shall be a part of my
application above referred to just as fully as though made in said application.
/s/ Robert Lee Lalumondier
------------------------------------
Signature of Insured
/s/ Larry Hermreck, CEO
------------------------------------
Signature of Applicant/Owner
(If other than Insured)
Signed this 24th day of February 1995 in the presence of
____________________________________
Agent
<PAGE>
Beneficiary Designation
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Carolyn Louise Lalumondier
---------------------------------
Contingent: Gina Dianne Lalumondier
------------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Robert L. Lalumondier
--------------------------------
Date _____________________________________
Accepted by the Company this _____ day of __________, 199__.
By ___________________________________
Title ___________________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
DIRECTOR EMERITUS AGREEMENT
THIS AGREEMENT is made this 24th day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Robert McCrorey (the
"Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide Director Emeritus benefits to the
Director. The Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51 % or more of the
Company's outstanding voting common stock followed within twelve (12)
months by termination of the Director's status as a member of the Company's
Board of Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Director is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Director is not covered
by such a policy, Disability means the Director suffering a sickness,
accident or injury which, in the judgment of a physician satisfactory to
the Company, prevents the Director from performing substantially all of the
normal duties of a director. As a condition to any benefits, the Company
may require the Director to submit to such physical or mental evaluations
and tests as the Company's Board of Directors deems appropriate.
1.1.4 "Plan Year" means twelve months ending on ______________.
1.1.5 "Normal Retirement Date" means the Director attaining age 75.
1.1.6 "Termination of Service" means the Director's ceasing to be a
member of the Company's Board of Directors for any reason whatsoever.
<PAGE>
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If the Director terminates service on
or after the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.l.
2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
$1,225.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Retirement Date and continuing for 119 additional months.
2.2 Early Retirement Benefit. If the Director terminates service before
the Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Director the benefit described in this Section 2.2.
2.2.1 Amount of Benefit The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Director's Termination of Service and continuing for 119 additional
months.
2.3 Disability Benefit. If the Director terminates service for Disability
prior to the Normal - Retirement Date, the Company shall pay to the Director the
benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Director's Termination of Service and continuing until the earlier of
(a) the Director's recovery from the Disability, or (b) 119 months.
2.4 Change of Control Benefit. Upon a Change of Control while the
Director is in the active service of the Company, the Company shall pay to the
Director the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Director's Termination of Service.
2
<PAGE>
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days after the Change of Control.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1. Amount of Benefit. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1 calculated as if the date of the Director's death were the Normal
Retirement Date.
3.1.2. Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Director's death and continuing for 119 additional months.
3.2 Death During Benefit Period. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have paid to the
Director had the Director survive.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Director shall designate a beneficiary
by filing a written designation with the Company. The Director may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Director and accepted by
the Company during the Director's lifetime. The Director's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Director, or if the Director names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Director dies without a valid beneficiary
designation, all payments shall be made to the Director's surviving spouse, if
any, and if none, to the Director's surviving children and the descendants of
any deceased child by right of representation, and if no children or descendants
survive, to the Director's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
3
<PAGE>
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an
excess parachute payment under Section 280 G of the Code.
5.2 Termination for Cause. If the Company terminates the Director's
service for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy committed in connection with the Director's
service and resulting in an adverse financial effect on the Company.
5.4 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific
4
<PAGE>
reasons which the beneficiary believes entitle him or her to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Company of the petition, the Company shall afford the beneficiary (and counsel,
if any) an opportunity to present his or her position to the Company orally or
in writing, and the beneficiary (or counsel) shall have the right to review the
pertinent documents. The Company shall notify the beneficiary of its decision in
writing within the sixty-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the beneficiary and
the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty-day period is not sufficient, the
decision may be deferred for up to another sixty-day period at the election of
the Company, but notice of this deferral shall be given to the beneficiary.
ARTICLE 7
AMENDMENTS AND TERMINATION
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Director prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Director shall be 100% vested in the benefit determined under Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Director and the
Company. and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Company, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits
5
<PAGE>
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any
insurance on the Director's life is a general asset of the Company to which the
Director and beneficiary have no preferred or secured claim.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
COMMUNITY BANK OF EXCELSIOR SPRINGS
/s/ Robert McCrorey By: /s/ Larry E. Hermreck
- -------------------------- -------------------------------------
Robert McCrorey
Title: Chief Executive Officer
----------------------------------
6
<PAGE>
Schedule "A"
Robert McCrorey
<TABLE>
<CAPTION>
Plan
Year-End Monthly
Accrual Retirement/Disability
Plan Year Balance Benefit
<S> <C> <C>
1 $1,774 $22
2 3,705 46
3 5,807 72
4 8,095 100
5 10,584 131
6 13,294 165
7 16,243 201
8 19,453 241
9 22,947 285
10 26,750 332
11 30,888 383
12 35,393 439
13 40,296 500
14 45,632 566
15 51,439 638
16 57,760 716
17 64,640 801
18 72,128 894
19 80,278 995
20 89,148 105
21 98,802 225
</TABLE>
<PAGE>
AMENDMENT
Amendment to application of 0008912365
name of insured Robert E. McCrorey
of Excelsior Springs, MO
bearing date of February 24, 1995
SINGLE PREMIUM DEPOSIT IS DETERMINED TO BE $80,000.00.
CONTRACT ISSUED WITH FACE AMOUNT OF $100,000.
I hereby agree that the above statement or statements shall be a part of my
application above referred to just as fully as though made in said application.
/s/ Robert E. McCrorey
----------------------------------------
Signature of Insured
/s/ Larry E. Hermreck
----------------------------------------
Signature of Applicant/Owner
(If other than Insured)
Signed this 24th day of February 1995 in the presence of
________________________________________
Agent
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Sarah Jane McCrorey
------------------------------
Contingent: Alice M. McCrorey
---------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Robert E. McCrorey
-----------------------------
Date April 28, 1995
----------------------------------
Accepted by the Company this _____ day of __________, 199__.
By _________________________________
Title _________________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
DIRECTOR EMERITUS AGREEMENT
THIS AGREEMENT is made this 24th day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Rodney Rounkles (the
"Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide Director Emeritus benefits to the
Director. The Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51 % or more of the
Company's outstanding voting common stock followed within twelve (12)
months by termination of the Director's status as a member of the Company's
Board of Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Director is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Director is not covered
by such a policy, Disability means the Director suffering a sickness,
accident or injury which, in the judgment of a physician satisfactory to
the Company, prevents the Director from performing substantially all of the
normal duties of a director. As a condition to any benefits, the Company
may require the Director to submit to such physical or mental evaluations
and tests as the Company's Board of Directors deems appropriate.
1.1.4 "Plan Year" means twelve months ending on ______________.
1.1.5 "Normal Retirement Date" means the Director attaining age 75.
1.1.6 "Termination of Service" means the Director's ceasing to be a
member of the Company's Board of Directors for any reason whatsoever.
<PAGE>
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If the Director terminates service on or
after the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.l.
2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
$817.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Retirement Date and continuing for 119 additional months.
2.2 Early Retirement Benefit. If the Director terminates service before
the Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Director the benefit described in this Section 2.2.
2.2.1 Amount of Benefit The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Director's Termination of Service and continuing for 119 additional
months.
2.3 Disability Benefit. If the Director terminates service for Disability
prior to the Normal - Retirement Date, the Company shall pay to the Director the
benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Director's Termination of Service and continuing until the earlier of
(a) the Director's recovery from the Disability, or (b) 119 months.
2.4 Change of Control Benefit. Upon a Change of Control while the
Director is in the active service of the Company, the Company shall pay to the
Director the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Director's Termination of Service.
<PAGE>
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days after the Change of Control.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1. Amount of Benefit. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1 calculated as if the date of the Director's death were the Normal
Retirement Date.
3.1.2. Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Director's death and continuing for 119 additional months.
3.2 Death During Benefit Period. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have paid to the
Director had the Director survive.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Director shall designate a beneficiary
by filing a written designation with the Company. The Director may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Director and accepted by
the Company during the Director's lifetime. The Director's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Director, or if the Director names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Director dies without a valid beneficiary
designation, all payments shall be made to the Director's surviving spouse, if
any, and if none, to the Director's surviving children and the descendants of
any deceased child by right of representation, and if no children or descendants
survive, to the Director's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
3
<PAGE>
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an
excess parachute payment under Section 280 G of the Code.
5.2 Termination for Cause. If the Company terminates the Director's
service for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy committed in connection with the Director's
service and resulting in an adverse financial effect on the Company.
5.4 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific
4
<PAGE>
reasons which the beneficiary believes entitle him or her to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Company of the petition, the Company shall afford the beneficiary (and counsel,
if any) an opportunity to present his or her position to the Company orally or
in writing, and the beneficiary (or counsel) shall have the right to review the
pertinent documents. The Company shall notify the beneficiary of its decision in
writing within the sixty-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the beneficiary and
the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty-day period is not sufficient, the
decision may be deferred for up to another sixty-day period at the election of
the Company, but notice of this deferral shall be given to the beneficiary.
ARTICLE 7
AMENDMENTS AND TERMINATION
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Director prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Director shall be 100% vested in the benefit determined under Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Director and the
Company. and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Company, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits
5
<PAGE>
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any
insurance on the Director's life is a general asset of the Company to which the
Director and beneficiary have no preferred or secured claim.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
Community Bank of Excelsior Springs
/s/ Rodney Rounkles By: /s/ Larry E. Hermreck
- --------------------------- ----------------------------------------------
Rodney Rounkles
Title: Chief Executive Officer
-------------------------------------------
6
<PAGE>
Schedule "A"
Rodney Rounkles
<TABLE>
<CAPTION>
Plan
Year-End Monthly
Accrual Retirement/Disability
Plan Year Balance Benefit
<S> <C> <C>
1 $1,620 $20
2 3,384 42
3 5,303 66
4 7,392 92
5 9,666 120
6 12,140 151
7 14,834 184
8 17,765 220
9 20,956 260
10 24,428 303
11 28,208 350
12 32,321 401
13 36,798 456
14 41,671 517
15 46,975 582
16 52,747 654
17 59,030 732
18 65,868 817
</TABLE>
<PAGE>
AMENDMENT
Amendment to application of 0008912352
name of insured Rodney Gene Rounkles
of Excelsior Springs, MO
bearing date of February 24, 1995
SINGLE PREMIUM DEPOSIT IS DETERMINED TO BE $65,000.00.
CONTRACT ISSUED WITH FACE AMOUNT OF $135,000.
I hereby agree that the above statement or statements shall be a part of my
application above referred to just as fully as though made in said application.
/s/ Rodney G. Rounkles
----------------------------------------
Signature of Insured
/s/ Larry E. Hermreck, CEO
----------------------------------------
Signature of Applicant/Owner
(If other than Insured)
Signed this 24th day of February 1995 in the presence of
________________________________________
Agent
<PAGE>
Beneficiary Designation
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Judith K. Rounkles
--------------------------
Contingent: Jill D. Talley and Julie L. Henderson (Divided Equally)
-------------------------------------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Rodney G. Rounkles
------------------------------
Date ___________________________________
Accepted by the Company this _____ day of __________, 199__.
By _____________________________________
Title _________________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
DIRECTOR EMERITUS AGREEMENT
THIS AGREEMENT is made this 24th day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Richard Cox (the
"Director").
INTRODUCTION
To encourage the Director to remain a member of the Company's Board of
Directors, the Company is willing to provide Director Emeritus benefits to the
Director. The Company will pay the benefits from its general assets.
AGREEMENT
The Director and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51 % or more of the
Company's outstanding voting common stock followed within twelve (12)
months by termination of the Director's status as a member of the Company's
Board of Directors.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Director is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Director is not covered
by such a policy, Disability means the Director suffering a sickness,
accident or injury which, in the judgment of a physician satisfactory to
the Company, prevents the Director from performing substantially all of the
normal duties of a director. As a condition to any benefits, the Company
may require the Director to submit to such physical or mental evaluations
and tests as the Company's Board of Directors deems appropriate.
1.1.4 "Plan Year" means twelve months ending on ______________.
1.1.5 "Normal Retirement Date" means the Director attaining age 75.
1.1.6 "Termination of Service" means the Director's ceasing to be a
member of the Company's Board of Directors for any reason whatsoever.
<PAGE>
ARTICLE 2
LIFETIME BENEFITS
2.1 Normal Retirement Benefit. If the Director terminates service on or
after the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Director the benefit described in this
Section 2.l.
2.1.1. Amount of Benefit. The benefit under this Section 2.1 is
$817.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Retirement Date and continuing for 119 additional months.
2.2 Early Retirement Benefit. If the Director terminates service before
the Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Director the benefit described in this Section 2.2.
2.2.1 Amount of Benefit The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Director's Termination of Service and continuing for 119 additional
months.
2.3 Disability Benefit. If the Director terminates service for Disability
prior to the Normal - Retirement Date, the Company shall pay to the Director the
benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Director's Termination of Service.
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Director on the first day of each month commencing with the month following
the Director's Termination of Service and continuing until the earlier of
(a) the Director's recovery from the Disability, or (b) 119 months.
2.4 Change of Control Benefit. Upon a Change of Control while the
Director is in the active service of the Company, the Company shall pay to the
Director the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Director's Termination of Service.
2
<PAGE>
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Director in a lump sum within 60 days after the Change of Control.
ARTICLE 3
DEATH BENEFITS
3.1 Death During Active Service. If the Director dies while in the active
service of the Company, the Company shall pay to the Director's beneficiary the
benefit described in this Section 3.1.
3.1.1. Amount of Benefit. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Director under Section
2.1 calculated as if the date of the Director's death were the Normal
Retirement Date.
3.1.2. Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Director's death and continuing for 119 additional months.
3.2 Death During Benefit Period. If the Director dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Director's
beneficiary at the same time and in the same amounts they would have paid to the
Director had the Director survive.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Director shall designate a beneficiary
by filing a written designation with the Company. The Director may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Director and accepted by
the Company during the Director's lifetime. The Director's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Director, or if the Director names a spouse as beneficiary and the marriage
is subsequently dissolved. If the Director dies without a valid beneficiary
designation, all payments shall be made to the Director's surviving spouse, if
any, and if none, to the Director's surviving children and the descendants of
any deceased child by right of representation, and if no children or descendants
survive, to the Director's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
3
<PAGE>
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code.
5.2 Termination for Cause. If the Company terminates the Director's
service for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy committed in connection with the Director's
service and resulting in an adverse financial effect on the Company.
5.4 Suicide. No benefits shall be payable if the Director commits suicide
within two years after the date of this Agreement, or if the Director has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Director's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific
4
<PAGE>
reasons which the beneficiary believes entitle him or her to benefits or to
greater or different benefits. Within sixty (60) days after receipt by the
Company of the petition, the Company shall afford the beneficiary (and counsel,
if any) an opportunity to present his or her position to the Company orally or
in writing, and the beneficiary (or counsel) shall have the right to review the
pertinent documents. The Company shall notify the beneficiary of its decision in
writing within the sixty-day period, stating specifically the basis of its
decision, written in a manner calculated to be understood by the beneficiary and
the specific provisions of the Agreement on which the decision is based. If,
because of the need for a hearing, the sixty-day period is not sufficient, the
decision may be deferred for up to another sixty-day period at the election of
the Company, but notice of this deferral shall be given to the beneficiary.
ARTICLE 7
AMENDMENTS AND TERMINATION
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Director prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Director shall be 100% vested in the benefit determined under Schedule A.
ARTICLE 8
MISCELLANEOUS
8.1 Binding Effect. This Agreement shall bind the Director and the
Company. and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not a contract for
services. It does not give the Director the right to remain a director of the
Company, nor does it interfere with the Shareholders' rights to replace the
Director. It also does not require the Director to remain a director nor
interfere with the Director's right to terminate service at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America
8.6 Unfunded Arrangement. The Director and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits
5
<PAGE>
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors. Any
insurance on the Director's life is a general asset of the Company to which the
Director and beneficiary have no preferred or secured claim.
IN WITNESS WHEREOF, the Director and a duly authorized Company officer have
signed this Agreement.
DIRECTOR: COMPANY:
Community Bank of Excelsior Springs
/s/ Richard Cox By: /s/ Larry E. Hermreck
- ------------------------- ------------------------------------------
Richard Cox
Title: Chief Executive Officer
---------------------------------------
6
<PAGE>
Schedule "A"
Richard Cox
<TABLE>
<CAPTION>
Plan
Year-End Monthly
Accrual Retirement/Disability
Plan Year Balance Benefit
<S> <C> <C>
1 $682 $8
2 1,424 18
3 2,231 28
4 3,111 39
5 4,067 50
6 5,109 63
7 6,242 77
8 7,475 93
9 8,818 109
10 10,279 127
11 11,870 147
12 13,600 169
13 15,484 192
14 17,535 217
15 19,767 245
16 22,196 275
17 24,839 308
18 27,717 344
19 30,848 382
20 34,257 425
21 37,966 471
22 42,004 521
23 46,399 575
24 51,182 635
25 56,388 699
26 62,053 769
27 68,220 846
</TABLE>
<PAGE>
AMENDMENT
Amendment to application of 0008912310
name of insured Richard N. Cox
of Excelsior Springs, MO
bearing date of February 24, 1995
SINGLE PREMIUM DEPOSIT IS DETERMINED TO BE $105,000.00.
CONTRACT ISSUED AS A SPECIAL CLASS.
CONTRACT ISSUED WITH FACE AMOUNT OF $50,000.
I hereby agree that the above statement or statements shall be a part of my
application above referred to just as fully as though made in said application.
/s/ Richard N. Cox
----------------------------------------
Signature of Insured
Larry E. Hermreck, CEO
----------------------------------------
Signature of Applicant/Owner
(If other than Insured)
Signed this 24th day of February 1995 in the presence of
________________________________________
Agent
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Mary A. Cox (wife)
------------------------
Contingent: Lisa A. Hall (daughter)
-----------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Richard N. Cox
-------------------------------
Date May 2, 1995
------------------------------------
Accepted by the Company this _____ day of __________, 199__.
By _____________________________________
Title _________________________________
<PAGE>
Exhibit 10.6
COMMUNITY BANK OF EXCELSIOR SPRINGS
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 21st day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Larry Hermreck (the
"Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51% or more of the
Company's outstanding voting common stock followed within twelve (12) months by
the Executive's Termination of Employment for reasons other than death,
disability or retirement.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it now
exists and to any successor provision.
1.1.3 "Disability" means, if the Executive is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Executive is not covered by
such a policy, Disability means the Executive suffering a sickness, accident or
injury which, in the judgment of a physician satisfactory to the Company,
prevents the Executive from performing substantially all of the Executive's
normal duties for the Company. As a condition to any benefits, the Company may
require the Executive to submit to such physical or mental evaluations and tests
as the Company's Board of Directors deems appropriate.
1.1.4 "Normal Retirement Date" means the Executive attaining age 65.
1.1.5 "Termination of Employment" means the Executive's ceasing to be
employed by the Company for any reason whatsoever, voluntary or involuntary,
other than by reason of an approved leave of absence.
<PAGE>
1.1.6 "Plan year" means twelve months ending on _________________.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates employment on or
after the Normal Retirement Date for reasons other than death, the Company shall
pay to the Executive the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $2,917.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month following the
Retirement Date and continuing for an additional 179 months.
2.2 Early Retirement Benefit. If the Executive terminates employment before
the Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the benefit
determined under Schedule A, Column D, based on the date of the Executive's
Termination of Employment. Schedule A is calculated using the interest method of
accounting, a 8.5% discount rate, and assuming monthly compounding and monthly
benefit payments.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month following the
Executive's Normal Retirement Date and continuing for 179 additional months.
2.3 Disability Benefit. If the Executive terminates employment for
Disability prior to the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the benefit
determined under Schedule A, Column B, based on the date of the Executive's
Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month following the
Executive's Termination of Employment and continuing until the earlier of (a)
the Executive's recovery from the Disability, or (b) 179 months.
2.4 Change of Control Benefit. Upon a Change of Control while the Executive
is in the active service of the Company, the Company shall pay to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2
<PAGE>
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the benefit
determined under Schedule A, Column A, based on the date of the Executive's
Termination of Employment.
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after the Change of Control.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit described in this Section 3.1.
3.1.1 Amount of Benefit. The benefit under Section 3.1 is the lifetime
benefit that would have been paid to the Executive under Section 2.1 calculated
as if the date of the Executive's death were the Normal Retirement Date.
3.1.2 Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month following
the Executive's death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the
3
<PAGE>
care or custody of such minor, incompetent person or incapable person. The
Company may require proof of incompetency, minority or guardianship as it may
deem appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Company from all liability with respect to such
benefit.
ARTICLE 5
GENERAL LIMITATIONS
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code.
5.3 Termination for Cause. If the Company terminates the Executive's
employment for:
5.3.1 Gross negligence or gross neglect of duties;
5.3.2 Commission of a felony or of a gross misdemeanor involving moral
turpitude;
or
5.3.3 Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
5.4 Suicide. No benefits shall be payable if the Executive commits suicide
within two years after the date of this Agreement, or if the Executive has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the Executive's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed.
4
<PAGE>
If the Company determines that there are special circumstances requiring
additional time to make a decision, the Company shall notify the beneficiary of
the special circumstances and the date by which a decision is expected to be
made, and may extend the time for up to an additional ninety-day period
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
Article 7
Amendments and Termination
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Executive prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Executive shall be 100% vested in the portion of the Normal Retirement Benefit
accrued to the Executive's benefit under Section 2.1 as of the date of the
amendment or termination.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
5
<PAGE>
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer have
signed this Agreement.
EXECUTIVE: COMPANY:
COMMUNITY BANK OF EXCELSIOR SPRINGS
/s/ Larry E. Hermreck By: /s/ Robert E. McCrorey
- --------------------------- -------------------------------
Larry E. Hermreck
Title: Board President
----------------------------
6
<PAGE>
Larry Hermreck
Schedule "A"
<TABLE>
<CAPTION>
Column A Column B Column C Column D
Plan Early Vested Accrual Monthly
Year-End Monthly Retirement Balance For Early
Accrual Disability Vesting Early Retirement
Plan Year Balance Benefit Percentage Retirement Benefit
<S> <C> <C> <C> <C> <C>
1 $19,645 $193 0.00% $0 $0
2 41,027 404 0.00% 0 0
3 64,299 633 30.00% 19,290 344
4 89,627 883 40.00% 35,851 587
5 117,195 1,154 50.00% 58,598 881
6 147,199 1,450 60.00% 88,319 1,220
7 179,855 1,771 70.00% 125,898 1,598
8 215,398 2,121 80.00% 172,318 2,010
9 254,083 2,502 90.00% 228,675 2,451
10 296,187 2,917 100.00% 296,187 2,917
</TABLE>
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Almeda Hermreck (Spouse)
-----------------------------------------------------------------------
Contingent Kellie A. Roth, Scott A. Hermreck, Kathy J. Sardo & Amy M. Hermreck
---------------------------------------------------------------------
(Divided equally amount my four children)
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Larry E. Hermreck
-------------------------------
Date April 19, 1995
-------------------------------
Accepted by the Company this day of , 199_
By: __________________________________________
Title ___________________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 21st day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Dennis Hartman (the
"Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 " Change of Control" means the transfer of 51% or more of the
Company's outstanding voting common stock followed within twelve (12)
months by the Executive's Termination of Employment for reasons other than
death, disability or retirement.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Executive is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Executive is not
covered by such a policy, Disability means the Executive suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company. As a
condition to any benefits, the Company may require the Executive to submit
to such physical or mental evaluations and tests as the Company's Board of
Directors deems appropriate.
1.1.4 "Normal Retirement Date" means the Executive attaining age 65.
<PAGE>
1.1.5 "Termination of Employment" means the Executive's ceasing to be
employed by the Company for any reason whatsoever, voluntary or
involuntary, other than by reason of an approved leave of absence.
1.1.6 "Plan year" means twelve months ending on ________________.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates employment on or
after the Normal Retirement Date for reasons other than death, the Company shall
pay to the Executive the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $933
increased each year between the date of this Agreement and the Executive's
Normal Retirement Date by the percentage (not exceeding 3% per year)
established by and in the discretion of the Company's Board of Directors
each year.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Retirement Date and continuing for an additional 179 months.
2.2 Early Retirement Benefit. If the Executive terminates employment before
the Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column D, based on the date of the
Executive's Termination of Employment. Schedule A is calculated using the
interest method of accounting, a 8.5% discount rate, and assuming monthly
compounding and monthly benefit payments.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive's Normal Retirement Date and continuing for 179
additional months.
2.3 Disability Benefit. If the Executive terminates employment for
Disability prior to the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Executive's Termination of Employment.
2
<PAGE>
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive's Termination of Employment and continuing until
the earlier of (a) the Executive's recovery from the Disability, or (b) 179
months.
2.4 Change of Control Benefit. Upon a Change of Control while the Executive
is in the active service of the Company, the Company shall pay to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Executive's Termination of Employment.
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after the Change of Control.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit described in this Section 3.1.
3.1.1 Amount of Benefit. The benefit under Section 3.1 is the lifetime
benefit that would have been paid to the Executive under Section 2.1
calculated as if the date of the Executive's death were the Normal
Retirement Date.
3.1.2 Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Executive' s death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if
3
<PAGE>
the beneficiary predeceases the Executive, or if the Executive names a spouse as
beneficiary and the marriage is subsequently dissolved. If the Executive dies
without a valid beneficiary designation, all payments shall be made to the
Executive's surviving spouse, if any, and if none, to the Executive's surviving
children and the descendants of any deceased child by right of representation,
and if no children or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code.
5.3 Termination for Cause. If the Company terminates the Executive's
employment for:
5.3.1 Gross negligence or gross neglect of duties;
5.3.2 Commission of a felony or of a gross misdemeanor involving moral
turpitude;
or
5.3.3 Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
5.4 Suicide. No benefits shall be payable if the Executive commits suicide
within two years after the date of this Agreement, or if the Executive has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
4
<PAGE>
ARTICLE 6
CLAIMS AND REVIEW PROCEDURES
6.1 Claims Procedure. The Company shall notify the Executive's beneficiary
in writing, within ninety (90) days of his or her written application for
benefits, of his or her eligibility or noneligibility for benefits under the
Agreement. If the Company determines that the beneficiary is not eligible for
benefits or full benefits, the notice shall set forth (1) the specific reasons
for such denial, (2) a specific reference to the provisions of the Agreement on
which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
Article 7
Amendments and Termination
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Executive prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Executive shall be 100 vested in the portion of the Normal Retirement Benefit
accrued to the Executive's benefit under Section 2.1 as of the date of the
amendment or termination.
5
<PAGE>
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, NOR does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
IN WlTNESS WHEREOF, the Executive and a duly authorized Company officer have
signed this Agreement.
EXECUTIVE: COMPANY
Community Bank of Excelsior Springs
/s/ Dennis Hartman By: /s/ Larry E. Hermreck
- ------------------------ ----------------------------------------
Dennis Hartman
Title: Chief Executive Officer
-------------------------------
6
<PAGE>
SCHEDULE BASED UPON 3% PRE-RETIREMENT BENEFIT INCREASE
Dennis Hartman
Schedule "A"
<TABLE>
<CAPTION>
Column A Column B Column C Column D
Plan Early Vested Accrual Annual Monthly
Year-End Monthly Retirement Balance For Early Early
Accrual Disability Vesting Early Retirement Retirement
Plan Year Balance Benefit Percentage Retirement Benefit Benefit
<S> <C> <C> <C> <C> <C> <C>
1 $1,146 $11 0.00% $0 $0 $0
2 2,431 24 0.00% 0 0 0
3 3,873 38 0.00% 0 0 0
4 5,491 54 10.00% 549 384 32
5 7,308 72 20.00% 1,462 940 78
6 9,349 92 30.00% 2,805 1,657 138
7 11,644 115 40.00% 4,658 2,528 211
8 14,225 140 50.00% 7,113 3,547 296
9 17,130 169 60.00% 10,278 4,709 392
10 20,403 201 70.00% 14,282 6,013 501
11 24,092 237 80.00% 19,274 7,455 621
12 28,257 278 90.00% 25,431 9,038 753
13 32,963 325 100.00% 32,963 10,763 897
14 38,288 377 100.00% 38,288 11,487 957
15 44,323 436 100.00% 44,323 12,218 1,018
16 51,177 504 100.00% 51,177 12,961 1,080
17 58,980 581 100.00% 58,980 13,724 1,144
18 67,889 669 100.00% 67,889 14,514 1,210
19 78,098 769 100.00% 78,098 15,341 1,278
20 89,856 885 100.00% 89,856 16,217 1,351
21 103,488 1,019 100.00% 103,488 17,161 1,430
22 119,452 1,176 100.00% 119,452 18,199 1,517
23 138,442 1,363 100.00% 138,442 19,379 1,615
24 161,720 1,593 100.00% 161,720 20,799 1,733
25 192,668 1,897 100.00% 192,668 22,767 1,897
</TABLE>
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Jeanne Hartman
Contingent: Arlo Hartman
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature: /s/ Dennis Hartman
------------------------
Date: April 19, 1995
-----------------------------
Accepted by the Company this ____ day of ____________, 199__.
By: _______________________________________
Title: _______________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 21st day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Deryl Goettling (the
"Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51% or more of the
Company's outstanding voting common stock followed within twelve (12)
months by the Executive's Termination of Employment for reasons other than
death, disability or retirement.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Executive is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Executive is not
covered by such a policy, Disability means the Executive suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company. As a
condition to any benefits, the Company may require the Executive to submit
to such physical or mental evaluations and tests as the Company's Board of
Directors deems appropriate.
1.1.4 "Normal Retirement Date" means the Executive attaining age 65.
<PAGE>
1.1.5 "Termination of Employment" means the Executive's ceasing to be
employed by the Company for any reason whatsoever, voluntary or
involuntary, other than by reason of an approved leave of absence.
1.1.6 "Plan year" means twelve months ending on _____________.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates employment on or
after the Normal Retirement Date for reasons other than death, the Company shall
pay to the Executive the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $980
increased each year between the date of this Agreement and the Executive's
Normal Retirement Date by the percentage (not exceeding 3% per year)
established by and in the discretion of the Company's Board of Directors
each year.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Retirement Date and continuing for an additional 179 months.
2.2 Early Retirement Benefit. If the Executive terminates employment before
the Normal Retirement Date, and for reasons other than death or Disability, the
Company shall pay to the Executive the benefit described in this Section 2.2.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column D, based on the date of the
Executive's Termination of Employment. Schedule A is calculated using the
interest method of accounting, a 8.5% discount rate, and assuming monthly
compounding and monthly benefit payments.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive's Normal Retirement Date and continuing for 179
additional months.
2.3 Disability Benefit. If the Executive terminates employment for
Disability prior to the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Executive's Termination of Employment.
2
<PAGE>
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive's Termination of Employment and continuing until
the earlier of (a) the Executive's recovery from the Disability, or (b) 179
months.
2.4 Change of Control Benefit. Upon a Change of Control while the Executive
is in the active service of the Company, the Company shall pay to the Executive
the benefit described in this Section 2.4 in lieu of any other benefit under
this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Executive's Termination of Employment.
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after the Change of Control.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the active
service of the Company, the Company shall pay to the Executive's beneficiary the
benefit described in this Section 3.1.
3.1.1 Amount of Benefit. The benefit under Section 3.1 is the lifetime
benefit that would have been paid to the Executive under Section 2.1
calculated as if the date of the Executive's death were the Normal
Retirement Date.
3.1.2 Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Executive's death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary
3
<PAGE>
predeceases the Executive, or if the Executive names a spouse as beneficiary and
the marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an excess
parachute payment under Section 280G of the Code.
5.3 Termination for Cause. If the Company terminates the Executive's
employment for:
5.3.1 Gross negligence or gross neglect of duties,
5.3.2 Commission of a felony or of a gross misdemeanor involving moral
turpitude;
or
5.3.3 Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
5.4 Suicide. No benefits shall be payable if the Executive commits suicide
within two years after the date of this Agreement, or if the Executive has made
any material misstatement of fact on any application for life insurance
purchased by the Company.
4
<PAGE>
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the Executive's
beneficiary in writing, within ninety (90) days of his or her written
application for benefits, of his or her eligibility or noneligibility for
benefits under the Agreement. If the Company determines that the beneficiary is
not eligible for benefits or full benefits, the notice shall set forth (1) the
specific reasons for such denial, (2) a specific reference to the provisions of
the Agreement on which the denial is based, (3) a description of any additional
information or material necessary for the claimant to perfect his or her claim,
and a description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Renew Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
Article 7
Amendments and Termination
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Executive prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Executive shall be 100% vested in the portion of the Normal Retirement Benefit
accrued to the Executive's benefit under Section 2 l as of the date of the
amendment or termination.
5
<PAGE>
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer have
signed this Agreement.
EXECUTIVE: COMPANY:
Community Bank of Excelsior Springs
/s/ Deryl Goettling By: /s/ Larry E. Hermreck
- ---------------------------- -----------------------------------
Deryl Goettling
Title Chief Executive Officer
-------------------------------
6
<PAGE>
SCHEDULE BASED UPON 3% PRE-RETIREMENT BENEFIT INCREASE
Deryl Goettling
Schedule "A"
<TABLE>
<CAPTION>
Column A Column B Column C Column D
Plan Early Vested Accrual Annual Monthly
Year-End Monthly Retirement Balance For Early Early
Accrual Disability Vesting Early Retirement Retirement
Plan Year Balance Benefit Percentage Retirement Benefit Benefit
<S> <C> <C> <C> <C> <C> <C>
1 $2,199 $22 0.00% $0 $0 $0
2 4,667 46 0.00% 0 0 0
3 7,437 73 0.00% 0 0 0
4 10,549 104 10.00% 1,055 444 37
5 14,048 138 20.00% 2,810 1,087 91
6 17,988 177 30.00% 5,396 1,918 160
7 22,428 221 40.00% 8,971 2,929 244
8 27,439 270 50.00% 13,720 4,116 343
9 33,105 326 60.00% 19,863 5,475 456
10 39,521 389 70.00% 27,665 7,006 584
11 46,807 461 80.00% 37,445 8,713 726
12 55,102 543 90.00% 49,591 10,602 884
13 64,581 636 100.00% 64,581 12,686 1,057
14 75,467 743 100.00% 75,467 13,620 1,135
15 88,050 867 100.00% 88,050 14,601 1,217
16 102,735 1,012 100.00% 102,735 15,652 1,304
17 120,139 1,183 100.00% 120,139 16,817 1,401
18 141,376 1,392 100.00% 141,376 18,183 1,515
19 169,424 1,668 100.00% 169,424 20,021 1,668
</TABLE>
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of any death benefits under the Salary
Continuation Agreement:
Primary: Gail Goettling
------------------------------
Contingent: Stephen Goettling
---------------------------
NOTE: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
-----
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Deryl Goettling
-------------------------
Date April 21, 1995
-------------------------
Accepted by the Company this ____ day of __________, 199__.
By __________________________________
Title ____________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 21st day of February 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Jim Alderson (the
"Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words
and phrases shall have the meanings specified:
1. 1.1 "Change of Control" means the transfer of 51% or more of the
Company's outstanding voting common stock followed within twelve (12)
months by the Executive's Termination of Employment for reasons other than
death, disability or retirement.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Executive is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Executive is not
covered by such a policy, Disability means the Executive suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company. As a
condition to any benefits, the Company may require the Executive to submit
to such physical or mental evaluations and tests as the Company's Board of
Directors deems appropriate.
1.1.4 "Normal Retirement Date" means the Executive attaining age 65.
<PAGE>
1.1.5 "Termination of Employment" means the Executive's ceasing to be
employed by the Company for any reason whatsoever, voluntary or
involuntary, other than by reason of an approved leave of absence.
1.1.6 "Plan year" means twelve months ending on ________________.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates employment on
or after the Normal Retirement Date for reasons other than death, the Company
shall pay to the Executive the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $700
increased each year between the date of this Agreement and the Executive's
Normal Retirement Date by the percentage (not exceeding 3% per year)
established by and in the discretion of the Company's Board of Directors
each year.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Retirement Date and continuing for an additional 179 months.
2.2 Early Retirement Benefit. If the Executive terminates employment
before the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Executive the benefit described in this
Section 2.2.
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column D, based on the date of the
Executive's Termination of Employment. Schedule A is calculated using the
interest method of accounting, a 8.5% discount rate, and assuming monthly
compounding and monthly benefit payments.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive's Normal Retirement Date and continuing for 179
additional months.
2.3 Disability Benefit. If the Executive terminates employment for
Disability prior to the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Executive's Termination of Employment.
2
<PAGE>
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month
following the Executive's Termination of Employment and continuing until
the earlier of (a) the Executive's recovery from the Disability, or (b) 179
months.
2.4 Change of Control Benefit. Upon a Change of Control while the
Executive is in the active service of the Company, the Company shall pay to the
Executive the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Executive's Termination of Employment.
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after the Change of Control.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the
active service of the Company, the Company shall pay to the Executive's
beneficiary the benefit described in this Section 3. 1.
3.1.1. Amount of Benefit. The benefit under Section 3.1 is the
lifetime benefit that would have been paid to the Executive under Section
2.1 calculated as if the date of the Executive's death were the Normal
Retirement Date.
3.1.2 Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month
following the Executive's death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if
3
<PAGE>
the beneficiary predeceases the Executive, or if the Executive names a spouse as
beneficiary and the marriage is subsequently dissolved. If the Executive dies
without a valid beneficiary designation, all payments shall be made to the
Executive's surviving spouse, if any, and if none, to the Executive's surviving
children and the descendants of any deceased child by right of representation,
and if no children or descendants survive, to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an
excess parachute payment under Section 280G of the Code.
5.3 Termination for Cause. If the Company terminates the Executive's
employment for:
5.3.1 Gross negligence or gross neglect of duties;
5.3.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.3.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
5.4 Suicide. No benefits shall be payable if the Executive commits
suicide within two years after the date of this Agreement, or if the Executive
has made any material misstatement of fact on any application for life insurance
purchased by the Company.
4
<PAGE>
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the Executive's
beneficiary in writing, within ninety (90) days of his or her written
application for benefits, of his or her eligibility or noneligibility for
benefits under the Agreement. If the Company determines that the beneficiary is
not eligible for benefits or full benefits, the notice shall set forth (1) the
specific reasons for such denial, (2) a specific reference to the provisions of
the Agreement on which the denial is based, (3) a description of any additional
information or material necessary for the claimant to perfect his or her claim,
and a description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the
Company not to be eligible for benefits, or if the beneficiary believes that he
or she is entitled to greater or different benefits, the beneficiary shall have
the opportunity to have such claim reviewed by the Company by filing a petition
for review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
Article 7
Amendments and Termination
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Executive prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Executive shall be 100% vested in the portion of the Normal Retirement Benefit
accrued to the Executive's benefit under Section 2.1 as of the date of the
amendment or termination
5
<PAGE>
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guaranty of Employment. This Agreement is not an employment
policy or contract. It does not give the Executive the right to remain an
employee of the Company, nor does it interfere with the Company's right to
discharge the Executive. It also does not require the Executive to remain an
employee nor interfere with the Executive's right to terminate employment at any
time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer have
signed this Agreement.
EXECUTIVE: COMPANY:
Community Bank of Excelsior Springs
/s/ Jim Alderson By: /s/ Larry E. Hermreck
- ---------------------------- ------------------------------------
Title Chief Executive Officer
---------------------------------
6
<PAGE>
SCHEDULE BASED UPON 3% PRE-RETIREMENT BENEFIT INCREASE
Jim Alderson
Schedule "A"
<TABLE>
<CAPTION>
Column A Column B Column C Column D
Plan Early Vested Accrual Annual Monthly
Year-End Monthly Retirement Balance For Early Early
Accrual Disability Vesting Early Retirement Retirement
Plan Year Balance Benefit Percentage Retirement Benefit Benefit
<S> <C> <C> <C> <C> <C> <C>
1 $1,951 $0 0.00% $0 $0 $0
2 4,140 0 0.00% 0 0 0
3 6,599 65 0.00% 0 0 0
4 9,362 92 10.00% 936 333 28
5 12,473 123 20.00% 2,495 815 68
6 15,979 157 30.00% 4,794 1,438 120
7 19,936 196 40.00% 7,974 2,198 183
8 24,413 240 50.00% 12,206 3,091 258
9 29,487 290 60.00% 17,692 4,117 343
10 35,257 347 70.00% 24,680 5,276 440
11 41,841 412 80.00% 33,473 6,575 548
12 49,389 486 90.00% 44,450 8,022 669
13 58,099 572 100.00% 58,099 9,634 803
14 68,246 672 100.00% 68,246 10,398 866
15 80,246 790 100.00% 80,246 11,233 936
16 94,851 934 100.00% 94,851 12,199 1,017
17 114,070 1,123 100.00% 114,070 13,480 1,123
</TABLE>
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: C. Lee Alderson - Spouse
---------------------------------
Contingent: Wilma L. Alderson - Mother
------------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ James V. Alderson
-------------------------------
Date April 19, 1995
------------------------------------
Accepted by the Company this ____ day of __________, 199__.
By _______________________________________
Title ___________________________________
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS
SALARY CONTINUATION AGREEMENT
THIS AGREEMENT is made this 21st day of February, 1995 by and between
Community Bank of Excelsior Springs (the "Company"), and Margaret Teegarden (the
"Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide salary continuation benefits to the Executive. The
Company will pay the benefits from its general assets.
AGREEMENT
The Executive and the Company agree as follows:
Article 1
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Change of Control" means the transfer of 51% or more of the
Company's outstanding voting common stock followed within twelve (12)
months by the Executive's Termination of Employment for reasons other than
death, disability or retirement.
1.1.2 "Code" means the Internal Revenue Code of 1986, as amended.
References to a Code section shall be deemed to be to that section as it
now exists and to any successor provision.
1.1.3 "Disability" means, if the Executive is covered by a Company-
sponsored disability insurance policy, total disability as defined in such
policy without regard to any waiting period. If the Executive is not
covered by such a policy, Disability means the Executive suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company. As a
condition to any benefits, the Company may require the Executive to submit
to such physical or mental evaluations and tests as the Company's Board of
Directors deems appropriate.
1.1.4 "Normal Retirement Date" means the Executive attaining age 65.
1.1.5 "Termination of Employment" means the Executive's ceasing to be
employed by the Company for any reason whatsoever, voluntary or
involuntary, other than by reason of an approved leave of absence.
<PAGE>
1.1.6 "Plan year" means twelve months ending on ______________.
Article 2
Lifetime Benefits
2.1 Normal Retirement Benefit. If the Executive terminates employment on
or after the Normal Retirement Date for reasons other than death, the Company
shall pay to the Executive the benefit described in this Section 2.1.
2.1.1 Amount of Benefit. The benefit under this Section 2.1 is $747
increased each year between the date of this Agreement and the Executive's
Normal Retirement Date by the percentage (not exceeding 3% per year) established
by and in the discretion of the Company's Board of Directors each year.
2.1.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month following the
Retirement Date and continuing for an additional 179 months.
2.2 Early Retirement Benefit. If the Executive terminates employment
before the Normal Retirement Date, and for reasons other than death or
Disability, the Company shall pay to the Executive the benefit described in this
Section 2.2
2.2.1 Amount of Benefit. The benefit under this Section 2.2 is the
benefit determined under Schedule A, Column D, based on the date of the
Executive's Termination of Employment. Schedule A is calculated using the
interest method of accounting, a 8.5% discount rate, and assuming monthly
compounding and monthly benefit payments.
2.2.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month following the
Executive's Normal Retirement Date and continuing for 179 additional months.
2.3 Disability Benefit. If the Executive terminates employment for
Disability prior to the Normal Retirement Date, the Company shall pay to the
Executive the benefit described in this Section 2.3.
2.3.1 Amount of Benefit. The benefit under this Section 2.3 is the
benefit determined under Schedule A, Column B, based on the date of the
Executive's Termination of Employment.
2.3.2 Payment of Benefit. The Company shall pay the benefit to the
Executive on the first day of each month commencing with the month following the
Executive's Termination of Employment and continuing until the earlier of (a)
the Executive's recovery from the Disability, or (b) 179 months.
2
<PAGE>
2.4 Change of Control Benefit. Upon a Change of Control while the
Executive is in the active service of the Company, the Company shall pay to the
Executive the benefit described in this Section 2.4 in lieu of any other benefit
under this Agreement.
2.4.1. Amount of Benefit. The benefit under this Section 2.4 is the
benefit determined under Schedule A, Column A, based on the date of the
Executive's Termination of Employment.
2.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive in a lump sum within 60 days after the Change of Control.
Article 3
Death Benefits
3.1 Death During Active Service. If the Executive dies while in the
active service of the Company, the Company shall pay to the Executive's
beneficiary the benefit described in this Section 3.1.
3.1.1 Amount of Benefit. The benefit under Section 3.1 is the lifetime
benefit that would have been paid to the Executive under Section 2.1 calculated
as if the date of the Executive's death were the Normal Retirement Date
3.1.2 Payment of Benefit. The Company shall pay the benefit to the
Beneficiary on the first day of each month commencing with the month following
the Executive' s death and continuing for 179 additional months.
3.2 Death During Benefit Period. If the Executive dies after benefit
payments have commenced under this Agreement but before receiving all such
payments, the Company shall pay the remaining benefits to the Executive's
beneficiary at the same time and in the same amounts they would have been paid
to the Executive had the Executive survived.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's surviving
spouse, if any, and if none, to the Executive's surviving children and the
descendants of any deceased child by right of representation, and if no children
or descendants survive to the Executive's estate.
3
<PAGE>
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetency,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
Article 5
General Limitations
Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would be an
excess parachute payment under Section 280G of the Code.
5.3 Termination for Cause. If the Company terminates the Executive's
employment for:
5.3.1 Gross negligence or gross neglect of duties;
5.3.2 Commission of a felony or of a gross misdemeanor involving
moral turpitude;
or
5.3.3 Fraud, disloyalty, dishonesty or willful violation of any law
or significant Company policy committed in connection with the Executive's
employment and resulting in an adverse effect on the Company.
5.4 Suicide. No benefits shall be payable if the Executive commits
suicide within two years after the date of this Agreement, or if the Executive
has made any material misstatement of fact on any application for life insurance
purchased by the Company.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the Executive's
beneficiary in writing, within ninety (90) days of his or her written
application for benefits, of his or her eligibility or noneligibility for
benefits under the Agreement. If the Company determines that the beneficiary is
not eligible for benefits or full benefits, the notice shall set forth (1) the
specific reasons for such denial, (2) a specific reference to the provisions of
the Agreement
4
<PAGE>
on which the denial is based, (3) a description of any additional information or
material necessary for the claimant to perfect his or her claim, and a
description of why it is needed, and (4) an explanation of the Agreement's
claims review procedure and other appropriate information as to the steps to be
taken if the beneficiary wishes to have the claim reviewed. If the Company
determines that there are special circumstances requiring additional time to
make a decision, the Company shall notify the beneficiary of the special
circumstances and the date by which a decision is expected to be made, and may
extend the time for up to an additional ninety-day period.
6.2 Review Procedure. If the beneficiary is determined by the Company not
to be eligible for benefits, or if the beneficiary believes that he or she is
entitled to greater or different benefits, the beneficiary shall have the
opportunity to have such claim reviewed by the Company by filing a petition for
review with the Company within sixty (60) days after receipt of the notice
issued by the Company. Said petition shall state the specific reasons which the
beneficiary believes entitle him or her to benefits or to greater or different
benefits. Within sixty (60) days after receipt by the Company of the petition,
the Company shall afford the beneficiary (and counsel, if any) an opportunity to
present his or her position to the Company orally or in writing, and the
beneficiary (or counsel) shall have the right to review the pertinent documents.
The Company shall notify the beneficiary of its decision in writing within the
sixty-day period, stating specifically the basis of its decision, written in a
manner calculated to be understood by the beneficiary and the specific
provisions of the Agreement on which the decision is based. If, because of the
need for a hearing, the sixty-day period is not sufficient, the decision may be
deferred for up to another sixty-day period at the election of the Company, but
notice of this deferral shall be given to the beneficiary.
Article 7
Amendments and Termination
The Company may amend or terminate this Agreement at any time if, pursuant
to legislative, judicial or regulatory action, continuation of the Agreement
would (i) cause benefits to be taxable to the Executive prior to actual receipt,
or (ii) result in significant financial penalties or other significantly
detrimental ramifications to the Company (other than the financial impact of
paying the benefits). In the event of any such amendment or termination, the
Executive shall be 100% vested in the portion of the Normal Retirement Benefit
accrued to the Executive's benefit under Section 2.1 as of the date of the
amendment or termination.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries. survivors. executors. administrators and
transferees.
5
<PAGE>
8.2 No Guaranty of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are
required to be withheld from the benefits provided under this Agreement.
8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of Missouri, except to the extent preempted by the laws of
the United States of America.
8.6 Unfunded Arrangement. The Executive and beneficiary are general
unsecured creditors of the Company for the payment of benefits under this
Agreement. The benefits represent the mere promise by the Company to pay such
benefits. The rights to benefits are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors. Any insurance on the Executive's life is a general
asset of the Company to which the Executive and beneficiary have no preferred or
secured claim.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer have
signed this Agreement.
EXECUTIVE: COMPANY:
Community Bank of Excelsior Springs
/s/ Margaret Teegarden By: /s/ Larry E. Hermreck
- ------------------------------- ------------------------------------
Margaret Teegarden
Title: Chief Executive Officer
---------------------------------
6
<PAGE>
SCHEDULE BASED UPON 3% PRE-RETIREMENT BENEFIT INCREASE
Margaret Teegarden
Schedule "A"
<TABLE>
<CAPTION>
Column A Column B Column C Column D
Plan Early Vested Accrual Annual Monthly
Year-End Monthly Retirement Balance For Early Early
Accrual Disability Vesting Early Retirement Retirement
Plan Year Balance Benefit Percentage Retirement Benefit Benefit
<S> <C> <C> <C> <C> <C> <C>
1 $1,676 $17 0.00% $0 $0 $0
2 3,556 35 0.00% 0 0 0
3 5,666 56 0.00% 0 0 0
4 8,037 79 10.00% 804 338 28
5 10,708 105 20.00% 2,141 828 69
6 13,705 135 30.00% 4,111 1,461 122
7 17,088 168 40.00% 6,835 2,232 186
8 20,906 206 50.00% 10,453 3,136 261
9 25,223 248 60.00% 15,134 4,171 348
10 30,112 297 70.00% 21,078 5,338 445
11 35,662 351 80.00% 28,530 6,639 553
12 41,982 413 90.00% 37,784 8,078 673
13 49,205 485 100.00% 49,205 9,665 805
14 57,499 566 100.00% 57,499 10,377 865
15 67,086 661 100.00% 67,086 11,124 927
16 78,274 771 100.00% 78,274 11,925 994
17 91,534 901 100.00% 91,534 12,813 1,068
18 107,715 1,061 100.00% 107,715 13,854 1,154
19 129,085 1,271 100.00% 129,085 15,254 1,271
</TABLE>
<PAGE>
BENEFICIARY DESIGNATION
I designate the following as beneficiary of benefits under the Director Emeritus
Agreement payable following my death:
Primary: Ronald D. Teegarden - 100%
--------------------------------
Contingent: Christopher L. Teegarden - 50%; Jon P. Teegarden - 50%
------------------------------------------------------
Note: TO NAME A TRUST AS BENEFICIARY, PLEASE PROVIDE THE NAME OF THE TRUSTEE AND
THE EXACT DATE OF THE TRUST AGREEMENT.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature /s/ Margaret Teegarden
----------------------------
Date: April 19, 1995
----------------------------
Accepted by the Company this ____ day of __________, 199__.
By ________________________________
Title ___________________________
<PAGE>
AMENDMENT
Amendment to application of 0008912349
name of insured Margaret Teegarden
of Excelsior Springs, MO
bearing date of February 21, 1995
SINGLE PREMIUM DEPOSIT IS DETERMINED TO BE $90,000.00.
CONTRACT ISSUED WITH FACE AMOUNT OF $300,000.
I hereby agree that the above statement or statements shall be a part of my
application above referred to just as fully as though made in said application.
/s/ Margaret E. Teegarden
--------------------------------------------
Signature of Insured
/s/ Larry E. Hermreck, CEO
--------------------------------------------
Signature of Applicant/Owner
(If other than Insured)
Signed this 21th day of February 1995 in the presence of
___________________________________
Agent
<PAGE>
Exhibit 21
SUBSIDIARY
----------
CBES Service Corporation
<PAGE>
Exhibit 23.2
ACCOUNTANTS' CONSENT
--------------------
The Board of Directors
Community Bank of Excelsior Springs, a Savings Bank
We consent to the use in this Registration Statement of CBES Bancorp, Inc. Form
SB-2 and the Application for Conversion on Form AC of our report dated August
25, 1995, on the consolidated financial statements of Community Bank of
Excelsior Springs, a Savings Bank and subsidiary as of June 30, 1995 and 1994,
and for the fiscal years ended June 30, 1995 and 1994, and to the references to
our firm under the headings "Legal and Tax Matters" and "Experts" in the related
prospectus.
/s/ KPMG peat Marwick LLP
KPMG Peat Marwick LLP
Kansas City, Missouri
June 21, 1996
<PAGE>
Exhibit 23.3
[LETTERHEAD OF RP FINANCIAL]
June 14, 1996
Board of Directors
Community Bank of Excelsior Springs, A Savings Bank
1001 N. Jesse James Road
Excelsior Springs, Missouri 64024
Gentlemen:
We hereby consent to the use of our firm's name in the Application for
Conversion of Community Bank of Excelsior Springs, A Savings Bank, Excelsior
Springs, Missouri, and any amendments thereto, in the Form S-B2 Registration
Statement for CBES Bancorp, Inc., and any amendments thereto, and in the Form AC
for Community Bank of Excelsior Springs, A Savings Bank, and any amendments
thereto. We also hereby consent to the inclusion of, summary of and references
to our Appraisal Report and our statement concerning subscription rights in such
filings including the Prospectus of CBES Bancorp, Inc.
Very truly yours,
RP FINANCIAL, LC.
/s/ Ronald S. Riggins
Ronald S. Riggins
President
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1996
<CASH> 768,211
<INT-BEARING-DEPOSITS> 1,316,396
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1980,820
<INVESTMENTS-CARRYING> 548,742
<INVESTMENTS-MARKET> 545,869
<LOANS> 77,620,367
<ALLOWANCE> 347,000
<TOTAL-ASSETS> 86,167,514
<DEPOSITS> 67,916,486
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,368,364
<LONG-TERM> 9,000,000
0
0
<COMMON> 0
<OTHER-SE> 7,882,664
<TOTAL-LIABILITIES-AND-EQUITY> 86,167,514
<INTEREST-LOAN> 4,862,687
<INTEREST-INVEST> 207,668
<INTEREST-OTHER> 60,505
<INTEREST-TOTAL> 5,130,860
<INTEREST-DEPOSIT> 2,484,979
<INTEREST-EXPENSE> 3,089,220
<INTEREST-INCOME-NET> 2,041,640
<LOAN-LOSSES> 188,341
<SECURITIES-GAINS> 54,205
<EXPENSE-OTHER> 1,761,265
<INCOME-PRETAX> 597,129
<INCOME-PRE-EXTRAORDINARY> 597,129
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 390,031
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 7.99
<LOANS-NON> 95,000
<LOANS-PAST> 222,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 226,000
<CHARGE-OFFS> 91,679
<RECOVERIES> 24,338
<ALLOWANCE-CLOSE> 347,000
<ALLOWANCE-DOMESTIC> 347,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<PAGE>
Exhibit 99.1
RP FINANCIAL, LC. LETTERHEAD APPEARS HERE
April 2, 1996
Mr. Larry E. Hermreck
Chief Executive Officer
Community Bank of Excelsior Springs
1001 North Jesse James Road
Excelsior Springs, MO 64024-1201
Dear Mr. Hermreck:
This letter sets forth the agreement between Community Bank of Excelsior
Springs ("Community" or the "Bank"), and RP Financial, LC. ("RP Financial") for
certain conversion appraisal services pertaining to the Bank's mutual-to-stock
conversion and simultaneous holding company formation. The specific appraisal
services to be rendered by RP Financial are described below. These appraisal
services will be rendered by a team of one to two senior consultants on staff
and will be directed by the undersigned.
Description of Conversion Appraisal Services
- --------------------------------------------
Prior to preparing the valuation report, RP Financial will conduct a
financial due diligence, including on-site interviews of senior management and
reviews of financial and other documents and records, to gain insight into the
Bank's operations, financial condition, profitability, market area, risks and
various internal and external factors which impact the pro forma value of the
Bank. RP Financial will prepare a written detailed valuation report of Community
which will be fully consistent with applicable regulatory guidelines and
standard pro forma valuation practices. The appraisal report will include an in-
depth analysis of the Bank's financial condition and operating results, as well
as an assessment of the Bank's interest rate risk, credit risk and liquidity
risk. The appraisal report will describe the Bank's business strategies, market
area, prospects for the future and the intended use of proceeds both in the
short term and over the longer term. A peer group analysis relative to publicly-
traded savings institutions will be conducted for the purpose of determining
appropriate valuation adjustments relative to the group. We will review
pertinent sections of the prospectus to obtain necessary data and information
for the appraisal, including the impact of key deal elements on the appraised
value, such as dividend policy, use of proceeds and reinvestment rate, tax rate,
conversion expenses and characteristics of stock plans. The appraisal report
will establish a midpoint pro forma value as well as the range of value. The
appraisal report may be periodically updated throughout the conversion process
and there will be at least one updated valuation prepared at the time of the
closing of the stock offering.
RP Financial agrees to deliver the valuation appraisal and subsequent
updates, in writing, to Community at the above address in conjunction with the
filing of the regulatory application. Subsequent updates will be filed promptly
as certain events occur which would warrant the preparation and filing of such
valuation updates. Further, RP Financial agrees to perform such other services
as are necessary or required in connection with the regulatory review of the
appraisal and respond to the regulatory comments, if any, regarding the
valuation appraisal and subsequent updates.
<PAGE>
RP Financial, LC.
Mr. Larry E. Hermreck
April 2, 1996
Page 2
Fee Structure and Payment Schedule
- ----------------------------------
Community agrees to pay RP Financial a fixed fee of $17,500 for these
appraisal services, plus reimbursable expenses. Payment of these fees shall be
made according to the following schedule:
o $5,000 upon execution of the letter of agreement engaging RP
Financial's appraisal services;
o $10,000 upon delivery of the completed original appraisal report; and
o $2,500 upon completion of the conversion to cover all subsequent
valuation updates that may be required.
The Bank will reimburse RP Financial for out-of-pocket expenses incurred in
preparation of the valuation. Such out-of-pocket expenses will likely include
travel, printing, telephone, facsimile, shipping, computer and data services. RP
Financial will agree to limit reimbursable expenses to a cap of $5,000 for the
appraisal and concurrent planning engagements, subject to written authorization
from the Bank to exceed such level.
In the event Community shall, for any reason, discontinue the proposed
conversion prior to delivery of the completed documents set forth above and
payment of the respective progress payment fees, Community agrees to compensate
RP Financial according to RP Financial's standard billing rates for consulting
services based on accumulated and verifiable time expenses, not to exceed the
respective fee caps noted above, after giving full credit to the initial
retainer fee. RP Financial's standard billing rates range from $75 per hour for
research associates to $250 per hour for managing directors.
If during the course of the proposed transaction, unforeseen events occur
so as to materially change the nature or the work content of the services
described in this contract, the terms of said contract shall be subject to
renegotiation by Community and RP Financial. Such unforeseen events shall
include, but not be limited to, major changes in the conversion regulations,
appraisal guidelines or processing procedures as they relate to conversion
appraisals, major changes in management or procedures, operating policies or
philosophies, and excessive delays or suspension of processing of conversion
applications by the regulators such that completion of the conversion
transaction requires the preparation by RP Financial of a new appraisal or
financial projections.
Representations and Warranties
- ------------------------------
Community and RP Financial agree to the following:
1. The Bank agrees to make available or to supply to RP Financial such
information with respect to its business and financial condition as RP Financial
may reasonably request in order to provide the aforesaid valuation. Such
information heretofore or hereafter supplied or made available to RP Financial
shall include: annual financial statements, periodic regulatory filings and
material agreements, debt instruments, off balance sheet assets or liabilities,
commitments and contingencies, unrealized gains or losses and corporate books
and records. All information provided by the Bank to RP Financial shall remain
strictly confidential (unless such information is otherwise made available to
the public), and if conversion is not consummated or the services of RP
Financial are terminated hereunder, RP Financial shall upon request promptly
return to the Bank the original and any copies of such information.
<PAGE>
RP Financial, LC.
Mr. Larry E. Hermreck
April 2, 1996
Page 3
2. The Bank hereby represents and warrants to RP Financial that any
information provided to RP Financial does not and will not, to the best of the
Bank's knowledge, at the times it is provided to RP Financial, contain any
untrue statement of a material fact or fail to state a material fact necessary
to make the statements therein not false or misleading in light of the
circumstances under which they were made.
3. (a) The Bank agrees that it will indemnify and hold harmless RP
Financial, any affiliates of RP Financial, the respective directors, officers,
agents and employees of RP Financial or their successors and assigns who act for
or on behalf of RP Financial in connection with the services called for under
this agreement (hereinafter referred to as "RP Financial"), from and against any
and all losses, claims, damages and liabilities (including, but not limited to,
all losses and expenses in connection with claims under the federal securities
laws) attributable to (i) any untrue statement or alleged untrue statement of a
material fact contained in the financial statements or other information
furnished or otherwise provided by the Bank to RP Financial, either orally or in
writing; (ii) the omission or alleged omission of a material fact from the
financial statements or other information furnished or otherwise made available
by the Bank to RP Financial; or (iii) any action or omission to act by the Bank,
or the Bank's respective officers, directors, employees or agents which action
or omission is willful or negligent. The Bank will be under no obligation to
indemnify RP Financial hereunder if a court determines that RP Financial was
negligent or acted in bad faith with respect to any actions or omissions of RP
Financial related to a matter for which indemnification is sought hereunder.
Any time devoted by employees of RP Financial to situations for which
indemnification is provided hereunder, shall be an indemnifiable cost payable by
the Bank at the normal hourly professional rate chargeable by such employee.
(b) RP Financial shall give written notice to the Bank of such claim
or facts within thirty days of the assertion of any claim or discovery of
material facts upon which the RP Financial intends to base a claim for
indemnification hereunder. In the event the Bank elects, within seven days of
the receipt of the original notice thereof, to contest such claim by written
notice to RP Financial, RP Financial will be entitled to be paid any amounts
payable by the Bank hereunder within five days after the final determination of
such contest either by written acknowledgement of the Bank or a final judgment
of a court of competent jurisdiction. If the Bank does not so elect, RP
Financial shall be paid promptly and in any event within thirty days after
receipt by the Bank of the notice of the claim.
(c) The Bank shall pay for or reimburse the reasonable expenses,
including attorneys' fees, incurred by RP Financial in advance of the final
disposition of any proceeding within thirty days of the receipt of such request
if RP Financial furnishes the Bank: (1) a written statement of RP Financial's
good faith belief that it is entitled to indemnification hereunder; and (2) a
written undertaking to repay the advance if it ultimately is determined in a
final adjudication of such proceeding that it or he is not entitled to such
indemnification.
(d) In the event the Bank does not pay any indemnified loss or make
advance reimbursements of expenses in accordance with the terms of this
agreement, RP Financial shall have all remedies available at law or in equity to
enforce such obligation.
It is understood that, in connection with RP Financial's above-mentioned
engagement, RP Financial may also be engaged to act for the Bank in one or more
additional capacities, and that the terms of the original engagement may be
embodied in one or more separate agreements. The provisions of Paragraph 3
herein shall apply to the original engagement, any such additional engagement,
any modification of the original engagement or such additional engagement and
shall remain in full force and effect following the completion or termination of
RP Financial's engagement(s). This agreement constitutes the entire
understanding of the Bank and RP Financial concerning the subject matter
addressed herein, and such contract shall be governed and construed in
accordance with the laws of the Commonwealth of Virginia. This agreement may
not be modified, supplemented or amended except by written agreement executed by
both parties.
<PAGE>
RP Financial, LC.
Mr. Larry E. Hermreck
April 2, 1996
Page 4
Community and RP Financial are not affiliated, and neither Community nor RP
Financial has an economic interest in, or is held in common with, the other and
has not derived a significant portion of its gross revenues, receipts or net
income for any period from transactions with the other.
* * * * * * * * * * *
Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to RP Financial a signed copy of this letter, together with
the initial retainer fee of $5,000.
Sincerely,
/s/ Ronald S. Riggins
Ronald S. Riggins
President and Managing Director
Agreed To and Accepted By: Larry E. Hermreck /s/ Larry E. Hermreck
-----------------------------
Chief Executive Officer
Upon Authorization by the Board of Directors For: Community Bank of Excelsior
Springs
Excelsior Springs, Missouri
4-4-96
Date Executed: ___________________________________
<PAGE>
Exhibit 99.2
- --------------------------------------------------------------------------------
CONVERSION APPRAISAL REPORT
CBES BANCORP, INC.
PROPOSED HOLDING COMPANY FOR
COMMUNITY BANK OF EXCELSIOR SPRINGS, A
SAVINGS BANK
Excelsior Springs, Missouri
Stock Prices As Of:
June 14, 1996
- --------------------------------------------------------------------------------
Prepared By:
RP Financial, LC.
1700 North Moore Street
Suite 2210
Arlington, Virginia 22209
<PAGE>
[LETTERHEAD APPEARS HERE]
June 14, 1996
Board of Directors
Community Bank of Excelsior Springs, A Savings Bank
1001 N. Jesse James Road
Excelsior Springs, Missouri 64024-1201
Gentlemen:
At your request, we have completed and hereby provide an independent
appraisal of the estimated pro forma market value of the common stock which is
to be issued by CBES Bancorp, Inc. (the "Holding Company"), in connection with
the mutual-to-stock conversion of Community Bank of Excelsior Springs, A Savings
Bank, (the "Bank"). It is our understanding that the Holding Company will offer
its stock in a subscription offering to the Bank's Eligible Account Holders, to
the Bank's Employee Stock Ownership Plan ("ESOP"), to Supplemental Eligible
Account Holders of the Bank, and to Other Members of the Bank. Subject to these
priorities, shares of Common Stock may also be offered in the Community
offering. This appraisal is furnished pursuant to the requirements of Regulation
563b.7 and has been prepared in accordance with the "Guidelines for Appraisal
Reports for the Valuation of Savings and Loan Associations Converting from
Mutual to Stock Form of Organization" of the Office of Thrift Supervision
("OTS"), including the most recent revisions as of October 21, 1994, and
applicable regulatory interpretations thereof.
Description of Reorganization
- -----------------------------
The Board of Directors of the Bank has adopted a Plan of Conversion (the
"Plan") pursuant to which the Bank will convert from a federally chartered
mutual savings bank to a federally-chartered stock savings bank. In the
reorganization process, to become effective concurrent with the completion of
the stock sale, which is targeted for the third calendar quarter of 1996: (1)
the Bank will issue all of its outstanding shares to the Holding Company; (2)
the Holding Company will sell in a subscription offering and possible community
offering Holding Company stock in the amount equal to the appraised value of the
Bank; and (3) up to 50 percent of the net proceeds will be retained at the
holding company level with the balance used to purchase the stock of the Bank.
RP Financial, LC.
- -----------------
RP Financial, LC. ("RP Financial") is a financial consulting firm that
among other services specializes in financial valuations and analyses of
business enterprises and securities. The background and experience of RP
Financial are detailed in Exhibit V-1. We believe that, except for the fee we
will receive for our appraisal of the shares to be issued by the Holding Company
and assistance in preparing the business plan to accompany the conversion
application, we are independent of the Bank, the Holding Company and other
parties engaged by the Bank to assist in the stock issuance process.
<PAGE>
RP Financial, LC.
Board of Directors
June 14, 1996
Page 2
Valuation Methodology
- ---------------------
In preparing our appraisal, we have reviewed the Holding Company's
Application for Approval of Conversion, including the Proxy Statement, as filed
with the OTS and the Holding Company's Form S-B2 registration statement as filed
with the Securities and Exchange Commission ("SEC"). We have conducted an
analysis of the Bank and the Holding Company (hereinafter, collectively referred
to as "the Bank"), that has included due diligence related discussions with the
Bank's management; KPMG Peat Marwick LLP, the Bank's independent auditor; Luse
Lehman Gorman Pomerenk & Schick, the Bank's special counsel; and Trident
Securities, Inc., who has been retained by the Bank as a financial and marketing
advisor in connection with the stock offering. The assumptions set forth in the
appraisal were based on such discussions, but all valuation conclusions were
reached independently of such discussions. In addition, where appropriate, we
have considered information based on other available published sources that we
believe are reliable. While we believe the information and data gathered from
all these sources are reliable we cannot guarantee the accuracy or completeness
of such information.
We have investigated the competitive environment within which the Bank
operates, and have assessed the Bank's relative strengths and weaknesses. We
have kept abreast of the changing regulatory and legislative environment and
analyzed the potential impact on the Bank and the industry as a whole. We have
analyzed the potential effects of the stock offering on the Bank's operating
characteristics and financial performance as they relate to the pro forma market
value of the shares to be issued in the conversion. We have reviewed the economy
in the Bank's primary market area and have compared the Bank's financial
performance and condition with selected publicly-traded thrift institutions
operating in Missouri and other regions. We have reviewed conditions in the
securities markets in general and for thrift stocks in particular.
Our appraisal is based on the Bank's representation that the information
contained in the regulatory applications and additional information furnished to
us by the Bank and its independent auditors are truthful, accurate and complete.
We did not independently verify the financial statements and other information
provided by the Bank and its independent auditors, nor did we independently
value the individual assets, liabilities or contingent liabilities of the Bank.
The valuation considers the Bank only as a going concern and should not be
considered as an indication of the liquidation value of the Bank.
Our appraised value is predicated on a continuation of the current
operating environment for the Bank and for all thrifts. Changes in the local and
national economy, the legislative and regulatory environment, the stock market,
interest rates, and other external forces (such as natural disasters) may occur
from time to time, often with great unpredictability and may materially impact
the value of thrift stocks as a whole or the Bank's value alone. To the extent
that such factors can be foreseen, they have been factored into our analysis.
Pro forma market value is defined as the price at which the Holding
Company's shares would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and both having
reasonable knowledge of relevant facts.
Valuation Conclusion
- --------------------
It is our opinion that, as of June 14, 1996, the aggregate pro forma market
value of the Bank and the Holding Company, was $10,500,000 at the midpoint,
equal to 1,050,000 shares offered at a per share value of $10.00. Pursuant to
OTS conversion guidelines, the 15 percent offering range indicates a minimum
value of $8,925,000 and a maximum value of $12,075,000. Based on the $10.00 per
share offering price, this valuation range equates to an offering of 892,500
shares at the minimum to 1,207,500 shares at the maximum. The Holding Company's
offering also includes a provision for a superrange maximum value, which if
fully exercised, would result in an offering size of $13,886,250, equal to
1,388,625 shares at the $10.00 per share offering price.
<PAGE>
RP Financial, LC.
Board of Directors
June 14, 1996
Page 3
Limiting Factors and Considerations
- -----------------------------------
Our valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing shares of the
common stock to be issued by the holding company. Moreover, because such
valuation is necessarily based upon estimates and projections of a number of
matters, all of which are subject to change from time to time, no assurance can
be given that persons who purchase shares of common stock in the initial
offering will thereafter be able to sell such shares at prices related to the
foregoing valuation of the pro forma market value. The appraisal does not take
into account any trading activity with respect to the purchase and sale of
common stock in the secondary market, and reflects only a valuation range as of
this date for the pro forma market value of the Bank immediately upon issuance
of the stock.
RP Financial's valuation was determined based on the financial condition
and operations of the Bank as of March 31, 1996, the date of the financial data
included in the Holding Company's Prospectus.
RP Financial is not a seller of securities within the meaning of any
federal and state securities laws and any report prepared by RP Financial shall
not be used as an offer or solicitation with respect to the purchase or sale of
any securities. RP Financial maintains a policy which prohibits the company, its
principals or employees from purchasing stock of its client institutions.
The valuation will be updated should market conditions or changes in the
Bank's operating results warrant. The valuation will also be updated at the
completion of the Holding Company's stock offering. These updates will consider,
among other things, any developments or changes in the Bank's financial
performance and condition, management policies, and current conditions in the
equity markets for thrift shares, both existing issues and new issues. Also,
these updates will consider changes in other external factors which impact value
including, but not limited to: various changes in the legislative and regulatory
environment (including changes in the appraisal guidelines), the stock market
and the market for thrift stocks, and interest rates. Should any such new
developments or changes be material, in our opinion, to the valuation of the
shares, appropriate adjustments to the estimated pro forma market value will be
made. The reasons for any such adjustments will be explained in the update at
the date of the release of the update.
Respectfully submitted,
RP FINANCIAL, LC.
/s/ Ronald S. Riggins
Ronald S. Riggins
President and Managing
Director
/s/ Timothy M. Biddle
Timothy M. Biddle
Vice President
<PAGE>
RP FINANCIAL, LC.
TABLE OF CONTENTS
COMMUNITY BANK OF EXCELSIOR SPRINGS
Excelsior Springs, Missouri
<TABLE>
<CAPTION>
PAGE
DESCRIPTION NUMBER
- ----------- ------
<S> <C>
CHAPTER ONE OVERVIEW AND FINANCIAL ANALYSIS
- -----------
Strategic Discussion 1.1
Balance Sheet Trends 1.4
Income and Expense Trends 1.7
Interest Rate Risk Management 1.10
Lending Activities and Strategy 1.10
Asset Quality 1.13
Funding Composition and Strategy 1.13
Subsidiary 1.14
Legal Proceedings 1.14
CHAPTER TWO MARKET AREA
- -----------
Introduction 2.1
National Economic Factors 2.2
Market Area Demographics 2.3
Economy 2.5
Market Area Deposit Characteristics 2.6
Competition 2.6
CHAPTER THREE PEER GROUP ANALYSIS
- -------------
Selection of Peer Group 3.1
Financial Condition 3.5
Income and Expense Components 3.8
Loan Composition 3.10
Credit Risk 3.12
Interest Rate Risk 3.12
Summary 3.15
</TABLE>
<PAGE>
RP FINANCIAL, LC.
TABLE OF CONTENTS
COMMUNITY BANK OF EXCELSIOR SPRINGS
Excelsior Springs, Missouri
(continued)
<TABLE>
<CAPTION>
PAGE
DESCRIPTION NUMBER
----------- ------
<S> <C>
CHAPTER FOUR VALUATION ANALYSIS
- -------------
Introduction 4.1
Appraisal Guidelines 4.1
Valuation Analysis 4.2
1. Financial Condition 4.2
2. Profitability, Growth and Viability of Earnings 4.3
3. Asset Growth 4.4
4. Primary Market Area 4.4
5. Dividends 4.6
6. Liquidity of the Shares 4.7
7. Marketing of the Issue 4.7
A. The Public Market 4.7
B. The New Issue Market 4.12
C. The Acquisition Market 4.15
8. Management 4.15
9. Effect of Government Regulation and Regulatory Reform 4.16
Summary of Adjustments 4.16
Valuation Approaches 4.16
1. Price-to-Earnings ("P/E") 4.18
2. Price-to-Book ("P/B") 4.18
3. Price-to-Assets ("P/A") 4.19
Valuation Conclusion 4.19
</TABLE>
<PAGE>
RP Financial, L.C.
LIST OF TABLES
COMMUNITY BANK OF EXCELSIOR SPRINGS
Excelsior Springs, Missouri
<TABLE>
<CAPTION>
TABLE
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
<S> <C> <C>
1.1 Summary Balance Sheet Data 1.5
1.2 Historical Income Statement 1.8
2.1 Summary Demographic Data 2.4
2.2 Major Employers in Excelsior Springs 2.5
2.3 Unemployment Rates 2.6
2.4 Deposit Summary 2.7
3.1 Peer Group of Publicly-Traded Thrifts 3.3
3.2 Balance Sheet Composition and Growth Rates 3.6
3.3 Income as a Percent of Average Assets and Yields, Costs, Spreads 3.9
3.4 Loan Portfolio Composition Comparative Analysis 3.11
3.5 Peer Group Credit Risk Comparative Analysis 3.13
3.6 Interest Rate Risk Comparative Analysis 3.14
4.1 Market Area Unemployment Rates 4.5
4.2 Recent Conversions: Conversion Pricing Characteristics 4.13
4.3 Market Pricing Comparatives 4.14
4.4 Public Market Pricing 4.21
</TABLE>
<PAGE>
RP Financial, LC.
Page 1.1
I. OVERVIEW AND FINANCIAL ANALYSIS
Community Bank of Excelsior Springs, A Savings Bank ("Community Bank", or
the "Bank") is a federally-chartered mutual savings bank headquartered in
Excelsior Springs, Missouri, a town in northern Clay County, Missouri. The Bank
also operates a branch in the nearby town of Kearney which was opened in January
1995. The Bank considers its primary market for loans and deposits to consist of
Clay and Ray Counties, supplemented by business generated from customers in the
contiguous counties of Clinton and Lafayette (see Exhibit I-1). The Bank was
chartered as a Missouri mutual savings and loan association in 1931 under the
name Excelsior Springs Savings and Loan Association, and changed its name to its
current form in 1991. In 1995, the Bank amended its charter to become a federal
mutual savings bank. The Bank is currently a member of the Federal Home Loan
Bank ("FHLB") system and is regulated by the Office of Thrift Supervision
("OTS"). The Bank's deposits are insured up to the regulatory maximums by the
Savings Association Insurance Fund ("SAIF") of the Federal Deposit Insurance
Corporation ("FDIC"). As of March 31, 1996, the Bank maintained $86.2 million in
assets, $67.9 million in deposits and $7.9 million in retained earnings, equal
to 9.15 percent of assets.
The Bank's Board of Directors has adopted a Plan of Conversion, in which
the Bank will reorganize from a federal RP Financial, LC. mutual savings bank to
a federal stock savings bank, issuing all of its common stock to a newly formed
unitary savings and loan holding company called CBES Bancorp, Inc. (the "Holding
Company"). Concurrently, the Holding Company will issue in a subscription and
possible community offering common stock in an amount equal to the appraised pro
forma market value of the Bank. The closing of the conversion and stock sale is
targeted for the third calendar quarter of 1996.
Strategic Discussion
- --------------------
The Bank is a community-oriented thrift dedicated to meeting the borrowing
and savings needs of its local customer base. Throughout its history, the Bank
has pursued a traditional thrift operating strategy of 1-4 family mortgage
lending in Clay and Ray Counties, Missouri, which are a combination of suburban
and rural markets located adjacent to the Kansas City metropolitan area. In
recent years, the Bank has also become very active in construction lending in
conjunction with the relatively rapid suburban development that has been
occurring north of Kansas City, particularly in southern Clay County. The
majority of this lending is speculative construction lending. The Bank is also
an active originator of consumer loans, the majority of which have consisted of
automobile loans. To a lesser extent, the Bank originates multi-family
residential/commercial real estate mortgages (collectively, "income property
loans"), land loans and various other types of consumer loans. Excess cash at
the Bank is reinvested into deposits in other financial institutions and various
other types of low-
<PAGE>
RP Financial, LC.
Page 1.2
risk investment securities, including mortgage-backed securities ("MBS"). By
emphasizing a traditional thrift operating strategy through the origination of
primarily 1-4 family mortgages, the Bank has maintained strong asset quality in
recent years. The Bank has also effectively limited its exposure to interest
rate risk through its lending strategy, which has involved selling the majority
of fixed-rate mortgages in the secondary market, retaining adjustable rate
mortgages ("ARMs") for portfolio, and growing the portfolios of shorter-term
construction and consumer loans. Community Bank's funding needs have been met
primarily with retail deposits, although the Bank has borrowed funds from the
FHLB of Des Moines from time to time to meet loan demand.
Notwithstanding the recent growth in construction loans, the majority of
Community Bank's loans consist of relatively low credit risk residential
mortgages (approximately 61 percent of the loan portfolio consists of 1-4 family
residential mortgages). This, together with the Bank's generally conservative
underwriting standards, has reduced credit risk in recent years. The ratio of
non-performing assets ("NPAs", consisting of real estate owned and other
repossessed assets, non-accruing loans and delinquent accruing loans) to assets
has stayed below 1.00 percent of assets during the last two fiscal years and as
of March 31, 1996. The majority of the NPAs are secured by residential mortgages
in which management believes exposure to losses is minimal. The Bank realizes
that speculative construction loans represent significantly more credit risk
than 1-4 family residential mortgages, and intends to continue to closely
monitor its exposure to credit risk in light of the anticipated growth in the
construction loan portfolio.
The Bank's operating strategy has also resulted in low exposure to interest
rate risk in recent years. In addition to selling the majority of fixed-rate
mortgages in the secondary market and retaining mostly ARMs for portfolio, the
Bank has increased the interest rate sensitivity of its loan portfolio by
originating construction loans and consumer loans. The Bank also attempts to
lengthen the maturity of its deposit base whenever possible, and may use
borrowings as an asset-liability management tool when maturities and rates are
attractive. The Bank's success at managing interest rate risk is shown by net
portfolio value ("NPV") analysis prepared by the OTS as of March 31, 1996, which
projected that the NPV would decline by only 9 percent in the event of an
instantaneous 200 basis point increase in interest rates. Moreover, the Bank's
internally generated gap to assets table indicates a one year gap to assets
ratio of positive 10.44 percent. Community Bank intends to continue to adhere to
an operating strategy that limits exposure to interest rate risk.
The Bank has recorded somewhat variable earnings over the past five and
three quarter fiscal years due to fluctuations in non-recurring items. The Bank
derives the majority of its earnings from net interest income exceeding
operating expenses, with the net interest margin reflecting primarily
residential mortgages and retail deposits. In recent years, the Bank has
experienced a decline in net interest income, as funding costs have increased,
and a concurrent increase in operating expenses due to the increased loan volume
and the
<PAGE>
RP Financial, LC.
Page 1.3
increased expenses associated with the new office in Kearney. These two factors
have combined to bring the Bank's core earnings to lower levels than were
recorded in earlier years. Going forward, the Bank anticipates that earnings
will increase due to lower funding costs from the increase in capital, and the
favorable yields on the construction loan portfolio and deposit growth at the
Kearney branch.
A key component of the Bank's operating strategy for the future is to
convert to the stock form of ownership. The conversion is intended to accomplish
several objectives: provide the opportunity for stock ownership to employees,
depositors and management; enhance efforts to serve the local community by
providing additional means for participation in community development, community
redevelopment and other types of community-related programs; reduce exposure to
credit risk by increasing capital; and, increase earnings. The Bank is currently
a well-capitalized institution (9.1 percent of assets at March 31, 1996); the
additional capital from the stock conversion will be used to further improve the
Bank's competitive position in the environment of consolidation within the
financial services industry. The additional capital will also provide the Bank
with the flexibility to seek and implement better ways to serve its customer
base. Such activities will include construction lending and may include
branching or acquisition in the future, although there are no plans for
branching or acquisition at this time. Most importantly, the proceeds raised in
the conversion will provide the Bank with an additional capital cushion to
safeguard against contingencies such as earnings declines from an unexpected
rise in interest rates or credit losses. As disclosed in the prospectus, the
proceeds from stock conversion are anticipated to be invested as follows.
o CBES Bancorp, Inc.. Approximately 50 percent of the net proceeds of
-------------------
conversion will be retained by the Holding Company. Such funds will be
invested initially into U.S. Treasury and agency securities with
laddered maturities ranging from 6 months to five years, and a loan to
the Bank's Employee Stock Ownership Plan ("ESOP") to fund stock
purchases in the conversion. The Holding Company funds are anticipated
to be potentially utilized for various corporate purposes, including
possible payment of regular and/or special dividends, stock
repurchases or expansion through acquisition (no present plans).
o The Bank. Approximately 50 percent of the net proceeds of the
---------
conversion will be infused into the Bank in exchange for all of the
Bank's newly-issued stock. Proceeds infused into the Bank will
initially be held in short-term cash and investments until the Bank is
able to redeploy the funds into loans receivable pursuant to its
lending objectives. The Bank intends to eventually deploy most of the
proceeds into loans receivable.
The Bank presently has no intention to pursue significant asset growth to
leverage its new capital. Additionally, the Bank presently has no plans to
further diversify the loan portfolio or open new branches (either through de
novo or acquired branches). Instead, the Bank's business plan calls for modest
asset growth and the Board of Directors plans to initially operate in an
overcapitalized position, fully recognizing that the return on equity ("ROE") is
expected to fall below the average for publicly-traded thrifts.
<PAGE>
RP Financial, LC.
Page 1.4
Balance Sheet Trends
- --------------------
Over the past five and three quarter fiscal years, the Bank has experienced
moderate asset growth of 5.7 percent annually. Between the end of fiscal 1991
and the end of fiscal 1994, assets declined moderately as the Bank experienced
deposit outflows and was selling most of its loan originations in the secondary
market for asset/liability management purposes. During 1995, in response to the
construction boom that started in areas north of Kansas City, including southern
Clay County, the Bank began placing more of an emphasis on construction lending
to take advantage of the attractive yields such loans offered. To meet the
strong demand for construction loans, the Bank grew its deposit base and
borrowed funds from the FHLB of Des Moines. As a result, assets grew from $68.5
million at June 30, 1994 to $93.1 million at June 30, 1995, primarily through
loan portfolio growth, which grew from $53.5 million at June 30, 1994 to $78.9
million at June 30, 1995. During the nine months ended March 31, 1996, assets
declined as the Bank repaid a portion of the FHLB advances with the proceeds
from the sale of MBS and investment securities.
Since fiscal year end 1991, the portfolios of MBS and cash and investments
have fluctuated. MBS peaked at $6.4 million at June 30, 1993 but declined to
$0.549 million by March 31, 1996 as the Bank sold MBS. The portfolio of cash and
investments has declined each year since fiscal 1991 as excess cash and cash
flow from maturing investments has been reinvested into loans receivable or MBS.
At March 31, 1996, the portfolio of cash and investments had declined to $4.9
million, or 5.7 percent of assets, down from a five year peak of $18.0 million,
or 27.1 percent of assets, at June 30, 1991. Positive earnings during the past
five and three quarter fiscal years has led to steady capital growth and the
capital to assets ratio increased from 7.8 percent at fiscal year end 1991 to
9.1 percent at March 31, 1996. Exhibit I-3 highlights the Bank's key historical
operating ratios.
Loans receivable comprised the majority of the Bank's assets at March 31,
1996, totaling $77.3 million, or 89.7 percent of assets. An emphasis on 1-4
family residential lending is reflected in the Bank's loan portfolio, as 61.0
percent of total loans are secured by permanent 1-4 family mortgages. The Bank
has increased its loan portfolio diversification in recent years by growing the
portfolio of construction loans (20.8 percent of total loans) and consumer loans
(12.4 percent). The Bank has more strongly emphasized construction lending to
take advantage of the construction boom occurring in Clay County and surrounding
areas and for the attractive yields and shorter terms such loans offer. The
majority of the Bank's construction loans are speculative loans originated
directly to builders. The Bank has also been active in consumer lending,
primarily through direct automobile lending. To a lesser extent, the Bank
originates land loans (4.2 percent of total loans), and income property loans
(1.6 percent of total loans), although such loans are not actively solicited by
the Bank but are originated on a case-by-case basis usually to existing Bank
customers. Permanent 1-4 family residential mortgages have always comprised the
largest portion of the loan portfolio.
<PAGE>
Table 1.1
Community Bank of Excelsior Springs, A Savings Bank
Historical Balance Sheets
(Amount and Percent of Assets)
<TABLE>
<CAPTION>
For the Fiscal Year Ended June 30,
--------------------------------------------------------------------------------------------
1991 1992 1993
-------------------------- --------------------- ---------------------------
Amount Pct Amount Pct Amount Pct
------ --- ------ --- ------ ---
($000) (%) ($000) (%) ($000) (%)
<S> <C> <C> <C> <C> <C> <C>
Total Amount of:
Assets $66,136 100.0%% $65,211 100.0% $66,098 100.0%
Cash and Investments 17,952 27.1% 14,439 22.1% 11,186 16.9%
Mortgage-Backed Securities 3,985 6.0% 6,382 9.8% 6,406 9.7%
Loans receivable (net) 42,943 64.9% 42,540 65.2% 46,799 70.8%
Deposits 60,566 91.6% 58,666 90.0% 58,750 65.9%
FHLB Advances 0 0.0% 0 0.0% 0 0.0%
Retained Earnings 5,143 7.8% 5,500 8.4% 6,309 9.5%
<CAPTION>
Annual
---------------------------------------------------- Growth
1994 1995 March 31, 1996 Rate
------------------------- ------------------------ ----------------------- ----
Amount Pct Amount Pct Amount Pct Pct
------ --- ------ --- ------ --- ---
($000) (%) ($000) (%) ($000) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
Total Amount of:
Assets $68,543 100.0% $93,100 100.0% $86,168 100.0% 5.73%
Cash and Investments 7,748 11.3% 6,305 6.8% 4,876 5.7% -24.00%
Mortgage-Backed Securities 4,834 7.1% 3,870 4.2% 549 0.8% -34.12%
Loans receivable (net) 53,453 76.0% 78,880 84.7% 77,273 89.7% 13.17%
Deposits 60,180 87.8% 68,274 73.3% 67,916 76.8% 2.44%
FHLB Advances 0 0.0% 15,877 17.1% 9,000 10.4% NM
Retained Earnings 6,981 10.2% 7,481 8.0% 7,883 9.1% 9.41%
</TABLE>
____________________________
(1) Ratios are as a percent of ending assets.
Source: Audited financial reports. RP Financial calculations.
<PAGE>
RP Financial, LC.
Page 1.6
The second largest component of interest-earning assets ("IEA") was the
portfolio of cash and investment securities, which totaled $4.9 million, or 5.7
percent of assets, at March 31, 1996 (see Exhibit I-4). The cash and investments
portfolio consisted of cash and equivalents ($0.8 million), interest-earning
deposits in other financial institutions ($1.3 million), federal agency
obligations ($2.0 million), and FHLB stock ($0.8 million). In previous years the
Bank had an investment in a mutual fund which was sold in fiscal 1995 for a
loss. Over the past five and three quarter fiscal years, the Bank has used cash
flow from maturing investments to fund loan originations, and the cash and
investments portfolio has declined to current levels from $18.0 million at June
30, 1991. Management utilizes the portfolio of cash and investments for
liquidity purposes and as part of the asset-liability management strategy, and
the investments portfolio consists of short- to intermediate-term instruments.
Management classifies the portfolio of federal agency obligations as "available-
for-sale". Going forward, the Bank intends to continue to purchase generally low
risk investments and the composition of the cash and investments portfolio is
not anticipated to change significantly, although the level will initially
increase on a post-conversion basis.
The Bank also maintains a small portfolio of MBS which totaled $0.5
million, or 0.6 percent of assets, at March 31, 1996. In the past, MBS have been
purchased as an alternative investment to loans receivable, although the
portfolio balance has declined in recent years due to low interest rates, rapid
repayments, and the redeployment of the cash flow into loans. The MBS portfolio
consists primarily of pass-through securities guaranteed by the Federal Home
Loan Mortgage Corporation ("FHLMC"), and a nominal balance of securities issued
by the Government National Mortgage Association ("GNMA"). Going forward, the
Bank may continue to purchase MBS with excess funds provided interest rates are
favorable.
The Bank's assets were primarily funded with retail deposits and retained
earnings at March 31, 1996. Retail deposits have consistently met the majority
of the Bank's funding, and totaled $67.9 million, or 78.8 percent of assets, at
March 31, 1996. Strong competition for deposits and disintermediation in the low
interest rate environment have limited opportunities for deposit growth at the
Bank. The deposit growth recorded during fiscal 1995 was attributable to a
temporary promotion of higher rate, short-term CDs, and deposits were measured
at $68.2 million at June 30, 1995. Since that time, the Bank has experienced
some deposit runoff.
Borrowings have been used by the Bank in recent periods for the purpose of
funding construction loan originations. During fiscal 1995, the Bank borrowed
approximately $16.0 million in short- to intermediate-term advances from the
FHLB of Des Moines to meet the strong demand for construction loans. The Bank
has since repaid $7.0 million of these borrowings, and FHLB advances totaled
$9.0 million, or 10.4 percent of assets, at March 31, 1996. Going forward, the
Bank may supplement deposit funding with borrowings from time to time, although
deposits are expected to continue to comprise the majority of funding
liabilities.
<PAGE>
RP Financial, LC.
Page 1.7
Positive earnings during the past five and three-quarter fiscal years
contributed to an annual capital growth rate of 9.4 percent for the Bank.
Capital growth outpaced asset growth during this period and the capital ratio
increased from 7.8 percent at June 30, 1991 to 9.1 percent at March 31, 1996.
All of the Bank's capital is tangible capital, and the Bank maintains capital
surpluses relative to all regulatory capital requirements. The addition of stock
proceeds will increase the capital surpluses.
Income and Expense Trends
- -------------------------
Table 1.2 displays the Bank's earnings over the past five fiscal years and
for the trailing twelve months ended March 31, 1996. The Bank has recorded
profitable operations since 1991 but earnings have dropped off since peak levels
in fiscal 1993. The recent decline in earnings has been attributable to higher
interest expense and higher operating expenses. The reinvestment of interest-
free capital received in the stock offering should serve to improve net interest
income in future periods. Non-recurring items have had a varying impact on the
Bank's earnings since fiscal 1991 as the Bank has sold IEA for gains and losses
and recorded a loss on the sale of a mutual fund in fiscal 1995.
Exhibit I-5 highlights the changes in the Bank's asset yields and cost of
funds over the past two and three quarter years, which have influenced the level
of net interest income. Spreads narrowed by 49 basis points between fiscal 1994
and 1995 as the special promotion on CD accounts and the increase in the FHLB
advances both increased the Bank's cost of funds by 95 basis points, while asset
yields increased by only 46 basis points. The spread narrowed further for the
nine months ended March 31, 1996, due to continued high CD costs, which drove up
the cost of funds beyond the increase in asset yields experienced by the Bank
during this period. During these periods, the Bank's net interest income
declined from 3.81 percent of average assets in fiscal 1994 to 3.31 percent in
fiscal 1995, and then to 3.12 percent for the twelve months ended March 31,
1996. These trends indicate that although management has been successful in
reducing interest rate risk, the Bank's net interest income is still influenced
by changes in interest rates. Going forward, the Bank anticipates that net
interest income will increase as the higher costing CDs mature and are replaced
with lower costing funds.
The Bank derives significant income from non-interest sources. For the
twelve months ended March 31, 1996, non-interest operating income totaled $0.405
million, or 0.47 percent of average assets. Such income consists of loan
servicing fees, loan origination fees on loans sold, other loan fees and
charges, deposit fees, and other miscellaneous sources of income. The Bank's
secondary market activity has successfully boosted such income by increasing the
portfolio of loans serviced for others. Going forward, the Bank anticipates that
non-interest income will increase with the growth in the portfolio of loans
serviced for others.
<PAGE>
<TABLE>
<CAPTION>
Table 1.2
Community Bank of Excelsior Springs, A Savings Bank
Historical Income Statements
(Amount and Percent of Avg. Assets)(1)
For the Fiscal Year Ended June 30
----------------- ---------------- ---------------- --------------- ----------------
1991 1992 1993 1994 1995
----------------- ---------------- ---------------- --------------- ----------------
Amount Pct Amount Pct Amount Pct Amount Pct Amount Pct
------ --- ------ --- ------ --- ------ --- ------ ---
($000) (%) ($000) (%) ($000) (%) ($000) (%) ($000) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Income $6,066 9.41% $5,722 8.71% $4,914 7.48% $4,656 6.92% $5,818 7.20%
Interest Expense (4,277) -6.63% (3,462) -5.27% (2,472) -3.76% (2,093) -3.11% (3,146) -3.89%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Interest Income $1,789 2.77% $2,260 3.44% $2,442 3.72% $2,563 3.81% $2,672 3.31%
Provision for Loan Losses 0 0.00% (91) -0.14% (28) -0.04% (34) -0.05% (171) -0.21%
- ----- --- ------ --- ------ --- ------ ---- ------
Net Interest Income after Provisions $1,789 2.77% $2,169 3.30% $2,414 3.68% $2,529 3.76% $2,501 3.09%
Other Income 362 0.56% 285 0.43% 455 0.69% 369 0.55% 369 0.46%
Operating Expense (1,449) -2.25% (1,553) -2.36% (1,712) -2.61% (1,849) -2.75% (2,133) -2.64%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net Operating Income $702 1.09% $902 1.37% $1,157 1.76% $1,049 1.56% $737 0.91%
Non-Operating Income
- --------------------
Net gain(loss) on sale of IEA ($75) -0.12% ($116) -0.18% $26 0.04% $4 0.01% ($272) -0.34%
Net gain(loss) on REO 0 0.00% (39) -0.06% (9) -0.01% 0 0.00% 0 0.00%
Other Non-Op. Income/(Expense) -- --- -- --- -- --- 0 0.00% -- ---
--- ---- --- ---- --- ---- - ----- --- ----
Net Non-Operating Income (75) -0.12% (154) -0.23% 17 0.03% 4 0.01% (272) 0.34%
Net Income Before Tax $627 0.97% $747 1.14% $1,174 1.79% $1,053 1.56% $465 0.58%
Income Taxes (284) -0.44% (289) -0.44% (424) -0.65% (352) -0.52% (301) -0.37%
Change in Acctg. Principle -- --- -- --- -- --- 0 0.00% -- ---
--- ---- --- ---- --- ---- - ------ --- ----
Net Income (Loss) $344 0.53% $458 0.70% $750 1.14% $701 1.04% $164 0.20%
Core Earnings
- -------------
Net Income Before Taxes $344 0.53% $747 1.14% $1,174 1.79% $1,053 1.56% $465 0.56%
Addback: Non-Operating Losses 75 1.12% 154 0.23% 9 0.01% 0 0.00% 272 0.34%
Deduct: Non-Operating Gains 0 0.00% 0 0.00% (26) -0.04% 0 0.00% 0 0.00%
Tax Effect (29) -0.04% (361) -0.55% (463) -0.71% (421) -0.63% (295) -0.36%
--- ----- ---- ----- ---- ------ ---- ------ ---- -----
Core Net Income $390 0.60% $541 0.82% $694 1.06% $632 0.94% $442 0.55%
<CAPTION>
For the 12 Months
Ended 03/31/96
-------------------
Amount Pct
______ ___
($000) (%)
<S> <C> <C>
Interest Income $6,822 7.92%
Interest Expense (4,133) -4.80%
------ ------
Net Interest Income $2,689 3.12%
Provision for Loan Losses (216) -0.25%
----- ------
Net Interest Income after Provisions $2,473 2.87%
Other Income 405 0.47%
Operating Expense (2,285) -2.65%
------ ------
Net Operating Income $593 0.69%
Non-Operating Income
- --------------------
Net gain(loss) on sale of IEA $230 0.27%
Net gain(loss) on REO 0 0.00%
Other Non-Op. Income/(Expense) -- ---
--- ----
Net Non-Operating Income 230 0.27%
Net Income Before Tax $823 0.95%
Income Taxes (297) -0.34%
Change in Acctg. Principle -- ---
--- ----
Net Income (Loss) $526 0.61%
Core Earnings
- -------------
Net Income Before Taxes $823 0.95%
Addback: Non-Operating Losses 0 0.00%
Deduct: Non-Operating Gains (230) -0.27%
Tax Effect (237) -0.28%
------ ------
Core Net Income $357 0.41%
</TABLE>
____________________________
(1) Ratios are as a percent of average assets.
(2) Assumes tax rate of 40.0 percent.
Source: Audited financial reports. RP Financial calculations.
<PAGE>
RP Financial, LC.
Page 1.9
Community Bank operates with a relatively high level of operating expenses,
which represented 2.65 percent of average assets for the twelve months ended
March 31, 1996. The Bank's high operating expenses are a result of several
factors. First, the high loan origination volume and increase in secondary
market activity in recent years has increased the staffing needs of the Bank.
Second, the Bank recently opened the Kearney branch and the additional expenses
associated with this office have not yet been fully leveraged by the Bank.
The Bank's operating expenses are expected to increase following the
conversion as a result of the following items. First, two stock plans, a
leveraged Employee Stock Ownership Plan ("ESOP") and a Recognition and Retention
Plan ("RRP"), are expected to purchase stock in the Holding Company (the ESOP is
expected to purchase 8.0 percent at the time of conversion and the RRP is
expected to purchase 4.0 percent of the stock in the year following conversion).
The amortization expenses associated with both plans will be included in future
operating expenses. Second, as a publicly-traded institution, the Bank will
incur additional legal, accounting, printing/mailing and related costs.
Loan loss provisions have steadily increased during the past five and three
quarter fiscal years. For the trailing twelve months ended March 31, 1996, the
Bank recorded a provision for loan losses of $0.216 million, or 0.25 percent of
average assets, up from a level of $0.171 million, or 0.21 percent of average
assets, in fiscal 1995. The increase in loan loss provisions during the trailing
twelve month period was attributable to management's assessment of trends in the
loan portfolio, market conditions, and other factors. At March 31, 1996, the
general valuation allowance ("GVA") balance was equal to $347,000, or 0.45
percent of loans receivable and 105.8 percent of NPAs, as compared to $226,000,
or 0.29 percent of loans and 139.51 percent of NPAs at fiscal year end 1995 (see
Exhibit I-6). Future loan loss provisions will continue to be established in
accordance with the Bank's asset classification and loss reserve policies.
Over the past five and three quarter fiscal years, non-operating gains and
losses have had a varying impact on the Bank's operations. Such income totaled
$0.230 million, or 0.27 percent of average assets, for the trailing twelve
months ended March 31, 1996, and consisted of gains on the sales of loans, MBS
and investment securities. During fiscal 1995, the Bank wrote down its
investment in a mutual fund for a loss of $0.314, or 0.34 percent of average
assets, which was partially offset by a gain on the sale of loans. Other gains
and losses recorded by the Bank have consisted of sales of IEA. Going forward,
the Bank anticipates that it will record non-operating income from time to time
as IEA classified as available for sale are sold, although such income is not
anticipated to have a major impact on earnings.
<PAGE>
RP Financial, LC.
Page 1.10
Interest Rate Risk Management
- -----------------------------
The Bank manages interest rate risk through the following balance sheet
strategies: retaining the majority of ARM originations for portfolio, selling
the majority of fixed-rate mortgages in the secondary market, maintaining
relatively high proportions of shorter-term construction and consumer loans,
attempting to lengthen the maturity of deposits during periods of low interest
rates, maintaining a strong capital ratio, and keeping non-earning assets low.
The Bank monitors its interest rate risk exposure through the use of a net
portfolio value ("NPV") analysis calculated by the OTS (see Exhibit I-7),
through the use of an in-house Sendero model, and through an internally
generated gap-to-assets analysis. The NPV analysis as of March 31, 1996 shows
that in the event of an immediate and sustained increase of 200 basis points in
interest rates, the NPV is calculated to decline by 9 percent, and in the event
of an immediate decline of 200 basis points in interest rates, the NPV is
calculated to decrease by 4 percent. The internal gap analysis prepared by the
Bank as of March 31, 1996 indicated that in the one year repricing bucket, the
Bank had a positive gap to assets ratio of 10.4 percent. Overall, both the NPV
and the gap analysis indicate that the Bank has been effective in limiting
exposure to changes in interest rates.
Lending Activities and Strategy
- -------------------------------
The Bank's historical lending activities emphasize the origination of 1-4
family mortgage loans (see Exhibits I-9 and I-10, loan composition and lending
activity, respectively). However, in recent years the Bank has also concentrated
on loan portfolio diversification by stepping up originations of construction
loans and consumer loans. To a lesser extent, Community Bank originates
mortgages secured by income property, and originates land loans. The loan
portfolio diversification at the Bank has been achieved primarily through the
use of speculative construction loans and automobile loans, both of which types
of loans increase the Bank's exposure to credit risk. In recognition of this,
management believes it has taken adequate steps to reduce the underlying credit
risk associated with such lending as detailed herein.
As of March 31, 1996, residential mortgage loans secured by 1-4 family
properties totaled $52.5 million, or 61.0 percent of total loans receivable. The
Bank originates both ARMs and fixed-rate residential mortgages. Fixed-rate
mortgages are offered with maturities ranging from 15 to 30 years, with the
majority of these loans sold in the secondary market as part of the Bank's
asset-liability management strategy. The Bank retains the servicing on a portion
of the loans sold.
<PAGE>
RP Financial, LC.
Page 1.11
Approximately 87 percent of the Bank's residential mortgages consisted of
ARMs at March 31, 1996. Community Bank offers ARMs with one-year adjustment
periods that are indexed to the one year constant maturity Treasury index with
an adjustment margin of 2.75 percentage points for owner-occupied property to
3.00 percentage points for investor property. The majority of ARMs are
originated with annual and lifetime adjustment caps of 2.0 and 6.0 percentage
points, respectively, although in the past the Bank originated ARMs with annual
and lifetime adjustments caps of 1.0 and 5.0 percentage points, respectively.
Generally, ARMs are retained for portfolio as part of the Bank's asset/liability
management strategy.
Residential loans made by the Bank are originated with maximum loan-to-
value ("LTV") ratios of 95 percent; loans with LTV ratios in excess of 80
percent require private mortgage insurance ("PMI"). The Bank will also originate
residential mortgages that are not strictly conforming to secondary market
standards, which may restrict their sale in the secondary market but also gives
the Bank additional competitive flexibility in originating mortgages.
Essentially all of the residential mortgages originated by the Bank are secured
by property in the local market area.
The primary area of loan portfolio diversification at the Bank is
construction lending, and such loans totaled $17.9 million, or 20.8 percent of
total loans at March 31, 1996, up from a level of $7.9 million, or 13.6 percent
of total loans at June 30, 1994. In recent years, the Bank has enhanced its
construction lending activity in response to the construction boom in areas
north of Kansas City, particularly southern Clay County. The large majority (69
percent) of the Bank's construction loans are speculative loans originated
directly to builders for the construction of unsold homes. The Bank believes it
has limited the risks associated with such lending by establishing lending
relationships with a select number of local builders and limiting the amount
outstanding to any single builder at one time. To a lesser extent, the Bank
originates construction loans directly to the owner of the property. Both types
of construction loans are generally structured as fixed rate loans with twelve
month terms. Substantially all of the Bank's construction loans are secured by
properties located in Clay County, although the Bank attempts to diversify its
construction portfolio among different subdivisions.
The Bank also originates land loans for the purchase of undeveloped land on
which the purchaser can later build a home. Land loans totaled $3.6 million, or
4.2 percent of total loans, at March 31, 1996. Terms on land loans are typically
five to ten years, and such loans are originated pursuant to the same
underwriting criteria as construction loans.
The Bank also originates mortgages secured by income property, although
such lending has never been a major component of the Bank's lending strategy and
such loans totaled only $1.3 million, or 1.6 percent of total loans receivable,
at March 31, 1996. Income property loans are generally made on a case by case
basis to local customers, and are generally secured by duplexes and small office
buildings in the Bank's market area.
<PAGE>
RP Financial, LC.
Page 1.12
Income property loans are generally originated as ARMs and carry rates indexed
to the comparable maturity Treasury plus a margin. LTVs on income property loans
typically do not exceed 80 percent.
To complement the Bank's 1-4 family permanent mortgage lending activities,
the Bank offers second mortgage/home equity loans, which typically carry maximum
maturities of 15 years and fixed-rates. In most cases, the Bank has the first
mortgage as well. The Bank has also recently implemented an FHA Title I lending
program. These loans are to be originated to Clay County residents for home
improvement and other purposes, and the majority of these loans will be sold in
the secondary market. FHA Title I loans generally have fixed rates and terms up
to 10 years.
The Bank's second most prominent area of loan portfolio diversification is
consumer lending, which totaled $10.8 million, or 12.4 percent of assets at
March 31, 1996. The Bank offers a variety of types of consumer loans, including
automobile loans, loans secured by deposit accounts, home improvement loans, and
other secured and unsecured loans.
The most prominent type of consumer loan in the portfolio is automobile
loans, which totaled $8.8 million, or 10.2 percent of total loans receivable and
82.0 percent of consumer loans, at March 31, 1996. The Bank originates both
direct and indirect automobile loans. Direct automobile loans, which accounted
for nearly 75 percent of total automobile loans, are made by the Bank directly
to the owner of the car. Applications for indirect automobile loans are limited
to one of several local automobile dealers and are underwritten pursuant to the
Bank's standards. Automobile loans have terms of up to 5 years and are fixed
rate. The Bank will lend up to 80 percent of the dealer cost on new cars and up
to 80 percent of the published NADA value on used cars. All automobile loans are
originated to local residents.
As shown in Exhibit I-10, the Bank's overall loan origination volume has
increased during each of the twelve month periods shown, from $45.4 million in
1994 to $62.5 million for the twelve months ended March 31, 1996. The majority
of the Bank's origination activity has occurred in fixed-rate instruments over
the past several years, although the majority of the long-term fixed-rate
residential mortgages have been sold in the secondary market pursuant to the
asset/liability management strategy of the Bank. The table also highlights the
Bank's increased emphasis on construction lending, with originations increasing
from $9.5 million in fiscal 1994 to $23.0 million for the twelve month period
ending March 31, 1996.
<PAGE>
RP Financial, LC.
Page 1.13
Asset Quality
- -------------
As shown in Exhibit I-12, the Bank has operated with strong asset quality
over the past several years due to an emphasis on conservative lending policies
and underwriting guidelines. As of March 31, 1996, NPAs totaled $328,000, or
0.38 percent of assets, and consisted of $95,000 of non-accruing loans, $222,000
in accruing loans 90 days or more delinquent, and $11,000 in repossessed
automobiles. The Bank has experienced a moderate increase in NPAs from $162,000,
or 0.17 percent of assets at fiscal year end 1995 to $0.328 million, or 0.38
percent of assets, at March 31, 1996, due to an increase in delinquent accruing
residential mortgage loans. Management does not believe that the increase in
NPAs represents any extraordinary exposure to credit losses, and believes the
delinquent loans pose limited risk of loss given historical trends and the
conservative underwriting standards at the Bank. At March 31, 1996, the GVA
balance totaled $347,000, or 105.79 percent of NPAs and 0.45 percent of loans.
Management established additional loan loss provisions during the nine months
ended March 31, 1996 due to the increase in loans receivable. Management
believes the reserve coverage ratio is currently adequate, and will continue to
establish loan loss provisions in accordance with asset classification and
reserve policies.
Funding Composition and Strategy
- --------------------------------
Deposits have consistently been the Bank's primary source of funds over the
past several years and totaled $67.9 million, or 78.8 percent of assets at March
31, 1996. The Bank's deposit products include certificates of deposit ("CDs") as
well as passbook, NOW accounts, money market accounts, and non-interest bearing
accounts (see Exhibit I-13). As with most savings institutions, CDs have been
the Bank's primary source of deposits (see Exhibit I-14), and as of March 31,
1996, the CD portfolio totaled $49.0 million, or 72.2 percent of deposits. The
majority of the Bank's CDs are short-term, and approximately 81 percent were
scheduled to mature in one year or less at March 31, 1996. Jumbo CDs, which tend
to be more rate sensitive than other types of CDs, totaled $3.0 million, or 6.1
percent of total CDs, at March 31, 1996. The Bank does not offer premium rates
on jumbo CDs and does not utilize brokered CDs. Except for periodic special
promotions, the Bank typically offers CD rates that are comparable with CD rates
offered by the local competition.
Lower costing transaction and savings accounts comprised the balance of the
Bank's deposits, totaling $18.9 million, or 27.8 percent, of total deposits at
March 31, 1996. NOW accounts comprised the majority of these non-CD deposits,
totaling $7.9 million, followed by MMDAs ($5.8 million), passbook accounts ($3.7
million) and non-interest checking accounts ($1.5 million). Consistent with the
general increase in short-
<PAGE>
RP Financial, LC.
Page 1.14
term interest rates during fiscal 1995, the Bank has experienced a moderate
internal deposit shift into higher rate CDs, which has increased the Bank's cost
of funds.
Borrowings have been utilized by the Bank in recent years as a supplemental
funding source to meet the growing demand for construction loans. Specifically,
during fiscal 1995, the Bank borrowed $16.0 million in short- to intermediate-
term advances from the FHLB of Des Moines. During the nine months ended March
31, 1996, the Bank sold IEA and used the proceeds to repay $7.0 million of the
higher costing advances. At March 31, 1996, the outstanding balance totaled $9.0
million and had a weighted average interest rate of 5.91 percent, down from 6.91
percent at June 30, 1995. The Bank intends to continue to supplement deposits
with borrowings from time to time as market conditions warrant. On a pro forma
basis, the Bank will also have borrowings in the form of the ESOP loan from the
Holding Company.
Subsidiary
- ----------
The Bank has one wholly-owned subsidiary, CBES Service Corporation
("CBES"). CBES was established in 1983 for the purpose of offering credit life,
health and accident insurance to its customers. At March 31, 1996, the Bank's
investment in CBES totaled $1,000. Income from CBES was nominal in fiscal 1995
and fiscal year 1996 to date.
Legal Proceedings
- -----------------
The Bank is currently not involved in any legal proceedings other than
routine legal proceedings that occur in the ordinary course of business, which,
in aggregate, involve amounts that are believed to be immaterial to the
financial condition of the Bank.
<PAGE>
RP Financial, LC.
Page 2.1
II. MARKET AREA
Introduction
- ------------
Community Bank conducts operations out of its headquarters office in
Excelsior Springs, Missouri, which is located approximately 25 miles northeast
of Kansas City. The Bank also maintains an office in Kearney. Both Excelsior
Springs and Kearney are located in Clay County. which is included as part of the
Kansas City, Missouri Metropolitan Statistical Area ("MSA"). Exhibit II-1
provides a description of the Bank's offices. Excelsior Springs and Kearney are
small towns with 1990 populations estimated at 11,000 and 2,000, respectively.
As one of the counties in the MSA, Clay County has a relatively large population
(estimated at 166,000 as of 1995), which ranked seventh in the state of
Missouri. The northern portion of Clay County contains a combination of suburban
and rural areas with a number of small towns. Southern Clay County is more
suburban in nature, and contains a number of bedroom communities for commuters
who are employed in areas closer to Kansas City, particularly at the larger
manufacturing employers. Management considers the Bank's primary market area to
be Clay County, supplemented by loans and deposits generated from customers
living primarily in Ray County, and to a lesser extent customers living in the
adjacent counties of Clinton and Lafayette.
The Bank has served the market area since its inception in 1931. The
economy in Clay County was founded on agriculture, although today most of the
employment is provided by light manufacturing, services, and retail trade.
Competition in the market area is intense, with 17 commercial banks and 7 other
thrift institutions operating in Clay County. Some of these commercial banks are
subsidiaries of much larger regional holding companies (Commerce Bank and
Boatmen's First National Bank, and United Missouri Bank), and thus have vastly
greater resources at their disposal than Community Bank. The other banks and
thrifts are smaller and much more localized in nature, and compete with the Bank
on largely on the basis of their community orientation and customer loyalty. The
Bank has also experienced a strong mortgage lending competition from a number of
different mortgage-banking companies operating in the market area.
The following sections analyze the market area's historical and forecasted
demographic growth trends, the market area economy, and the competitive
environment to help determine the growth potential that exists for the Bank. The
ability of the market area to provide growth opportunities is an important
consideration that is reflected in our determination of the pro forma market
value determined herein.
<PAGE>
RP Financial, LC.
Page 2.2
National Economic Factors
- -------------------------
The national economy experienced moderate growth during 1995 with overall
GDP measured at 2.0 percent, down from the 1994 level of 3.5 percent. During the
first half of 1995, economic growth declined rapidly due to rises in the jobless
rate, a decline in retail sales, and lower construction spending. GDP growth
during the second quarter of 1995 slowed to 1.3 percent annually, which was the
slowest growth in almost four years. In a move to revive the sagging economy,
the Federal Reserve cut short-term interest rates by 0.25 percent in early July
1995. Amid mixed economic data, such as a drop in July durable goods orders and
an increase in July new housing starts, the Fed held rates steady during its
meeting in late August. Despite initial indications of lackluster third quarter
GDP growth to match low second quarter growth, the economy picked up late in the
quarter and third quarter GDP growth increased to approximately 4.2 percent
annually. However, the fourth quarter was beset by low consumer confidence,
which made for weak holiday sales, and GDP growth declined to 0.9 percent in the
fourth quarter. In efforts to revive the flagging economy, the Fed cut short-
term interest rates in late December 1995. Record-breaking winter weather
conditions further slowed the economy in January of 1996, triggering another
rate cut by the Fed on January 31. However, unemployment declined sharply in
February, although the January figures were skewed by the weather and by
striking GM workers. The two recent cuts in interest rates also triggered an
increase in sales of new homes in February. Although most sectors of the country
recorded sluggish economic growth in the Federal Reserve's most recent Beige
Book report on March 14, the Fed did not reduce interest rates in their meeting
on the 26th of March, as Fed Chairman Greenspan remained generally upbeat about
economic conditions. March 1996 saw an increase in retail sales and a slight
increase in the CPI, although inflation remains very low in relation to
historical standards. Unemployment declined in March as well. First quarter GDP
growth was measured at 2.3 percent which was higher than the 1.5 to 1.8 percent
forecasted by most economists. This higher than expected GDP growth was
attributable to an increase in consumer spending, which increased by 3.5 percent
in the first quarter. During the second quarter of 1996, the home sales trended
sharply upward, and the latest jobs report for May indicated a much higher than
anticipated increase in the number of jobs. In light of these trends, many
economists are predicting GDP growth of 3.5 to 4.0 percent, although economic
activity is widely expected to slow in the second half of the year as higher
interest rates take effect.
Signs of a weakening economy in the first half of 1995 led to a decline in
both short-term and long-term interest rates. The Fed increased short-term
interest rates in February and July 1995, but a rally in the bond market pushed
long term rates lower in late August and early September. Rates remained
relatively flat throughout October and November given the uncertainty regarding
the federal debt. In late December 1995 and late January 1996, the Fed cut
interest rates again by 25 basis points in efforts to stimulate sluggish
<PAGE>
RP Financial, LC.
Page 2.3
economic growth. Since January 1996, generally improving economic conditions
along with continued low inflation forestalled additional cuts in short term
rates by the Fed in its Federal Open Market Committees on March 26 and May 22.
Current Indications by the Fed are that additional rate cuts will be contingent
upon inflation and the strength of economic growth during the remainder of the
year. Exhibit II-2 displays historical interest rates for the past several
years.
Market Area Demographics
- ------------------------
Demographic growth in the market area has been measured by examining trends
in population, households and income, summarized by the data presented in Table
2.1. Clay County had a population estimated at 166,000 as of 1995, and
experienced population growth at a rate of 1.5 percent between 1990 and 1995,
which was higher than Missouri averages. This higher than average growth rate is
projected to continue over the next five years, supported by the underlying
strength of the Kansas City area economy. Household growth trends have largely
mirrored population growth trends. Median household and per capita income levels
in Clay County are higher than state averages, as the general strength of the
economy has minimized unemployment and a substantial portion of the jobs in the
County are provided by higher wage professional and/or technical services and
skilled manufacturing (see Exhibit II-3). Other favorable income statistics for
Clay County include a higher distribution of income levels in the upper levels
relative to state and national averages.
<PAGE>
Table 2.1
Community Bank of Excelsior Springs
Summary Demographic Data
<TABLE>
<CAPTION>
Year Growth Rate Growth Rate
-----------------------------------------
Population (000) 1990 1995 2000 1990-95 1995-2000
- ---------------- ---- ---- ---- ------- ---------
(%) (%)
<S> <C> <C> <C> <C> <C> <C>
UNITED STATES 248,710 263,006 277,084 1.1% 1.0%
MISSOURI 5,117 5,316 5,536 0.7% 0.8%
CLAY 153 168 177 1.5% 1.4%
Households (000)
- ----------------
UNITED STATES 91,947 97,070 102,202 1.1% 1.0%
MISSOURI 1,961 2,039 2,123 0.7% 0.8%
CLAY 59 64 68 1.5% 1.4%
Median Household Income ($)
- ---------------------------
UNITED STATES $29,199 $33,610 $32,972 2.9% -0.4%
MISSOURI 26,417 28,782 27,847 1.7% -0.7%
CLAY 34,062 36,005 34,619 1.1% -0.8%
Per Capita Income - 1995 ($)
- ------------------------------
UNITED STATES $13,179 $16,405 ---- 4.5% ----
MISSOURI 12,987 14,388 ---- 2.1% ----
CLAY 14,464 16,287 ---- 2.4% ----
1995 Age Distribution(%) 0-14 Years 15-24 Years 25-44 Years 45-64 Years 65+ Years Median Age
- ------------------------ ---------- ----------- ----------- ----------- --------- ----------
UNITED STATES 22.1 13.8 31.8 19.5 12.8 34.0
MISSOURI 22.1 13.6 30.4 19.9 14.0 33.5
CLAY 22.3 13.4 33.2 20.3 10.7 32.8
Less Than $15,000 to $25,000 to $50,000 to $100,000 to
1995 HH Income Dist.(%) $15,000 24,999 $49,999 $99,999 $149,999 $150,000+
- ----------------------- ------- ------ ------- ------- -------- ---------
UNITED STATES 20.5 15.8 33.8 23.7 4.2 2.0
MISSOURI 24.1 18.3 34.8 19.2 2.4 1.2
CLAY 14.2 16.3 40.2 25.9 2.3 1.0
Residential Housing Permits Issued 1991 1992 1993 1994
- ---------------------------------- ---- ---- ---- ----
UNITED STATES 948,794 1,094,933 119,063 1,371,637
MISSOURI 16,119 20,078 21,702 26,374
CLAY 503 656 681 837
</TABLE>
Source: CACI.
<PAGE>
RP Financial, LC.
Page 2.5
Economy
- -------
The Clay County economy has its roots in the agriculture industry, although
agriculture has gradually declined as a source of county revenues over the
decades. Most of the employment in Clay County today is found within the service
industries, light manufacturing, and retail trade. Service employment in Clay
County is led by the health care industry. Included among the largest service
employers in Clay County are a number of hospitals (Liberty Hospital, North
Kansas City Hospital, St. Lukes Northland Hospital, and Excelsior Springs
Memorial Medical Center) several school districts, and two community colleges.
Some of the largest manufacturing employers in Clay County include Ford Motor
Company, Farmland Industries and Wilcox Electric. Most of the largest local
employers in the Excelsior Springs area are manufacturing companies, as shown in
Table 2.2.
Table 2.2
Community Bank of Excelsior Springs
Major Employers in Excelsior Springs
<TABLE>
<CAPTION>
Employer Industry Employee
-------- -------- --------
<S> <C> <C>
American Italian Pasta Food Processing 250
Precision Technology Plastics 175
Douglas & Lomason Automobile Parts 172
Gilmour Manufacturing Plastics 150
</TABLE>
Source: Excelsior Springs Chamber of Commerce.
The economy in Clay County and Excelsior Springs has been generally stable,
and is tied to the economic trends in the greater Kansas City area. The
unemployment rate in Clay County is currently slightly lower than state averages
(see Table 2.3), and was lower than the level recorded in the same period one
year ago.
<PAGE>
RP Financial, LC.
Page 2.6
Table 2.3
Community Bank of Excelsior Springs
Selected Unemployment Rates (1)
<TABLE>
<CAPTION>
April 1995 April 1996
Region Unemployment Unemployment
------ ------------ ------------
<S> <C> <C>
United States 5.6% 5.4%
Missouri 4.8% 4.1%
Clay County 3.2% 2.6%
</TABLE>
(1) Unemployment rates are not seasonally adjusted.
Source: Bureau of Labor Statistics.
Market Area Deposit Characteristics
- -----------------------------------
Table 2.4 displays deposit market trends in Clay County and Missouri over
the past several years. Between 1993 and 1995, financial institutions in
Missouri and Clay County experienced low deposit growth. The broader market
deposit trends indicate that thrifts in Missouri lost deposit market share to
commercial banks between 1993 and 1995. However, Clay County thrifts were more
successful than their commercial bank competitors in generating deposits between
1993 and 1995.
Going forward, thrifts will be at a competitive disadvantage relative to
commercial banks as long as the disparity in deposit premiums paid by thrifts
relative to commercial banks continues. Although legislation to eliminate this
disparity has been proposed, the latest budget agreement did not include such a
provision and the ultimate timing of the resolution in the premium disparities
is unclear. The result of this premium disparity will be reflected in higher
deposit rates offered by commercial banks, which thrifts will find increasingly
costly to match. Thus, the thrift industry is likely lose deposit market share
to commercial banks until the gap in deposit premiums is eliminated.
Competition
- -----------
Competition among financial institutions in the Bank's market area is
intense. Clay County contains 17 commercial banks with 39 branches and 7 other
savings institutions with 14 branches. A significant proportion of the deposits
in Clay County are held by commercial banks who are owned by large regional
holding companies and offer a much wider variety of services than the Bank.
There are also a number of smaller
<PAGE>
Table 2.4
Community Bank of Excelsior Springs
Deposit Summary
<TABLE>
<CAPTION>
As of June 30,
----------------------------------------------------------------------------
1993 1995 Deposit
------------------------------------ -----------------------------------
Market Number of Market No. of Growth Rate
Deposits Share Branches Deposits Share Branches 1993-1995
-------- ----- -------- -------- ----- -------- ---------
(Dollars In Thousands) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
A. Deposit Summary
- ------------------
State of Missouri $69,768,100 100.0% 2,072 $ 70,971,357 100.0% 2,053 0.9%
Commercial Banks 53,544,216 76.7% 1,511 56,939,503 80.2% 1,556 3.1%
Credit Unions 4,054,407 5.8% 233 4,083,855 5.8% 233 0.4%
Savings and Loans 12,169,477 17.4% 328 9,947,999 14.0% 264 -9.6%
Clay County $1,807,633 100.0% 68 $ 1,849,352 100.0% 71 1.1%
Commercial Banks 1,221,395 67.6% 36 1,226,409 66.3% 39 0.2%
Credit Unions 105,066 5.8% 19 116,453 6.3% 19 5.3%
Savings and Loans 481,172 26.6% 13 506,490 27.4% 13 2.6%
Community Bank (1) 59,146 12.3% 1 68,864 13.6% 2 7.9%
Community Bank (2) 3.3% 3.7%
</TABLE>
(1) Percent of county S&L deposits.
(2) Percent of total county deposits.
Source: FDIC; OTS.
<PAGE>
RP Financial, LC.
Page 2.8
commercial banks and thrifts who are locally owned and operate pursuant to a
community banking strategy that is similar to Community Bank's.
Despite the strong competition in the market area, the Bank was successful
in increasing its deposit base between June 30, 1993 and June 30, 1995. The
success was generally attributable to an increase in deposit rates offered by
the Bank. Going forward, the pressures of the marketplace are likely to
intensify as the favorable demographic characteristics in Clay County continue
to attract the attention of larger, more regionally oriented commercial banks
and thrifts. For example, one of the Bank's thrift competitors recently
announced that it was selling control to a much larger savings and loan holding
company with a state-wide presence. Moreover, the continued disparity in deposit
premiums will put commercial banks at a competitive advantage relative to
thrifts in Clay County. While the proceeds from the stock conversion are
expected to enhance the Bank's ability to attract funds by providing a capital
cushion that allows greater flexibility in terms of products and rates offered,
the Bank's prospects for future growth are likely to remain limited by the
relatively large number of institutions operating in the market area.
<PAGE>
RP Financial, LC.
Page 3.1
III. PEER GROUP ANALYSIS
This chapter presents an analysis of Community Bank's operations versus a
group of comparable public companies (the "Peer Group") selected from the
universe of all publicly-traded savings institutions. The primary basis of the
pro forma market valuation of the Bank is provided by these public companies.
Factors affecting the Bank's pro forma market value such as financial condition,
credit risk, interest rate risk, and recent operating results can be readily
assessed in relation to the Peer Group. Current market pricing of the Peer
Group, subject to appropriate adjustments to account for differences between the
Community Bank and the Peer Group, will then be used as a basis for the
valuation of the Bank's to-be-issued common stock.
Selection of Peer Group
- -----------------------
We consider the appropriate Peer Group to be comprised of only those
publicly-traded savings institutions whose common stock is either listed on a
national exchange or is NASDAQ listed, since the market for companies trading in
this fashion is regular and reported. We believe non-listed institutions are
inappropriate since the trading activity for thinly-traded stocks is typically
highly irregular in terms of frequency and price and may not be a reliable
indicator of market value. We have excluded from the Peer Group all publicly-
traded subsidiary institutions of mutual holding companies, because their
pricing ratios are distorted by the minority issuance of their shares. We have
also excluded from the Peer Group those companies under acquisition and/or
companies whose market prices appear to be distorted by speculative factors or
unusual operating conditions. The universe of all publicly-traded institutions
is included as Exhibit III-1. Pricing characteristics of all thrift institutions
are included as Exhibit IV-2 (institutions excluded from the calculation of
averages are denoted with a footnote (8)).
Under ideal circumstances, the Peer Group would be comprised of a minimum
of ten small publicly-traded Missouri thrifts with capital, earnings, asset
sizes, balance sheet composition, risk profiles, operating strategies and market
areas comparable to the Bank. Since 10 such institutions do not exist, it was
necessary to expand the search beyond state boundaries and with search criteria
for smaller, well-capitalized thrift institutions located in the contiguous
states of Iowa and Kansas. Thus, in the selection process we applied two primary
"screens" to the universe of all public companies as follows:
o Screen #1. Missouri institutions with assets of approximately $250
-------------------------------------------------------------------
million or less, well-capitalized (equity-to-asset ratios greater than
----------------------------------------------------------------------
10.0 percent) and moderate to strong earnings (over 50 basis points).
---------------------------------------------------------------------
Thirteen companies met the criteria for Screen #1 and seven were
included in the Peer Group (see Exhibit III-2): Companies excluded
from the Peer Group included: two subsidiaries of mutual holding
companies (PULB - Pulaski SB and GFED - Guaranty FS&LA); three new
conversions (JOAC - Joachim Bancorp, HRDN - Hardin Bancorp, and LXMO -
Lexington B&L Fin. Corp.); MBLA Financial Corp. was excluded due
<PAGE>
RP Financial, LC.
Page 3.2
to a recent runup in its stock price and resulting substantially
higher than average pricing multiples.
o Screen #2. Companies located in Iowa and Kansas, assets of $150
----------------------------------------------------------------
million or less, well-capitalized (equity-to-asset ratios greater than
----------------------------------------------------------------------
12.0 percent) and moderate to strong earnings (in excess of 50 basis
--------------------------------------------------------------------
points). After all qualifying Missouri institutions were considered,
--------
we expanded our selection process to consider other institutions in
the contiguous states of Kansas and Iowa with under $150 million in
assets, equity to assets ratios of at least 12 percent and strong
earnings. A total of 4 institutions met the foregoing screening
criteria as indicated by the underlined institutions in Exhibit III-3.
Three of these companies, SFFC - StateFed Financial and FFSL - First
Independence Corp. and GFSB - GFSB Bancorp were included in the Peer
Group. The excluded company, WCFB - Webster City FSB of IA, is a
subsidiary of a mutual holding company.
Table 3.1 lists key characteristics of the Peer Group companies. In
general, the Peer Group is comprised of small institutions operating with strong
capital ratios, several of whom are facing the same leverage challenge that will
be faced by the Bank as a newly-converted company. While the Peer Group is not
exactly comparable to the Bank, we believe that it provides a reasonable
representation of publicly-traded thrifts with operations comparable to those of
the Bank and thus forms a sound basis for valuation. A summary description of
the key characteristics of each of the Peer Group companies selected is detailed
below.
o SHO-ME FINANCIAL CORP. OF MOUNT VERNON, MISSOURI. Sho-Me, the largest
member of the Peer Group with $264 million in assets, operates six offices
in southern Missouri. Like the Bank, Sho-Me operates in a partly rural
market area outside a large metropolitan area (Mount Vernon is located 35
miles west of Springfield). Like the Bank, the majority of Sho-Me
Financial's IEA consist of loans receivable, but Sho-Me derives a large
proportion of funding from borrowings (26.5 percent of assets, the highest
in the Peer Group). Sho-Me exhibited similar lending diversity as the
Bank, although with more of an emphasis on non-residential lending.
o CAPITAL SAVINGS BANCORP OF JEFFERSON CITY, MISSOURI. Capital Savings is a
$203 million company operating seven offices in and around Jefferson City.
Capital Savings follows a traditional thrift operating strategy of
primarily 1-4 family residential lending. The Bank will have a
substantially higher capital ratio but lower earnings than Capital Savings
on a pro forma basis.
o CAMERON FINANCIAL CORP. OF CAMERON, MISSOURI. Cameron is a $172 million
institution operating three offices in the same general northeast Missouri
area as the Bank. Cameron is one of the three Peer Group members who
converted during the first half of 1995, and operates with a high capital
level (26.5 percent, the highest in the Peer Group), similar to the Bank on
a pro forma basis. Cameron is similarly diversified into construction
lending, which make its earnings and risk profiles similar to Community
Bank's, although Cameron is substantially more profitable than the Bank due
to lower operating expenses.
o SOUTHERN MISSOURI BANCORP OF POPLAR BLUFF, MISSOURI. Southern Missouri is
a $162 million thrift operating eight branches in a rural market in the
southern part of the state. Operating in a lower growth market than the
Bank, Southern Missouri maintains a high proportion of assets in cash and
investments and MBS. Southern Missouri is a less diversified lender than
Community Bank, but recorded higher earnings.
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Table 3.1
Peer Group of Publicly-Traded Thrifts
June 18, 1996(1)
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
------ ----------------------------------- ------ ----------------- --------- ------ ------- ---- ---- ----- -------
($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SMFC Sho-Me Fin. Corp. of MO OTC Southwest MO Thrift 264 6 12-31 06/94 15.75 29
CAPS Capital Savings Bancorp of MO OTC Central MO Thrift 203 7 06-30 12/93 18.00 19
CMRN Cameron Fin. Corp. of MO OTC Northwest MO Thrift 172 3 09-30 04/95 13.50 38
SMBC Southern Missouri Bncrp of MO OTC Southeast MO Thrift 162 8 06-30 04/94 14.75 25
FBSI First Bancshares of MO OTC Southcentral MO Thrift 140 5 06-30 12/93 15.50 20
FFSL First Independence Corp. of KS OTC Southeast KS Thrift 102 1 09-30 10/93 17.75 10
GFSB GFS Bancorp of Grinnell IA OTC Central IA Thrift 81 1 06-30 01/94 20.25 10
PCBC Perry Co. Fin. Corp. of MO OTC EastCentral MO Thrift 77 D 1 09-30 02/95 17.50 15
SFFC StateFed Financial Corp. of IA OTC Des Moines IA Thrift 74 2 06-30 01/94 16.00 13
NSLB NS&L Bancorp of Neosho MO OTC Southwest MO Thrift 59 2 09-30 06/95 12.87 11
</TABLE>
NOTES: (1) Or most recent date available (M=March, S=September, D=December,
J=June, E=Estimated, and P=Pro Forma)
(2) Operating strategies are: Thrift=Traditional Thrift,
M.B.=Mortgage Banker, R.E.=Real Estate Developer,
Div.=Diversified, and Ret.=Retail Banking.
(3) FDIC savings bank institution.
Source: Corporate offering circulars, data derived from information
published in SNL Securities Quarterly Thrift Report, and financial
reports of publicly-traded thrifts.
Date of Last Update: 06/18/96
<PAGE>
RP Financial, LC.
Page 3.4
o FIRST BANCSHARES OF MOUNTAIN GROVE, MISSOURI. First Bancshares has assets
of $140 million and operates five offices in a rural market in southern
Missouri, approximately 60 miles east of Springfield. First Bancshares'
profitability is impacted by its small average branch size, and it was the
least profitable member of the Peer Group (0.78 percent of average assets).
Lending at First Bancshares is dominated by 1-4 family residential
mortgages.
o FIRST INDEPENDENCE CORP. OF INDEPENDENCE, KANSAS. First Independence is
one of three non-Missouri companies in the Peer Group. First Independence
had $102 million in assets and operates out of a single office in
Independence, a small town in southeast Kansas approximately 60 miles from
the Missouri border. First Independence operates in a low growth market
area, and therefore maintains substantial portfolios of cash and
investments and MBS, which result in low operating expenses and higher
earnings than Community Bank. Lending at First Independence consists
primarily of residential mortgages.
o GFS BANCORP OF GRINNELL, IOWA. The second of three non-Missouri companies
in the Peer Group, GFS Bancorp is a $81 million asset company operating out
of a single office in central Iowa. GFS Bancorp diversifies its loan
portfolio by maintaining a relatively high proportion of non-residential
mortgage loans. GFS Bancorp funds operations to a greater than average
extent with borrowings, which has increased its cost of funds, but offsets
this disadvantage by maintaining lower than average operating expenses, and
is more profitable than the Bank.
o PERRY COUNTY FINANCIAL CORP. OF PERRYVILLE, MISSOURI. Perry County has $77
million in assets and operates out of a single office in rural southeastern
Missouri. Perry County is the second Peer Group member who converted in
the first half of 1995. With limited local loan growth opportunity, Perry
County operates with a high level of cash and investments and MBS (46.8
percent and 40.2 percent of assets, respectively). Low asset yields have
stifled Perry County's earnings, although low operating expenses have
partially offset the low net interest margin, and Perry County was more
profitable than the Bank.
o STATEFED FINANCIAL CORP. OF DES MOINES, IOWA. StateFed, the last non-
Missouri member of the Peer Group, has $74 million in asset and operates
out of two offices in Des Moines. Although it converted in January 1994,
StateFed still operates with a high capital ratio of approximately 20
percent. StateFed supplements deposits to a greater degree with borrowings
and maintains a relatively large portfolio of income producing property
loans.
o NS&L BANCORP OF NEOSHO, MISSOURI. NS&L Bancorp is the third Peer Group
member who converted during the first half of 1995. NS&L Bancorp is the
smallest member of the Peer Group with $59 million in assets and operates
in a primarily rural market outside of Springfield. NS&L Bancorp maintains
a high capital level due to the recent conversion. NS&L Bancorp maintains
a high proportion of assets in cash and investments, which limits credit
risk but suppresses asset yields. Lending at NS&L Bancorp is comprised
primarily of residential mortgages.
In aggregate, the Peer Group companies have an average capital ratio that
exceeds the industry average (17.1 percent of assets versus 13.2 percent for the
all SAIF average), and higher core profitability (1.02 percent versus 0.81
percent for all SAIF-insured publicly-traded thrifts). The Peer Group's higher
capital ratio relative to the industry average is due to the fact that many of
the Peer Group companies are relatively recent conversions who have not had
sufficient time to fully leverage the proceeds raised in their offerings,
resulting a lower core ROE of 6.17 percent versus 7.29 percent for the all SAIF
average. In terms of pricing, the Peer Group on average trades at a lower
price/book ("P/B") multiple and a higher price/earnings ("P/E") multiple
<PAGE>
RP Financial, LC.
Page 3.5
than the industry (see the following table). This pricing differential is
attributable to several factors. First, the below market price to book value of
the Peer Group signals that the market is not willing to pay a market multiple
for excess capital if the return on equity is low. The higher P/E multiple of
the Peer Group appears to reflect investor expectations of earnings growth
through leveraging and reinvestment of the conversion proceeds. Given the
expected similarity of the Bank's pro forma capitalization and earnings to the
Peer Group, we anticipate the stock will reflect pricing similarities as well
before adjustments discussed herein.
<TABLE>
<CAPTION>
As of June 14, 1996
--------------------------
Peer All SAIF
Group Insured
------ -------
<S> <C> <C>
Equity-to-Assets 17.14% 13.25%
Return on Assets ("ROA")-Core 1.02% 0.81%
Return on Equity ("ROE")-Core 6.17% 7.29%
Market Capitalization ($Mil) $19.18 $119.16
Price-to-Book Ratio ("P/B") 89.51% 104.98%
Price-to-Earnings Multiple ("P/E")-Core 16.00x 15.14x
Price-to-Assets Ratio ("P/A") 15.20% 13.13%
Source: Chapter IV tables.
</TABLE>
The following sections present a comparison of the Bank's financial
condition, income and expense trends, loan composition, interest rate risk and
credit risk versus the Peer Group. The conclusions drawn from the comparative
analysis are then factored into the valuation analysis discussed in the final
chapter.
Financial Condition
- -------------------
Table 3.2 shows comparative balance sheet measures for the Bank and the
Peer Group, reflecting the expected similarities and some differences given the
selection procedures outlined above. The Bank's and most of the Peer Group's
ratios reflect balances as of or for the twelve months ended March 31, 1996. The
Bank's pre-conversion net worth of 9.1 percent was well below the Peer Group's
average net worth ratio of 17.1 percent, although the Bank's capital level can
be expected to more closely approximate the Peer Group average on a pro forma
basis. The increase in the Bank's capital on a pro forma basis can also be
expected to reduce its ROE, which will likely be lower than the Peer Group
average until the Bank has had time to leverage the capital and increase its
earnings. All of the Bank's and the Peer Group's capital consisted of tangible
capital, and the Bank and all of the Peer Group companies were in compliance
with all fully phased-in regulatory capital requirements.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.2
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of March 31, 1996
<TABLE>
<CAPTION>
Balance Sheet as a Percent of Assets
----------------------------------------------------------------------------------------
Cash and Borrowed Subd. Net Goodwill Tng Net MEMO:
Investments Loans MBS Deposits Funds Debt Worth & Intang Worth Pref.Stock
----------- ------- ----- -------- -------- ------ -------- ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Community Bank of MO
- --------------------
March 31, 1996 5.6 89.7 0.6 78.8 10.4 0.0 9.1 0.0 9.1 0.0
SAIF-Insured Thrifts 19.6 64.2 13.0 73.5 11.9 0.1 12.9 0.2 12.7 0.1
State of MO 17.5 66.5 13.4 74.5 9.2 0.0 15.2 0.1 15.0 0.0
Comparable Group Average 19.3 67.1 11.2 70.3 11.5 0.0 17.1 0.0 17.1 0.0
Mid-West Companies 19.3 67.1 11.2 70.3 11.5 0.0 17.1 0.0 17.1 0.0
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CMRN Cameron Fin. Corp. of MO 14.3 83.0 0.0 70.3 1.9 0.0 26.5 0.0 26.5 0.0
CAPS Capital Savings Bancorp of MO 6.8 77.5 13.9 74.4 13.8 0.0 10.4 0.0 10.4 0.0
FBSI First Bancshares of MO 14.6 82.0 0.8 73.1 9.6 0.0 16.9 0.0 16.9 0.0
FFSL First Independence Corp. of KS 18.7 60.8 19.0 71.7 14.8 0.0 12.6 0.0 12.6 0.0
GFSB GFS Bancorp of Grinnell IA 10.9 83.3 4.4 63.1 23.9 0.0 12.0 0.0 12.0 0.0
NSLB NS&L Bancorp of Neosho MO 39.7 48.0 9.9 75.0 0.0 0.0 23.5 0.0 23.5 0.0
PCBC Perry Co. Fin. Corp. of MO(1) 46.8 11.6 40.2 78.3 0.0 0.0 20.9 0.0 20.9 0.0
SMFC Sho-Me Fin. Corp. of MO 7.1 85.7 4.3 60.6 26.5 0.0 12.0 0.0 12.0 0.0
SMBC Southern Missouri Bncrp of MO 22.0 56.5 19.2 75.2 7.1 0.0 16.4 0.0 16.4 0.0
SFFC StateFed Financial Corp. of IA 12.6 82.2 0.0 61.6 17.5 0.0 20.1 0.0 20.1 0.0
<CAPTION>
Balance Sheet Annual Growth Rates Regulatory Capital
------------------------------------------------------------ -------------------------
Cash and Loans Borrows. Net Tng Net
Assets Investments & MBS Deposits &Subdebt Worth Worth Tangible Core Reg.Cap.
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Community Bank of MO
- --------------------
March 31, 1996 -9.93 -39.25 -7.94 -0.70 -57.75 7.16 7.16 9.17 9.17 11.94
SAIF-Insured Thrifts 11.70 10.31 9.50 6.52 -1.25 6.79 6.37 10.62 10.68 23.24
State of MO 11.76 7.06 12.64 7.67 -39.31 8.71 7.14 12.56 12.58 29.10
Comparable Group Average 13.21 -0.42 16.53 6.16 -3.87 -0.30 -0.29 13.20 13.20 31.94
Mid-West Companies 13.21 -0.42 16.53 6.16 -3.87 -0.30 -0.29 13.20 13.20 31.94
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CMRN Cameron Fin. Corp. of MO 1.73 -40.02 14.41 1.12 NM -2.88 -2.88 20.10 20.10 31.83
CAPS Capital Savings Bancorp of MO 10.55 6.44 10.69 4.77 64.71 4.82 4.82 9.11 9.11 19.27
FBSI First Bancshares of MO 14.51 -6.24 18.81 4.64 NM -2.00 -1.93 13.31 13.31 20.50
FFSL First Independence Corp. of KS 5.90 7.93 5.34 12.54 -10.18 -4.47 -4.47 10.32 10.32 24.83
GFSB GFS Bancorp of Grinnell IA 27.01 20.84 27.46 15.78 NM 3.82 3.82 10.06 10.06 18.49
NSLB NS&L Bancorp of Neosho MO 19.17 32.44 12.82 4.17 NM NM NM 17.50 17.50 49.80
PCBC Perry Co. Fin. Corp. of MO(1) 8.24 6.47 10.80 -3.49 -100.00 NM NM 15.83 15.83 85.87
SMFC Sho-Me Fin. Corp. of MO 28.03 -4.59 30.87 16.11 NM -4.90 -4.90 9.48 9.48 18.24
SMBC Southern Missouri Bncrp of MO 9.93 -21.07 24.60 2.74 NM -0.59 -0.59 12.33 12.33 26.24
SFFC StateFed Financial Corp. of IA 7.00 -6.37 9.51 3.26 30.00 3.80 3.80 13.92 13.92 24.32
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, Inc. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP Financial, LC.
Page 3.7
The asset compositions of the Bank and the Peer Group were similar, with
loans receivable constituting the majority of IEA for both. The Bank's ratio of
loans to assets exceeded the Peer Group's ratio (89.7 percent of assets versus
67.1 percent for the Peer Group), while the Peer Group recorded a higher level
of MBS (11.2 percent versus an average of 0.6 percent for the Bank). The Bank
maintains a relatively low balance of cash and investments as part of its
operating strategy, and the portfolio totaled 2.3 percent of total assets. In
contrast, the Peer Group maintained a substantially higher ratio of cash and
investments (19.3 percent of assets) due to a combination of lower lending
diversity and lower growth markets exhibited by several of the Peer Group
members. Following the conversion, the Bank's level of cash and investments is
likely to initially increase pending the Bank's deployment of the proceeds.
Overall, the Bank's IEA totaled 92.6 percent of assets, which was lower than the
Peer Group's ratio of 97.6 percent.
The Bank's funding liabilities reflect a funding strategy similar to the
Peer Group's. Both the Bank and the Peer Group have relied on deposits as the
primary source of funds, as reflected in the current deposits to assets ratios
of 78.8 percent and 70.3 percent, respectively. Likewise, both the Bank and the
Peer Group used borrowings as a supplemental source of funds, with borrowings to
assets ratios of 10.4 percent and 11.5 percent, respectively. Total interest-
bearing liabilities ("IBL") maintained by the Bank and the Peer Group equaled
89.2 percent and 81.8 percent, respectively, with the Peer Group's lower ratio
attributable to its higher capital ratio. On a pro forma basis, the Bank's IBL
ratio will decline substantially as a result of the Bank's enhanced capital base
and potential deposit withdrawals to fund stock purchases.
The growth rate section of Table 3.2 shows growth rates for key balance
sheet items. The growth rates for the Bank are for the nine months ended March
31, 1996 while growth rates for the Peer Group are for the latest trailing
twelve months available. The Bank reported asset shrinkage of 9.93 percent since
June 30, 1995, while the Peer Group reported asset growth equal to 13.21
percent. The Bank's balance sheet shrinkage occurred through the sale of IEA,
although loans declined slightly as well. The Bank used the proceeds from the
sale to pay down FHLB advances, and the Bank's deposits declined slightly as
well. The higher growth rates for the Peer Group were influenced by the recent
conversions of some of the Peer Group members which underscores the Peer Group's
growth in MBS. The Peer Group funded asset growth through a combination of
deposits and borrowings (the average borrowings growth rate shown for the Peer
Group in Table 3.2 is not meaningful since growth rates in excess of 100 percent
are shown as "NMs" and are not included in the average). Capital growth rates
for the Bank and the Peer Group were not directly comparable since (1) two of
the Peer Group companies completed their conversions within the trailing twelve
month period; and (2) many of the Peer Group companies were paying dividends
and/or repurchasing their stock with excess capital during the past 12 months.
<PAGE>
RP Financial, LC.
Page 3.8
Income and Expense Components
- -----------------------------
For the twelve months ended March 31, 1996, the Bank's net income amounted
to 0.61 percent of average assets, below the 1.04 percent average return posted
by the Peer Group (see Table 3.3). An examination of the components of income
and expense for the Bank and the Peer Group indicate similarities, although
there are some differences worth noting.
Net interest income was the primary component of the Bank's and the Peer
Group's earnings. The Bank maintained a lower level of net interest income
relative to the Peer Group (3.12 percent of average assets versus 3.23 percent
for the Peer Group). The Bank's lower net interest income was attributable to
substantially higher interest expenses (4.80 percent of average assets versus
4.12 percent for the Bank), which resulted from the Bank's higher cost of funds
and lower capital ratio. The Bank's higher interest expense ratio more than
offset the Bank's higher interest income ratio (7.92 percent for the Bank versus
7.35 percent for the Peer Group). The Bank's higher cost of funds was
attributable to the higher than average deposit rates paid by the Bank. The
reinvestment of the net conversion proceeds may serve to initially dilute the
Bank's asset yields due to current market rates on short- to intermediate-term
investment securities but the net interest margin should increase with an
increase in the IEA/IBL ratio.
In another key area of core earnings strength, the Bank operates with a
substantially higher operating expense ratio than the Peer Group (2.65 percent
versus 1.92 percent of assets for the Peer Group), which is attributable to its
loan volume and secondary market activities. These features have inflated the
Bank's staffing requirements and compensation expenses, as evidenced by the
Bank's lower assets per employee ratio relative to the Peer Group median ($1.795
million and $4.270 million, respectively). Going forward, the Bank's operating
expenses will be subject to increases related to operations as a public company
and stock plan expenses, thus making the Bank's operating expenses subject to
the same factors as the Peer Group. Overall, at the midpoint of the valuation
range, the operating expense ratio can be expected to increase by 35 to 40 basis
points.
When viewed together, net interest income and operating expenses provide
insight into an institution's earnings strength, since those sources of income
and expense are typically the most prominent components of earnings and are
generally more predictable than losses and gains realized from the sale of
assets or other non-recurring activities. An expense coverage ratio of greater
than 1.0x indicates that an institution is able to sustain pre-tax profitability
with less reliance on non-interest sources of income. In this regard, as
measured by their expense coverage ratios (net interest income divided by
operating expenses), the Peer Group enjoys a substantial advantage over the Bank
based on expense coverage ratios of 1.68 and 1.18 times, respectively.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Table 3.3
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1996
Net Interest Income Other Income
---------------------------- -------------------
Loss NII Total
Net Provis. After Loan R.E. Other Other
Income Income Expense NII on IEA Provis. Fees Oper. Income Income
------ ------ ------- ------- ------- ------- ---- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Community Bank of MO
- --------------------
March 31, 1996 0.61 7.92 4.80 3.12 0.25 2.87 0.00 0.00 0.47 0.47
SAIF-Insured Thrifts 0.87 7.36 4.19 3.16 0.10 3.05 0.12 -0.01 0.30 0.41
State of MO 0.96 7.32 4.23 3.09 0.04 3.06 0.05 0.02 0.30 0.37
Comparable Group Average 1.04 7.35 4.12 3.23 0.04 3.19 0.04 0.05 0.18 0.28
Mid-West Companies 1.04 7.35 4.12 3.23 0.04 3.19 0.04 0.05 0.18 0.28
Comparable Group
- ----------------
Mid-West Companies
- -------------------
CMRN Cameron Fin. Corp. of MO 1.61 7.85 3.79 4.06 0.11 3.95 0.06 0.00 0.07 0.13
CAPS Capital Savings Bancorp of MO 0.95 7.57 4.22 3.35 0.06 3.29 0.10 0.01 0.30 0.40
FBSI First Bancshares of MO 0.78 7.32 4.13 3.19 0.07 3.12 0.00 0.08 0.21 0.30
FFSL First Independence Corp. of KS 1.14 7.60 4.44 3.16 0.00 3.16 0.22 0.11 0.00 0.32
GFSB GFS Bancorp of Grinnell IA 1.09 7.89 4.74 3.15 0.03 3.12 0.00 0.01 0.12 0.12
NSLB NS&L Bancorp of Neosho MO 0.94 6.39 3.24 3.16 0.02 3.14 0.01 0.00 0.33 0.34
PCBC Perry Co. Fin. Corp. of MO(1) 1.00 6.64 3.93 2.71 0.00 2.71 0.00 0.00 0.06 0.06
SMFC Sho-Me Fin. Corp. of MO 0.83 7.40 4.37 3.03 0.05 2.99 0.02 0.00 0.35 0.37
SMBC Southern Missouri Bncrp of MO 0.87 6.95 4.01 2.94 0.04 2.90 0.03 0.04 0.29 0.35
SFFC StateFed Financial Corp. of IA 1.18 7.86 4.35 3.51 0.03 3.48 0.00 0.30 0.08 0.38
<CAPTION>
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
---------------- -------------- -------------------------
MEMO: MEMO:
G&A Goodwill Net Extrao. Yield Cost Yld-Cost Assets/ Effective
Expense Amort. Gains Items On Assets Of Funds Spread FTE Emp. Tax Rate
------- ------- ------- ------- --------- -------- ------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Community Bank of MO
- --------------------
March 31, 1996 2.65 0.00 0.27 0.00 7.91 5.18 2.73 1,795 36.09
SAIF-Insured Thrifts 2.22 0.02 0.09 0.00 7.59 4.84 2.74 4,041 36.00
State of MO 2.00 0.01 0.06 0.00 7.55 5.02 2.54 3,880 35.66
Comparable Group Average 1.92 0.00 0.03 0.00 7.58 5.06 2.52 4,270 35.74
Mid-West Companies 1.92 0.00 0.03 0.00 7.58 5.06 2.52 4,270 35.74
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CMRN Cameron Fin. Corp. of MO 1.61 0.00 0.03 0.00 8.03 5.36 2.67 4,539 35.81
CAPS Capital Savings Bancorp of MO 2.13 0.00 0.00 0.00 7.70 4.80 2.90 3,116 38.99
FBSI First Bancshares of MO 2.18 0.01 0.02 0.00 7.51 5.06 2.45 2,809 37.19
FFSL First Independence Corp. of KS 1.86 0.00 0.00 0.00 7.71 5.20 2.52 4,619 45.72
GFSB GFS Bancorp of Grinnell IA 1.73 0.00 0.04 0.00 7.99 5.51 2.49 5,057 29.78
NSLB NS&L Bancorp of Neosho MO 2.22 0.00 0.10 0.00 6.57 4.22 2.35 3,281 30.75
PCBC Perry Co. Fin. Corp. of MO(1) 1.18 0.00 0.00 0.00 6.73 4.87 1.87 7,732 37.16
SMFC Sho-Me Fin. Corp. of MO 2.11 0.00 0.01 0.00 7.62 5.09 2.53 3,665 39.89
SMBC Southern Missouri Bncrp of MO 2.15 0.00 0.08 0.00 7.60 4.94 2.66 3,240 27.19
SFFC StateFed Financial Corp. of IA 2.06 0.00 0.00 0.00 8.29 5.54 2.75 4,636 34.92
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, Inc. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP Financial, LC.
Page 3.10
Non-interest operating income made a higher contribution to the Bank's
earnings than the Peer Group's earnings, offsetting some of the disadvantage in
core earnings. For the trailing twelve months ended March 31, 1996, the Bank
recorded non-interest operating income of 0.47 percent of average assets versus
a level of 0.28 percent recorded by the Peer Group. The Bank's non-interest
operating income level was above the industry average of 0.41 percent, which
reveals the greater diversity of operations at Community Bank, as the Bank
derives substantially more non-interest income from loan servicing operations
and loan origination fees on loans sold. Other sources of non-interest operating
income for the Bank and the Peer Group include deposit fees, service charges and
late charges on loans, and other miscellaneous fee revenues. Going forward, the
Bank anticipates that non-interest operating income will continue to contribute
significant amounts to overall revenues, particularly as the portfolio of loans
serviced for others grows.
Over the last five fiscal years, non-recurring gains and losses have had a
varying impact on the Bank's earnings. The gains of 0.27 percent of average
assets recorded for the twelve months ended March 31, 1996 were attributable to
the sale of IEA. The Peer Group derived most of their earnings from core
sources of income and recorded only three basis point of non-recurring income,
on average. Going forward, non-operating gains and losses are expected to
contribute moderate amounts to the Bank's earnings from time to time as loans
and investments in the "available-for-sale" portfolio are sold. The Bank also
established higher loan loss provisions than the Peer Group, although both the
Bank and the Peer Group reported sound asset quality.
Loan Composition
- ----------------
Table 3.4 presents data related to the loan composition of the Bank and the
Peer Group. An emphasis on low risk residential lending was apparent in both the
Bank's and the Peer Group's loan portfolios, with 1-4 family permanent mortgage
loans and MBS accounting for 61.2 percent and 81.2 percent of the Bank's and the
Peer Group's total loan and MBS portfolios, respectively. The Bank and several
of the Peer Group sell loans in the secondary market with servicing retained,
thereby deriving fee income through loans serviced for others, although the
Bank's servicing portfolio was larger than the Peer Group's average servicing
portfolio. The Bank's maintained a comparable level of 1-4 family residential
mortgages and a much lower level of MBS than the Peer Group.
The Bank's loan portfolio exhibited significantly greater diversification
into higher risk weight loans than the Peer Group's average loan portfolio.
Construction lending is the Bank's primary method of lending diversification,
and such loans comprised 24.9 percent of the total loan and MBS portfolio at
March 31, 1996. The Bank also maintains a substantial balance of consumer loans,
which totaled 12.3 percent of total loans and
<PAGE>
RP Financial, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Table 3.4
Loan Portfolio Composition and Related Information
Comparable Institution Analysis
As of March 31, 1996
Portfolio Composition as a Percent of MBS and Loans
----------------------------------------------------------
1-4 Constr. 5+Unit Commerc.
Institution MBS Family & Land Comm RE Business Consumer
----------- ------- ------ ------- ------- -------- --------
(%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Community Bank of MO 0.63 60.61 24.87 1.55 0.00 12.33
SAIF-Insured Thrifts 16.71 60.95 4.83 11.47 1.59 6.08
State of MO 17.21 65.65 6.80 8.50 1.08 3.05
Comparable Group Average 16.56 64.64 7.25 9.98 0.73 3.42
Comparable Group
----------------
CMRN Cameron Fin. Corp. of MO 0.01 72.80 29.22 5.25 0.10 3.25
CAPS Capital Savings Bancorp of MO 10.29 79.43 1.73 3.01 0.00 6.18
FBSI First Bancshares of MO 1.02 78.36 7.17 6.67 2.10 6.01
FFSL First Independence Corp. of KS 25.34 61.88 1.69 9.80 0.00 1.92
GFSB GFS Bancorp of Grinnell IA 5.29 64.72 8.05 22.51 1.55 1.38
NSLB NS&L Bancorp of Neosho MO 17.17 76.36 3.48 0.52 0.00 5.67
PCBC Perry Co. Fin. Corp. of MO(1) 77.79 19.33 1.77 0.38 0.01 1.11
SMFC Sho-Me Fin. Corp. of MO 3.19 73.09 10.49 11.87 0.54 3.52
SMBC Southern Missouri Bncrp of MO 25.48 52.56 4.74 10.09 2.69 4.44
SFFC StateFed Financial Corp. of IA 0.00 67.92 4.17 29.64 0.00 0.74
<CAPTION>
RWA/ Serviced Servicing
Institution Assets For Others Assets
----------- ______ __________ ______
(%) ($000) ($000)
<S> <C> <C> <C>
Community Bank of MO 74.47 30,967 0
SAIF-Insured Thrifts 50.35 409,569 2,446
State of MO 49.32 154,665 1,216
Comparable Group Average 48.28 6,776 0
Comparable Group
----------------
CMRN Cameron Fin. Corp. of MO 61.86 0 0
CAPS Capital Savings Bancorp of MO 48.59 48,637 0
FBSI First Bancshares of MO 64.09 22 0
FFSL First Independence Corp. of KS 43.04 2,792 0
GFSB GFS Bancorp of Grinnell IA 56.18 3,976 0
NSLB NS&L Bancorp of Neosho MO 34.33 0 0
PCBC Perry Co. Fin. Corp. of MO(1) 17.98 0 0
SMFC Sho-Me Fin. Corp. of MO 54.35 12,336 0
SMBC Southern Missouri Bncrp of MO 46.91 0 0
SFFC StateFed Financial Corp. of IA 55.47 0 0
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, Inc. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP Financial, LC.
Page 3.12
MBS. The Peer Group achieved most of their loan portfolio diversification
through a combination of income property lending and construction lending, which
averaged 9.98 percent and 7.25 percent of total loans and MBS, respectively.
Overall, however, the Bank's loan portfolio diversification was substantially
above that of the Peer Group, as the Bank's construction and consumer loans
totaled 37.2 percent of total loans and MBS, while the Peer Group's combined
level of income property loans and construction loans totaled only 17.2 percent.
The Bank's greater diversification into higher risk-weight loans was reflected
in the substantially higher risk-weighted asset base than was recorded by the
Peer Group (74.47 percent risk-weighted assets for Community Bank versus 48.28
percent for the Peer Group).
Credit Risk
- -----------
The Bank's credit risk exposure appears to be higher than the Peer Group's
exposure based on the Bank's higher level of risk weight assets, although the
Bank's current asset quality ratios are slightly favorable to the Peer Group's.
As shown in Table 3.5, as of March 31, 1996, the Bank recorded NPAs of 0.38
percent of assets, lower than the Peer Group average of 0.57 percent, and
maintained a lower ratio of non-performing loans ("NPLs") to loans of 0.41
percent versus 0.57 percent for the Peer Group. The Bank's and most of the Peer
Group's NPAs consist of non-accruing loans. The Bank and the Peer Group
maintained similar ratios of reserves to loans of 0.45 percent and 0.54 percent,
respectively. The Bank maintained a higher level of loss reserves as a percent
of NPAs (105.79 percent versus 69.64 percent for the Peer Group), although the
ratio of reserves to loans receivable was lower despite the Bank's higher risk
weighted assets level, based on ratios of 0.45 percent and 0.54 percent for the
Bank and the Peer Group, respectively.
Interest Rate Risk
- ------------------
Table 3.6 reflects the relative interest rate risk exposure of the Bank and
the Peer Group. The Bank's lower capital level was the key factor contributing
to its lower IEA/IBL ratio relative to the Peer Group (107.5 percent versus
119.7 percent, respectively). The Bank's lower capital and IEA/IBL ratios
increases its funding costs relative to the Peer Group. However, the Bank's
capital ratio and IEA/IBL ratio will increase on a post-conversion basis. The
Bank maintained a higher ratio of non-interest earning assets, which is less
favorable from an interest rate risk perspective as it decreases the proportion
of assets repricing upward in a rising rate environment, although the difference
was nominal.
In the absence of available or comparable gap and rate shock analyses for
the Peer Group, the change in the quarterly net interest income ratio to average
assets for the Bank and the Peer Group has been examined in relation to the
change in market interest rates. As shown in Table 3.6, the Bank's net interest
margin has
<PAGE>
RP Financial LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Table 3.5
Credit Risk Measures and Related Information
Comparable Institution Analysis
As of March 31, 1996 or Most Recent Date Available
NPAs & Rsrves/
REO/ 90+Del/ NPLs/ Rsrves/ Rsrves/ NPAs &
Institution Assets Assets Loans Loans NPLs 90+Del
----------- ------ ------ ------- ------ ------ --------
(%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Community Bank of MO 0.01 0.38 0.41 0.45 109.46 105.79
SAIF-Insured Thrifts 0.21 0.95 1.03 0.87 167.21 125.76
State of MO 0.17 0.73 0.64 0.71 136.56 71.04
Comparable Group Average 0.05 0.57 0.57 0.54 135.41 69.64
Comparable Group
----------------
CMRN Cameron Fin. Corp. of MO 0.00 0.79 0.47 0.81 172.10 86.49
CAPS Capital Savings Bancorp of MO 0.04 0.20 0.19 0.38 206.14 152.91
FBSI First Bancshares of MO 0.00 0.43 0.11 0.44 392.31 83.74
FFSL First Independence Corp. of KS 0.00 0.96 1.16 1.10 95.30 70.41
GFSB GFS Bancorp of Grinnell IA 0.08 0.97 1.07 0.61 56.75 52.35
NSLB NS&L Bancorp of Neosho MO 0.00 0.18 0.25 0.15 60.56 40.95
PCBC Perry Co. Fin. Corp. of MO(1) 0.00 0.04 0.33 0.10 31.25 31.25
SMFC Sho-Me Fin. Corp. of MO 0.00 NA NA 0.75 NA NA
SMBC Southern Missouri Bncrp of MO 0.42 0.97 0.97 0.66 68.84 39.01
SFFC StateFed Financial Corp. of IA 0.00 NA NA 0.38 NA NA
<CAPTION>
Net Loan NLCs/
Institution Chargoffs Loans
----------- --------- ---------
($000) (%)
<C> <C>
<S> 67 0.09
Community Bank of MO
SAIF-Insured Thrifts 243 0.12
State of MO 54 0.01
Comparable Group Average 5 0.02
Comparable Group
----------------
CMRN Cameron Fin. Corp. of MO 1 0.00
CAPS Capital Savings Bancorp of MO 0 0.00
FBSI First Bancshares of MO 46 0.16
FFSL First Independence Corp. of KS 0 0.00
GFSB GFS Bancorp of Grinnell IA 0 0.00
NSLB NS&L Bancorp of Neosho MO 0 0.00
PCBC Perry Co. Fin. Corp. of MO(1) 0 0.00
SMFC Sho-Me Fin. Corp. of MO 2 0.00
SMBC Southern Missouri Bncrp of MO 3 0.01
SFFC StateFed Financial Corp. of IA 0 0.00
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, Inc. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Balance Sheet Measures
--------------------------
Non-Earn.
Equity/ IEA/ Assets/
Institution Assets IBL Assets
----------- ------- ----- -------
(%) (%) (%)
<S> <C> <C> <C>
Community Bank of MO 9.1 107.5 4.1
SAIF-Insured Thrifts 12.8 114.2 3.2
State of MO 15.3 117.6 2.7
Comparable Group Average 17.1 119.7 2.4
Market Interest Rates
---------------------
1 Year Treasury Bill -- -- --
30 Year Treasury Bond -- -- --
Comparable Group
----------------
CMRN Cameron Fin. Corp. of MO 26.5 134.7 2.7
CAPS Capital Savings Bancorp of MO 10.4 111.4 1.8
FBSI First Bancshares of MO 16.9 117.7 2.6
FFSL First Independence Corp. of KS 12.6 113.9 1.5
GFSB GFS Bancorp of Grinnell IA 12.0 113.4 1.4
NSLB NS&L Bancorp of Neosho MO 23.5 130.0 2.4
PCBC Perry Co. Fin. Corp. of MO(1) 20.9 125.9 1.4
SMFC Sho-Me Fin. Corp. of MO 12.0 111.3 3.0
SMBC Southern Missouri Bncrp of MO 16.4 118.6 2.3
SFFC StateFed Financial Corp. of IA 20.1 119.9 5.2
<CAPTION>
Table 3.6
Interest Rate Risk Measures and Net Interest Income Volatility
Comparable Institution Analysis
As of March 31, 1996 or Most Recent Date Available
Quarterly Change in Net Interest Income
----------------------------------------------------------
Institution 03/31/96 12/31/95 09/30/95 06/30/95 03/31/95 12/31/94
----------- -------- -------- -------- -------- -------- --------
(change in net interest income is annualized in basis points)
<S> <C> <C> <C> <C> <C> <C>
Community Bank of MO 19 38 -18 -31 -48 -27
SAIF-Insured Thrifts 3 4 -1 -10 -6 1
State of MO 8 7 1 -4 -6 2
Comparable Group Average 6 -2 0 0 -14 -0
Market Interest Rates
---------------------
1 Year Treasury Bill 24 5 -84 -74 127 45
30 Year Treasury Bond 71 -12 -80 -45 6 21
Comparable Group
----------------
CMRN Cameron Fin. Corp. of MO 9 2 2 73 -22 2
CAPS Capital Savings Bancorp of MO -9 -1 -7 3 0 -12
FBSI First Bancshares of MO 8 7 -10 19 2 NA
FFSL First Independence Corp. of KS 1 -32 -9 -11 -17 -8
GFSB GFS Bancorp of Grinnell IA 29 0 -15 -19 -27 7
NSLB NS&L Bancorp of Neosho MO -29 22 13 -16 9 4
PCBC Perry Co. Fin. Corp. of MO(1) NA -3 2 -1 13 -18
SMFC Sho-Me Fin. Corp. of MO 13 2 11 -11 -34 -7
SMBC Southern Missouri Bncrp of MO 28 -4 5 -13 -31 16
SFFC StateFed Financial Corp. of IA 8 -10 11 -19 -31 12
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
NA-Change is greater than 100 basis points during the quarter.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, Inc. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP Financial, LC.
Page 3.15
recently shown moderately more sensitivity to changing market interest rates
than the Peer Group's average net interest margin. On a pro forma basis, the
Bank's higher capital position and reinvestment of proceeds in short- to
intermediate-term securities can be expected to partially offset some of this
interest rate risk.
Summary
- -------
Based on the above analysis and the criteria employed by in the Peer Group
selection process, the Peer Group appears to form a reasonable basis for
determining the pro forma market value of the Bank, subject to the adjustments
noted in the following section.
<PAGE>
RP Financial, L.C.
Page 4.1
IV. VALUATION ANALYSIS
Introduction
- ------------
This chapter presents the valuation analysis, consistent with the current
valuation methodology promulgated by the OTS, and the key valuation factors and
assumptions considered in estimating the pro forma market value of the common
stock to be issued in conjunction with the conversion of the Bank from the
mutual-to-stock form of ownership.
Appraisal Guidelines
- --------------------
The OTS appraisal guidelines, originally released in October 1983 and
amended October 1994, specify the methodology for estimating the pro forma
market value of an institution. The methodology provides for: (1) selection of a
peer group of comparable seasoned publicly-traded institutions whose pricing is
not distorted due to a variety of factors; (2) a fundamental analysis of the
subject company to the peer group; and (3) a pro forma valuation analysis of the
subject company based on the market pricing of the peer group as of the date of
valuation. The amended valuation guidelines also limit the amount of a new issue
discount which may be incorporated into the valuation and thereby curtail the
potential price appreciation in the after-market.
RP Financial's valuation analysis complies with the appraisal guidelines as
revised October 21, 1994, incorporating a "fundamental analysis" relative to the
Peer Group and a "technical analysis" of final conversion pricing and trading
levels of recently completed stock conversions (given the emphasis of limiting
after-market appreciation). It should be noted that such analyses cannot
possibly fully account for all the market forces which impact after-market
trading activity and pricing characteristics of a stock on a given day.
The estimated pro forma market value determined herein is a preliminary
value for the Holding Company's to-be-issued stock. Throughout the conversion
process, RP Financial will: (1) review changes in the Bank's operations and
financial condition; (2) monitor the Bank's operations and financial condition
relative to the Peer Group to identify any fundamental changes; (3) monitor the
external factors affecting value including, but not limited to, local and
national economic conditions, interest rates, and the stock market environment,
including the market for thrift stocks; and (4) monitor recently completed
conversions and conversion offerings in process, both regionally and nationally.
If material changes should occur during the Bank's conversion process, RP
Financial will prepare updated valuation reports reflecting such changes and
their related impact on value, if any, over the course of the conversion
process. RP Financial will also prepare a final valuation update at the closing
of the conversion offering to determine if the preliminary range of value
continues to be appropriate.
<PAGE>
RP Financial, L.C.
Page 4.2
The appraised value determined herein is based on the current market and
operating environment for the Bank and for all thrifts. Subsequent changes in
the local and national economy, the legislative and regulatory environment, the
stock market, interest rates, and other external forces (such as natural
disasters or major world events), which may occur from time to time (often with
great unpredictability), may materially impact the market value of all thrift
stocks, including the Bank, or the Bank's value alone. To the extent a change
in factors impacting the Bank's value can be reasonably anticipated and/or
quantified, RP Financial has incorporated the estimated impact into our
analysis.
Valuation Analysis
- ------------------
A fundamental analysis discussing similarities and differences relative to
the Peer Group was presented in Chapter III. The following sections focus on
differences between Community Bank and the Peer Group and how those differences
affect our pro forma valuation. Emphasis is placed on the specific strengths and
weaknesses of the Bank relative to the Peer Group in such key areas as financial
condition, profitability, growth and viability of earnings, asset growth,
primary market area, dividends, liquidity of the issue, marketing of the issue,
management, and the effect of government regulations and/or regulatory reform.
We have also considered the market for thrift stocks, including new issues, to
assess the impact on value of the Bank coming to market at this time.
1. Financial Condition
-------------------
The financial condition of an institution is an important determinant in
the pro forma market value, because investors typically look to such factors as
liquidity, capital, asset composition and quality, and funding sources in
assessing investment attractiveness. The similarities and differences in the
Bank's and the Peer Group's financial condition are noted as follows:
o Overall A/L Composition. 1-4 family residential mortgage loans funded
-----------------------
by retail deposits were the primary components of both the Bank's and
the Peer Group's balance sheets. The Bank's and the Peer Group's
overall level of IEA was similar. Key differences include the Bank's
higher level of loans receivable and the Bank's greater loan portfolio
diversification into higher risk-weight loans. The Peer Group
currently maintains a higher IEA/IBL ratio due to their currently
higher capital ratio, although the Bank's ratio will more closely
approximate the Peer Group's ratio on a pro forma basis. Both the
Bank and the Peer Group utilized borrowings to supplement deposit
funding. On balance, while the Bank's asset composition seemingly
represents the potential for higher earnings given the higher credit
risk, the higher cost funding structure diminishes such potential in
the short-run.
o Asset Quality. While the Bank and the Peer Group currently have
-------------
strong asset quality, as demonstrated by their low NPA ratios, the
Bank maintains a higher credit risk profile with its higher risk-
weighted assets ratio. The Bank's reserve coverage ratio is slightly
more favorable
<PAGE>
RP Financial, L.C.
Page 4.3
than the Peer Group's ratio, although both maintain similar levels of
GVAs as a percent of loans. Arguably, the Bank maintains a lower
reserve position when taking the higher risk-weight assets ratio into
account.
o Balance Sheet Liquidity. The Bank operates with substantially lower
-----------------------
balance sheet liquidity than the Peer Group based on the lower ratio
of cash and investment securities and MBS than the Peer Group.
Furthermore, both the Bank and the Peer Group maintain similar levels
of borrowings, indicating similar future borrowings capacity. The
Bank generates its liquidity by selling loans in the secondary market
and maintaining a portfolio of investment securities classified as
"available-for-sale". The Bank's liquid assets will also increase
with the infusion of the stock proceeds. Overall, however, the Bank's
balance sheet liquidity was significantly less favorable than the Peer
Group's liquidity.
o Capital. While the Bank operates with a lower pre-conversion capital
-------
ratio than the Peer Group, this disadvantage will be addressed as a
result of the stock offering. The Bank's pro forma equity to assets
ratio will approximate the Peer Group's equity-to-assets ratio,
providing the Bank with similar leverage potential and cushion against
loss but a lower pro forma ROE.
On balance, RP Financial applied a moderate downward adjustment for
financial condition.
2. Profitability, Growth and Viability of Earnings
-----------------------------------------------
Earnings are an important factor in determining pro forma market value, as
the level and risk characteristics of an institution's earnings stream and the
prospects and ability to generate future earnings are typically heavily factored
into the investment decision. The historical income statements of the Bank and
the Peer Group were generally reflective of traditional thrift operating
strategies, with net interest income and operating expenses being the major
determinants of their respective core earnings. The specific factors considered
in the valuation include:
o Core Earnings. The Bank and the Peer Group derived core earnings from
-------------
net interest income, operating expenses and non-interest operating
income. The Bank reported a lower expense coverage ratio than the
Peer Group due to lower net interest income and higher operating
expenses. However, part of this disadvantage was offset by the Bank's
higher non-interest operating income, a reflection of the Bank's
higher diversification of operations. The Bank's earnings were also
more affected by non-operating income and loan loss provisions than
the Peer Group's earnings. Overall, the Peer Group's core earnings
appear to be more favorable to the Bank's core earnings levels. The
redeployment of conversion proceeds into interest-earning assets
should serve to further enhance the Bank's net interest income,
although higher operating expenses resulting from the amortization of
the stock benefit plans and additional expenses associated with
operating as a stock company will offset some of this increase.
o Interest Rate Risk. The pro forma increase in the IEA/IBL ratio will
------------------
further reduce the Bank's interest rate risk exposure to levels more
consistent to the Peer Group.
o Credit Risk. Loss provisions had a larger impact on the earnings of
-----------
the Bank than the Peer Group. In terms of exposure to credit quality
related losses, the Bank maintained lower NPAs
<PAGE>
RP Financial, LC.
Page 4.4
but a higher reserve coverage ratio than the Peer Group. However, the
Bank's substantially higher risk loan portfolio exposes it to
substantially greater credit risk than the Peer Group.
o Earnings Growth Potential. Several factors were considered in
-------------------------
assessing earnings growth potential. Opportunities for lending growth
in the Bank's market area are currently favorable to the average
market area served by the Peer Group companies in light of the
construction boom occurring in the Kansas City area, and such loans
are generally higher yielding than traditional 30 year mortgages.
However, the strong deposit competition in the market area is likely
to result in higher funding costs, offsetting some the yield advantage
from construction lending. Furthermore, the Bank's construction
lending strategy is contingent upon continuing favorable market
conditions. On balance, however, we concluded that the Bank's earnings
growth potential was slightly favorable to the Peer Group's.
o Return on Equity. Immediately following the conversion, the Bank's
----------------
pro forma return on equity will be well below the Peer Group average
owing to the Bank's lower pro forma profitability. Over time, however,
the Bank anticipates a pick-up in earnings and a concurrent increase
in ROE. Nevertheless, it is expected that the market will consider the
Bank's stock to be less attractive until the Bank can demonstrate its
ability to profitably leverage its equity in a prudent manner.
Overall, we have applied a moderate downward adjustment for profitability,
growth and viability of earnings, largely reflecting the Bank's lower core
earnings, higher credit risk exposure and lower pro forma ROE relative to the
Peer Group.
3. Asset Growth
------------
The Bank's ability to grow on a pro forma basis will be facilitated on a
pro forma basis, although profitable growth will be restricted by the
competitive trends in the Bank's market area and the cost of expansion. The
additional capital and holding company structure would facilitate acquisition
activity or longer-term wholesale leveraging, but there are currently no plans
for such activities. Overall, however, most of the Peer Group members face the
same obstacles to growth as the Bank. Thus, no discount was applied for this
factor.
4. Primary Market Area
-------------------
The general condition of a financial institution's market area has an
impact on value, as future success is in part dependent upon opportunities for
profitable activities in the local market area. Summary demographic and deposit
market share data for the Bank and the Peer Group companies is provided in Table
4.1. The Bank's market area of Clay County, Missouri is a combination of rural
and suburban markets that has been experiencing higher than average demographic
growth over the past decade. In terms of credit risk exposure, the economy in
Clay County has been generally stable, with economic trends tied to the trends
in the Kansas City MSA. The per capita income in the Bank's market was above the
average of the primary
<PAGE>
Table 4.1
Peer Group Primary Market Area Demographic/Competition Trends
<TABLE>
<CAPTION>
Proj.
Population Pop.
------------------------
Institution County 1990 1995 2000
- ----------- ------ ---- ---- ----
(000) (000)
<S> <C> <C> <C> <C>
Cameron Fin. Corp. of MO Clinton 17 18 19
Capital Savings Bancorp of MO Cole 64 68 72
First Bancshares of MO Wright 17 18 20
First Independence Corp. of KS Montgomery 39 37 37
GFS Bancorp of Grinnell, IA Poweshiek 19 19 19
NS&L Bancorp of MO Newton 44 47 50
Perry Co. Fin. Corp. of MO Perry 17 17 18
Sho-Me Fin. Corp. of MO Lawrence 30 32 33
Southern Missouri Bncrp. of MO Butler 39 40 42
StateFed Financial Corp. of IA Polk 327 350 372
--- --- ---
Averages: 61 65 68
Medians: 35 35 35
Community Bank of MO Clay 153 166 177
<CAPTION>
Per Capita Income Deposit
--------------------------------
1990-95 1995-2000 % State Market
Institution County % Change % Change Median Age Amount Average Share(1)
- ----------- ------ -------- -------- ---------- ------ ------- --------
<S> <C> <C> <C> <C> <C>
Cameron Fin. Corp. of MO Clinton 6.1% 5.4% 36.2 12,510 86.9% 41.6%
Capital Savings Bancorp of MO Cole 6.7% 6.0% 34.1 15,908 110.6% 6.6%
First Bancshares of MO Wright 8.7% 7.6% 35.8 8,517 59.2% 29.1%
First Independence Corp. of KS Montgomery -3.5% -1.5% 36.7 11,364 79.9% 13.7%
GFS Bancorp of Grinnell, IA Poweshiek 0.1% 0.1% 35.3 12,823 97.4% 16.4%
NS&L Bancorp of MO Newton 6.8% 6.0% 35.9 12,291 85.4% 18.3%
Perry Co. Fin. Corp. of MO Perry 4.7% 4.2% 35.2 12,781 88.8% 22.5%
Sho-Me Fin. Corp. of MO Lawrence 4.6% 4.2% 36.3 11,250 78.2% 22.1%
Southern Missouri Bncrp. of MO Butler 4.5% 4.1% 36.9 10,436 72.5% 16.6%
StateFed Financial Corp. of IA Polk 7.0% 6.2% 33.3 16,864 128.1% 1.0%
---- ---- ---- ------ ------ ----
Averages: 4.6% 4.2% 35.6 12,474 88.7% 18.8%
Medians: 5.4% 4.8% 35.9 12,401 86.2% 17.5%
Community Bank of MO Clay 8.0% 7.1% 33.8 $16,287 113.2% 4.0%
</TABLE>
(1) Total institution deposits in headquarters county as percent of total county
deposits.
Source: CACI, Inc; FDIC; OTS.
<PAGE>
RP Financial, L.C.
Page 4.6
markets of the Peer Group members. However, the Bank faces a high degree of
competition for deposits from the 17 commercial banks and 7 other savings
institutions operating in the market area.
Most of the Peer Group companies operate in rural areas. In terms of
competition, all of the Peer Group members face significant competition from
commercial banks and thrifts operating in their market areas. On balance, we
concluded that the favorable demographic characteristics in the Bank's market
area were only partially offset by the strong competition, and have applied a
slight upward adjustment for this factor.
5. Dividends
---------
The Holding Company presently has not established a dividend policy, but
will consider instituting a cash dividend policy at some point in the future,
based on numerous factors including growth objectives, financial condition, the
amount of net proceeds retained by the Holding Company in the conversion,
investment opportunities available to the Holding Company and the Bank,
profitability, tax considerations, minimum capital requirements, regulatory
limitations, stock market characteristics and general economic conditions.
Historically, thrifts typically have not established dividend policies at
the time of their conversion to stock ownership. Newly converted institutions,
in general, have preferred to gain market seasoning, establish an earnings track
record and more fully invest the conversion proceeds before establishing a
dividend policy. However, during the late 1980s and early 1990s, with negative
publicity surrounding the thrift industry, there was a tendency for more thrifts
to initiate moderate dividend policies concurrent with their conversion as a
means of increasing the attractiveness of the stock offering. Today, fewer
institutions are compelled to initially establish dividend policies at the time
of their conversion offering to increase the attractiveness of the stock issue
as (1) industry profitability has improved, (2) the number of problem thrift
institutions has declined, and (3) the stock market cycle for thrift stocks is
generally more favorable than in the early 1990s. At the same time, with ROE
ratios under pressure, due to high equity levels, well-capitalized institutions
are subject to increased competitive pressures to offer dividends.
As publicly-traded thrifts' capital levels and profitability have improved
and as weakened institutions have been resolved, the proportion of institutions
with cash dividend policies has increased. Nine out of the ten institutions in
the Peer Group presently pay regular cash dividends, with implied dividend
yields ranging from 1.29 percent to 3.89 percent. The average dividend yield on
the stocks of the Peer Group institutions was 2.06 percent as of June 14, 1996,
representing an average earnings payout ratio of 27.90 percent. As of June 14,
1996, approximately 75 percent of all publicly-traded SAIF-insured thrifts had
adopted cash dividend policies (see Exhibit IV-1), exhibiting an average yield
of 2.48 percent and an average payout ratio of 34.65 percent. The dividend
paying thrifts generally maintain higher than average profitability ratios,
facilitating their ability to
<PAGE>
RP Financial, L.C.
Page 4.7
pay cash dividends, which supports a market pricing premium on average relative
to non-dividend paying thrifts.
The Holding Company will have lower pro forma profitability than the Peer
Group immediately following the conversion, which may restrict its ability to
pay a dividend that is comparable to the Peer Group's average dividend yield.
Accordingly, we have applied a slight downward adjustment for this factor.
6. Liquidity of the Shares
-----------------------
The Peer Group is by definition composed of companies that are traded in
the public markets, all of which trade on the NASDAQ system. Typically, the
number of shares outstanding and market capitalization provides an indication of
how much liquidity there will be in a particular stock. The market
capitalization of the Peer Group companies ranged from $10.4 million to $39.5
million as of June 14, 1996, with an average market value of $19.2 million. The
shares outstanding of the Peer Group members ranged from 0.5 million to 2.9
million, with average shares outstanding of approximately 1.2 million. The
Bank's pro forma market value range and shares outstanding will fall in the
lower end of the Peer Group range. Accordingly, we anticipate that the liquidity
of the Bank's stock will be slightly lower than the Peer Group's and have
applied a slight downward adjustment for this factor.
7. Marketing of the Issue
----------------------
We believe that three separate markets exists for thrift stocks coming to
market: (1) the after-market for public companies, in which trading activity is
regular and investment decisions are made based upon financial condition,
earnings, capital, ROE and dividends; (2) the new issue market in which
converting thrifts are evaluated on a pro forma basis without the benefit of
prior operations as a publicly-held company and stock trading history; and (3)
the acquisition market for thrift franchises in Missouri. All three of these
markets were considered in the valuation of the Bank's to-be-issued stock.
A. The Public Market
-----------------
The value of publicly-traded thrift stocks is easily measurable, and
is tracked by most investment houses and related organizations. In general,
thrift stock values react to market stimuli such as interest rates, inflation,
perceived industry health, projected rates of economic growth, regulatory issues
and stock market conditions in general. Exhibit IV-2 displays historical stock
market trends for various indices and includes historical stock price index
values for thrifts and commercial banks. Exhibit IV-3 displays historical stock
price indices for thrifts only.
<PAGE>
RP Financial, L.C.
Page 4.8
In terms of assessing general stock market conditions, the stock
market has posted generally favorable results over the past year.
The upward trend in the stock market was evident during June 1995, as
the DJIA approached the 4500 mark in mid-June. Economic data which indicated
that the economy was slowing down, such as lower retail sales and a modest
increase in the May consumer price index, increased expectations of an interest
rate cut by the Fed. Technology stocks continued to lead the market, reflecting
the strong earnings growth recorded by the technology sector in general. The
first rate cut in nearly three years propelled the stock market to further new
highs in mid-July, as the DJIA closed above the 4700 mark in the second week of
July.
A more upbeat assessment of the economy by the Fed and mixed economic
data, both of which lessened the likelihood of further rate cuts by the Fed,
caused the stock market to retract modestly in late-July and early-August 1995.
Profit taking and moderating expectations of earnings growth in the technology
sector further contributed to the pull-back in the stock market, while news of
Disney's acquisition of Cap Cities/ABC had little impact on the overall stock
market. The strengthening dollar also served to push the DJIA lower in late
August, as the blue-chip multinational stocks experienced selling pressure in
light of lower earnings expectations from their foreign operations.
The sell-off in the stock market was brief, as the DJIA rebounded
during the first half of September 1995. Technology stocks initially led the
stock market upturn, as investors found technology issues more attractively
priced following the downturn in July and August. Favorable inflation data
bolstered the DJIA in mid-September, as well as provided for a rally in bond
prices. While the DJIA was further boosted by AT&T's breakup announcement,
weakness in the dollar and unfavorable inflation data pushed bond and stock
prices lower in late September.
Quarterly earnings controlled the market in beginning of the fourth
quarter, with day-to-day fluctuations reflecting positive and negative earnings
surprises particularly in the technology sector. Economic data indicating that
the economy was on track for a soft landing provided for a rally in the bond
market and stability in stock in mid-October 1995, which was followed by a broad
sell-off in the stock market in late-October. The sell-off was primarily
attributable to increasing signs of consumer credit weakness and the possibility
that such weakness could lead to a recession. However, the downturn was brief,
as the DJIA rallied to new highs in early- and mid-November. The rally was
initially led by transportation issues, and continued strength in the bond
market. Investors poured into defensive issues during the first budget impasse,
with the DJIA posting several consecutive highs in mid-November. The DJIA
surged past the 5000 mark in late-November, reflecting strength in blue chip
issues and a mild rebound in the technology sector amid increasing expectations
that the Fed would cut short-term interest rates. Defensive issues sustained
the rally through
<PAGE>
RP Financial, L.C.
Page 4.9
early-December, while weakness in the technology sector provided for a slight
pull-back in the stock market in mid-December. At the close of 1995, market
activity was mixed. Favorable inflation data led to a 0.25 percent cut in
interest rates by the Federal Reserve in late December, which served to
initially lift stock prices. However, the second budget impasse and weak holiday
retail sales quickly erased the positive impact of the cut interest rates by the
Fed, as the DJIA dropped sharply one day after the Federal Reserve action. Bond
prices rallies on news of the sagging economy, as the 30-year bond yield fell
below 6.0 percent in late-December.
The stock market began 1996 on a down note, reflecting concern over
the budget stalemate in Washington. A sell-off in technology stocks further
sustained the decline in the stock market, as investors dumped technology stocks
on profit concerns. However, favorable inflation data and strong fourth quarter
earnings by some blue chip issues served to abbreviate the decline in the stock
market, with the DJIA posting several new highs in the second half of January.
Stock prices were further boosted by increasing expectations of another rate cut
by the Federal Reserve, which occurred at the end of January. The stock market
moved sharply higher in early-February, as the cut in short-term interest rates
and strong fourth quarter earnings posted by some large technology companies
served to renew investor interest in technology stocks. Low inflation and
modest economic growth translated into renewed interest for cyclical stocks as
well, with the DJIA posting five consecutive all-time highs during the week
ended February 9. Congressional testimony by the Federal Reserve Chairman
provided for significant swings in the stock market in mid-February, reflecting
changing investor sentiment regarding the possibility of future rate cuts during
the Chairman's two-day testimony. The volatility continued through the end of
February, reflecting turbulence in the bond market and general uncertainty over
future interest rate trends. An unexpectedly large drop in the February
unemployment rate provided for a sharp one day sell-off in the stock market on
March 8, as bond prices plunged on news of the strong job growth and the
possibility that an accelerating economy may lead to higher inflation. However,
the stock market recovered the following week, as inflation fears were somewhat
alleviated by additional economic data which indicated a more modest pace of
economic growth than suggested by the unemployment data, including a 0.2 percent
drop in February wholesale prices. After trading in a narrow range through the
end of March, merger activity and a jump in IBM's stock propelled the DJIA to a
new record in early-April. The upturn was brief, as bond and stock prices
slumped following the stronger than expected March employment report which
served to rekindle inflation fears.
Earnings reports dominated the stock market in mid-April 1996, with
day-to-day fluctuations in the market reflecting changing investor sentiment
regarding the strength of first quarter earnings and future earnings
expectations. Favorable fourth quarter earnings among technology issues pushed
the NASDAQ Composite Index to new highs in late-April and early-May, while blue
chip stocks lagged the overall market. Stronger than expected first quarter GDP
growth stirred major sell-offs in stocks and bonds, resulting in the 30-
<PAGE>
RP Financial, L.C.
Page 4.10
year bond edging above 7.0 percent and a one day drop in the DJIA of almost 77
points. Inflation concerns receded somewhat following a report mid-May report by
the Federal Reserve, which indicated that inflation remained in check and near
term rate increases were not likely. The positive reading on inflation by the
Federal Reserve, along with the Federal Reserve's decision to leave interest
rates unchanged at its late-May meeting, served to strengthen bond and stock
prices, with the DJIA posting new highs in late-May and the 30-year bond
dropping below 7.0 percent. However, signs of an accelerating economy and
revised upward estimates of second quarter GDP growth provided for a pullback in
the stock market at the end of May and into early June. On June 14, 1996, the
DJIA closed at 5649.50, translating into an 10.4 percent increase from year end
1995.
The market for thrift stocks has generally been favorable during the
past twelve months. Following the stock market in general, thrift issues
continued to move higher through the second quarter of 1995. Lower interest
rates, healthy economies in most regions of the U.S. and acquisition speculation
all contributed to the upward trend exhibited in thrift prices. The run-up in
thrift prices moderated somewhat during July and the first half of August 1995,
reflecting profit taking, as thrift prices approached historically high pricing
multiples, and indications of lower profitability due to shrinking net interest
margins. However, the trend in thrift issues remained generally positive, as
acquisitions of thrift issues continued at a healthy pace during the first half
of the third quarter.
The upward trend in thrift prices accelerated in late-August and the
first half of September 1995, as acquisition activity among financial
institutions became more pronounced. Most notably, acquisitions or mergers
involving some of the nation's largest banks were announced during the third
quarter, including the proposed merger between Chase Manhattan and Chemical Bank
which resulted in the largest banking entity in the U.S. A court ruling
favoring thrifts seeking damages against the U.S. government for breach-of-
contract involving the accounting treatment of supervisory goodwill further
heightened interest in thrift stocks, as the SNL index closed 2.4 percent higher
the day of the ruling. Following the significant run-up recorded through mid-
September, slightly higher interest rates and profit taking nudged thrift prices
lower in late-September.
Lower interest rates and generally favorable third quarter earnings
propelled thrift prices higher during the first half of October 1995, while
credit quality concerns sparked a widespread sell-off in financial stocks during
late October. In particular, the concerns were related to rising consumer
delinquencies, as indicated by a steady rise in the consumer delinquency index
maintained by the American Bankers Association. For the first time since 1991,
the index increased for three consecutive quarters. However, sustained by
acquisition activity and relatively low interest rates, thrift stocks edged
higher during the first half of November. A tax law change in the new
congressional budget, which would provide for the elimination of back taxes on
bad-debt reserves taken before 1988, served to push thrift stocks higher in
late-November, as
<PAGE>
RP Financial, L.C.
Page 4.11
investors speculated that the removal of the potential back taxes would
accelerate the pace of mergers and acquisitions in the thrift industry.
Uncertainty regarding the Federal Reserve's intentions on cutting short-term
interest rates provided for a relatively narrow trading range for thrift stocks
during the first half of December. The rate cut by the Fed and reports of
sluggish retail sales led to a rally in the bond market in late-December, which,
in turn, bolstered prices for thrift and bank issues.
Thrift stocks followed the stock market in general lower in early-
1996, reflecting concern that the absence of a budget agreement would lead to
higher interest rates. The downturn in thrift stocks was brief, as thrift
prices trended higher in the second half of January. Economic data which
indicated that inflation was low supported the recovery in thrift prices, with
the favorable inflation data serving to calm the credit markets amid increasing
expectations that interest rates would remain low. Thrift prices were further
boosted by the Federal Reserve's move to cut short-term interest rates at the
end of January and generally favorable fourth quarter earnings. Mixed
indications on the future direction of interest rates translated into a
relatively narrow trading range for thrift stocks throughout February.
Interest sensitive issues were among the stocks most severely affected
by the sell-off precipitated by the decline in the February 1996 unemployment
rate, as prospects for further near-term rate cuts by the Federal Reserve were
substantially eliminated by the explosive job growth. Thrift prices rebounded
in late-March and early-April as interest rates stabilized. A bullish outlook
on the financial institution sector in general served to further bolster prices
in early-April, as a number of analysts forecasted healthy first quarter
earnings for thrift and bank stocks and that the financial institution sector
would outperform the market in general during the balance of 1996. However,
thrift prices declined following the March employment report, as interest
sensitive stocks were pulled lower by the unfavorable interest rate outlook.
The downturn was abbreviated by the generally strong first quarter earnings
posted by the bank and thrift issues, which provided for a mild upward trend in
thrift stocks in mid-April. Paralleling the stock market in general, thrift
prices dropped sharply in early-May following the rise in interest rates caused
by the strong first quarter GDP growth. Thrift prices rebounded in mid-May, as
interest rates declined slightly on the strength of tame inflation news. At the
end of May and early-June, uncertainty over future interest rate trends provided
for a flat thrift stock market. The SNL Index for all publicly-traded thrifts
closed at 386.3 on June 14, 1996, an increase of 24.7 percent from one year
ago.
<PAGE>
RP Financial, L.C.
Page 4.12
B. The New Issue Market
--------------------
In addition to thrift stock market conditions in general, the new
issue market for converting thrifts is also an important consideration in
determining the Association's pro forma market value. The market for converting
thrifts was favorable throughout most of 1995, as the improving market for
thrift stocks in general translated into stronger demand for converting thrifts
as well. Demand for converting issues remained strong in the first quarter of
1996, with most offerings being oversubscribed and posting healthy increases in
near term aftermarket trading. In general, the market for the most recent
converting issues (offering completed within the past three months) has begun to
show signs of weakness, as indicated by generally weak aftermarket trading
activity exhibited in the stocks of recently converted institutions despite
healthy Subscription and Community Offering takedowns. In comparison to recent
prior quarters, the price appreciation exhibited in the most recent offerings
has been limited, and in a few cases converting thrift issues have traded below
their IPO prices. As shown in Table 4.2, the median one week change in price
for offerings completed during the latest three months equaled positive 6.9
percent.
In examining the current pricing characteristics of institutions
completing their conversions during the last three months (see Table 4.3), we
note there exists a considerable difference in pricing ratios compared to the
universe of all publicly-traded thrifts. Specifically, the current average P/B
ratio of the conversions completed in the most recent three month period of
76.64 percent reflects a discount of 27.0 percent from the average P/B ratio of
all publicly-traded SAIF-insured thrifts (equal to 104.98 percent), and the
average core P/E ratio of 17.66 times reflects a premium of 16.6 percent from
the all SAIF-insured public average core P/E ratio of 15.14 times. The pricing
ratios of the better capitalized but lower earning recently converted thrifts
suggest that the investment community has determined to discount their stocks on
a book basis until the earnings improve through redeployment and leveraging of
the proceeds over the longer term.
In determining our valuation adjustment for marketing of the issue, we
considered trends in both the overall thrift market and the new issue market.
The overall market for thrift stocks is considered to be healthy, as thrift
stocks have traded in a relatively narrow range and are currently exhibiting
pricing ratios that are at historically high levels. Investor interest in the
new issue market has generally been strong, as indicated by strong takedowns in
recent Subscription and Community Offerings; however, fairly limited price
appreciation exhibited in post-conversion trading by recent conversions in
general may indicate a less robust market for forthcoming issues of converting
thrifts.
Also considered in the appraisal was the conversion pricing and after-
market performance of other recent standard conversions in the Midwest,
including those in Missouri. The table on the following page shows the closing
prices after the first day of trading and current pricing ratios for the most
recent conversions
<PAGE>
RP Financial, LC.
----------------------------------------------------------
Table 4.2
Recent Conversions (Last Three Months)
Conversion Pricing Characteristics: Sorted Chronologically
----------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Information Pre-Conversion Data Offering
--------------------------------------
Financial Info. Asset Quality Informative
---------------------
Conversion Equity/ NP Av/ Res. Gross % of Exp
Institution State Date Ticker Assets Assets Assets Cov. Proc. Mid. Proc.
- ----------- ----- ---- ------ ------ ------ ------ ---- ----- ---- -----
($Mil) (%) (%)(2) (%) ($Mil) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CNS Bancorp MO * 06/12/96 CNSB $87 10.66% 0.19% 189% $16.5 132% 3.3%
Westwood Financial Corp.(7) NJ 06/07/96 WWFC 85 7.05% 0.00% NM 3.9 99% 9.9%
Lexington B&L Fin. Corp. MO * 06/06/96 LXMO 51 14.66% 1.88% 21% 12.7 115% 4.2%
First Fed. Fin. Bancorp OH 06/04/96 FFFB 53 9.58% 0.08% 626% 6.7 103% 6.3%
First Fed. Bancshares AR 05/03/96 FFBH 454 7.77% 0.13% 201% 51.5 94% 2.7%
Citizens First Fin. Corp. IL 05/01/96 CBK 229 6.79% 0.33% 55% 28.2 123% 3.6%
North Cincinnati SB(1) OH 05/01/96 P. Sheet 56 4.74% 0.03% 268% 4.0 132% 6.9%
Reliance Bancshares WI * 04/19/96 RELI 32 31.16% 0.00% NM 20.5 132% 2.9%
Catskill Financial Corp. NY 04/18/96 CATB 231 12.75% 0.70% 112% 56.7 132% 3.3%
Yonkers Financial Corp. NY * 04/18/96 YFCB 210 7.72% 1.73% 23% 35.7 132% 2.7%
Green Street Financial Corp. NC 04/04/96 GSFC 151 14.97% 0.19% 76% 43.0 132% 2.9%
FFD Financial Corp. OH 04/02/96 FFDF 61 13.25% 0.16% 150% 14.5 132% 2.4%
Patapsco Bancorp MD 04/02/96 P. Sheet 75 7.95% 0.60% 48% 7.3 91% 8.6%
AMB Financial Corp. IN 04/01/96 AMFC 70 9.05% 0.53% 96% 11.2 132% 5.5%
First Bergen Bancorp NJ 04/01/96 FBER 225 6.52% 3.26% 88% 31.7 132% 3.0%
Heritage Financial Corp. IN 04/01/96 P. Sheet 14 27.53% 0.00% NM 4.9 99% 9.3%
Jacksonville Bancorp(7) TX 04/01/96 JXVL 198 10.47% 1.41% 36% 16.2 106% 4.4%
London Financial Corp. OH 04/01/96 LONF 35 9.45% 0.13% 416% 5.3 132% 6.9%
Pittsb. Home Fin. Corp.(1) PA * 04/01/96 PHFC 162 6.89% 1.36% 42% 21.8 132% 3.3%
Scotland Bancorp(1) NC * 04/01/96 SSB 58 15.36% 0.00% NM 18.4 115% 5.0%
Stone Street Bancorp(1) NC 04/01/96 SSM 88 14.33% 0.00% NM 27.4 132% 3.7%
WHG Bancshares MD 04/01/96 WHGB 85 10.14% 0.23% 77% 16.2 132% 3.5%
PFF Bancorp, Inc. CA * 03/29/96 PFFB 1,925 5.75% 1.70% 54% 198.4 132% 2.2%
Crazy Woman Creek Bncrp WY * 03/29/96 CRZY 38 15.80% 0.21% 349% 10.6 132% 3.9%
Falmouth Co-Op. Bank(1) MA 03/28/96 FCB 74 11.78% 0.00% NM 14.5 132% 4.5%
Community Federal Bancorp MS 03/26/96 CFTP 168 14.59% 0.39% 86% 46.3 132% 2.5%
GA Financial, Inc. PA 03/26/96 GAF 521 9.25% 0.28% 56% 89.0 132% 2.4%
North Central Bancshares(7) IA 03/21/96 FFFD 180 16.47% 0.17% 562% 26.3 106% 3.5%
Averages: $200 11.87% 0.56% 162% 30.0 123% 4.4%
Medians: 86 10.31% 0.20% 87% 17.5 132% 3.6%
Averages, Excluding 2nd Steps $206 11.94% 0.56% 152% $31.7 125% 4.2%
Medians, Excluding 2nd Steps 85 10.14% 0.21% 87% 18.4 132% 3.5%
<CAPTION>
Insider Purchases Pro Forma Data
------------------------------------
Pricing Ratios(4)
------------------- ------------------------------------
Benefit Plans
-------------
Conversion Recog. Mgmt.
Institution State Date Ticker ESOP Plans & Din F/TB P/E P/A
- ----------- ----- ---- ------ ------------- ------ ---- ---- ----
(%) (%) (%)(3) (%) (*) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CNS Bancorp MO * 06/12/96 CNSB 8.0% 4.0% 8.0% 71.1% 22.3 16.4%
Westwood Financial Corp.(7) NJ 06/07/96 WWFC 0.0% 0.0% 2.5% 80.0% 10.1 7.3%
Lexington B&L Fin. Corp. MO * 06/06/96 LXMO 8.0% 4.0% 4.3% 70.1% 16.2 20.6%
First Fed. Fin. Bancorp OH 06/04/96 FFFB 8.0% 4.0% 13.4% 63.6% 17.4 11.5%
First Fed. Bancshares AR 05/03/96 FFBH 8.0% 4.0% 2.6% 65.0% 10.4 10.3%
Citizens First Fin. Corp. IL 05/01/96 CBK 8.0% 4.0% 6.5% 71.7% 17.8 11.2%
North Cincinnati SB(1) OH 05/01/96 P. Sheet 6.0% 0.0% 16.1% 65.0% NM 6.7%
Reliance Bancshares WI * 04/19/96 RELI 4.0% 4.0% 9.5% 72.3% 27.3 40.7%
Catskill Financial Corp. NY 04/18/96 CATB 8.0% 4.0% 2.6% 73.2% 21.2 20.4%
Yonkers Financial Corp. NY * 04/18/96 YFCB 8.0% 4.0% 3.7% 76.5% 16.6 14.8%
Green Street Financial Corp. NC 04/04/96 GSFC 8.0% 4.0% 3.4% 72.6% 16.2 22.9%
FFD Financial Corp. OH 04/02/96 FFDF 8.0% 4.0% 5.4% 71.0% 19.1 19.9%
Patapsco Bancorp MD 04/02/96 P. Sheet 8.0% 4.0% 7.4% 61.7% NM 8.9%
AMB Financial Corp. IN 04/01/96 AMFC 8.0% 4.0% 5.8% 72.1% 19.5 14.2%
First Bergen Bancorp NJ 04/01/96 FBER 8.0% 4.0% 2.4% 76.2% 29.5 12.6%
Heritage Financial Corp. IN 04/01/96 P. Sheet 8.0% 0.0% 13.2% 62.9% NM 27.2%
Jacksonville Bancorp(7) TX 04/01/96 JXVL 8.0% 4.0% 2.0% 77.7% 14.9 12.6%
London Financial Corp. OH 04/01/96 LONF 8.0% 4.0% 26.5% 70.0% 31.6 13.6%
Pittsb. Home Fin. Corp.(1) PA * 04/01/96 PHFC 8.0% 4.0% 7.5% 73.6% 18.5 12.1%
Scotland Bancorp(1) NC * 04/01/96 SSB 8.0% 4.0% 6.9% 76.3% 18.1 25.2%
Stone Street Bancorp(1) NC 04/01/96 SSM 8.0% 4.0% 7.3% 76.8% 18.4 24.7%
WHG Bancshares MD 04/01/96 WHGB 8.0% 4.0% 9.3% 72.8% 17.3 16.5%
PFF Bancorp, Inc. CA * 03/29/96 PFFB 8.0% 4.0% 0.9% 71.5% 25.4 9.5%
Crazy Woman Creek Bncrp WY * 03/29/96 CRZY 6.0% 4.0% 5.5% 70.2% 18.1 22.5%
Falmouth Co-Op. Bank(1) MA 03/28/96 FCB 8.0% 0.0% 8.4% 67.8% 20.2 16.6%
Community Federal Bancorp MS 03/26/96 CFTP 8.0% 4.0% 6.7% 72.2% 15.5 22.3%
GA Financial, Inc. PA 03/26/96 GAF 8.0% 4.0% 1.7% 71.5% 15.7 14.9%
North Central Bancshares(7) IA 03/21/96 FFFD 3.2% 0.0% 0.5% 74.2% 12.1 19.7%
Averages: 7.3% 3.3% 6.8% 71.4% 18.8 17.0%
Meridians: 8.0% 4.0% 6.1% 71.9% 18.1 15.7%
Averages, Excluding 2nd Steps 7.7% 3.5% 7.4% 70.7% 19.6 17.4%
Medians, Excluding 2nd Steps 8.0% 4.0% 6.7% 71.5% 18.2 16.4%
<CAPTION>
Fin. Characteristics
-------------------------
First
Conversion IPO Trading %
Institution State Date Ticker ROA TE/A ROE Price Day Chg.
- ----------- ----- ---- ------ --- ---- --- ----- --- ----
(%) (%) (%) ($) ($) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CNS Bancorp MO * 06/12/96 CNSB 0.7% 23.1% 3.2% $10.00 $11.00 10.0%
Westwood Financial Corp.(7) NJ 06/07/96 WWFC 0.7% 9.2% 7.9% 10.00 10.75 7.5%
Lexington B&L Fin. Corp. MO * 06/06/96 LXMO 1.3% 29.4% 4.3% 10.00 9.50 -5.0%
First Fed. Fin. Bancorp OH 06/04/96 FFFB 0.7% 18.0% 3.7% 10.00 10.75 7.5%
First Fed. Bancshares AR 05/03/96 FFBH 1.0% 15.9% 6.3% 10.00 13.00 30.0%
Citizens First Fin. Corp. IL 05/01/96 CBK 0.6% 15.6% 4.0% 10.00 10.50 5.0%
North Cincinnati SB(1) OH 05/01/96 P. Sheet NM 10.3% NM 10.00 NT NA
Reliance Bancshares WI * 04/19/96 RELI 1.5% 56.2% 2.7% 8.00 8.38 4.7%
Catskill Financial Corp. NY 04/18/96 CATB 1.0% 27.8% 3.5% 10.00 10.38 3.8%
Yonkers Financial Corp. NY * 04/18/96 YFCB 0.9% 19.4% 4.6% 10.00 9.75 3.8%
Green Street Financial Corp. NC 04/04/96 GSFC 1.4% 31.5% 4.5% 10.00 12.75 -2.5%
FFD Financial Corp. OH 04/02/96 FFDF 1.0% 28.0% 3.7% 10.00 10.50 27.5%
Patapsco Bancorp MD 04/02/96 P. Sheet NM 14.5% NM 10.00 NT 5.0%
AMB Financial Corp. IN 04/01/96 AMFC 0.7% 19.7% 3.7% 10.00 10.50 NA
First Bergen Bancorp NJ 04/01/96 FBER 0.4% 16.5% 2.6% 10.00 10.00 5.0%
Heritage Financial Corp. IN 04/01/96 P. Sheet 0.6% 43.2% 1.3% 10.00 NT 0.0%
Jacksonville Bancorp(7) TX 04/01/96 JXVL 0.8% 16.2% 5.2% 10.00 9.75 NA
London Financial Corp. OH 04/01/96 LONF 0.4% 19.4% 2.2% 10.00 10.81 -2.5%
Pittsb. Home Fin. Corp.(1) PA * 04/01/96 PHFC 0.7% 16.4% 4.0% 10.00 11.00 8.1%
Scotland Bancorp(1) NC * 04/01/96 SSB 1.4% 33.1% 4.2% 10.00 12.25 10.0%
Stone Street Bancorp(1) NC 04/01/96 SSM 1.3% 32.2% 4.2% 15.00 17.50 22.5%
WHG Bancshares MD 04/01/96 WHGB 1.0% 22.7% 4.2% 10.00 11.13 16.7%
PFF Bancorp, Inc. CA * 03/29/96 PFFB 0.4% 13.2% 2.8% 10.00 11.38 11.2%
Crazy Woman Creek Bncrp WY * 03/29/96 CRZY 1.2% 32.1% 3.9% 10.00 10.38 3.8%
Falmouth Co-Op. Bank(1) MA 03/28/96 FCB 0.8% 24.4% 3.4% 10.00 10.75 7.5%
Community Federal Bancorp MS 03/26/96 CFTP 1.4% 30.9% 4.7% 10.00 12.63 26.3%
GA Financial, Inc. PA 03/26/96 GAF 1.0% 20.8% 4.6% 10.00 11.38 13.8%
North Central Bancshares(7) IA 03/21/96 FFFD 1.6% 26.5% 6.1% 10.00 10.88 8.7%
Averages: 0.9% 23.8% 4.1% $10.11 $11.10 9.5%
Medians: 0.9% 21.7% 4.0% 10.00 10.75 7.5%
Averages, Excluding 2nd Steps 0.9% 24.6% 3.7% $10.12 $11.19 10.2%
Medians, Excluding 2nd Steps 1.0% 22.7% 3.9% 10.00 10.78 7.8%
<CAPTION>
Post-HPO Pricing Trends
--------------------------------------------------------
Closing Price:
--------------------------------------------------------
After After
First % First %
Institution State Date Ticker Week (3) Chg. Month(6) Chg.
----------- ----- ---- ------ -------- ---- -------- --------
($) (%) ($) (%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
CNS Bancorp MO * 06/12/96 CNSB $12.00 20.0% NA NA
Westwood Financial Corp.(7) NJ 06/07/96 WWFC 10.38 3.8% NA NA
Lexington B&L Fin. Corp. MO * 06/06/96 LXMO 9.75 -2.5% $10.00 0.0%
First Fed. Fin. Bancorp OH 06/04/96 FFFB 10.62 6.2% 10.75 7.5%
First Fed. Banshares AR 05/03/96 FFBH 13.38 33.8% 13.63 36.3%
Citizens First Fin. Corp. IL 05/01/96 CBK 10.00 0.0% 10.13 1.3%
North Cincinnati SB(1) OH 05/01/96 P. Sheet NT NA NT NA
Reliance Bamcshares WI 04/19/96 RELI 8.25 3.1% 7.94 -0.7%
Catskill Financial Corp. NY 04/18/96 CATB 10.50 5.0% 10.38 3.8%
Yonkers Financial Corp. NY * 04/18/96 YFCB 10.00 0.0% 9.94 -0.6%
FFD Financial Corp. OH 04/02/96 PFDF 12.25 22.5% 12.31 23.1%
Green Street Financial Corp. NC 04/04/96 GSFC 10.13 1.3% 10.50 5.0%
Patapsco Bancorp MD 04/02/96 P. Sheet NT NA NT NA
AMB Financial Corp. IN 04/01/96 AMFC 10.50 5.0% 10.5 5.0%
First Bergen Bancorp NJ 04/01/96 FBER 9.50 -5.0% 9.63 -3.8%
Heritage Financial Corp. IN 04/01/96 P. Sheet NT NA NT NA
Jacksonville Bancorp(7) TX 04/01/96 JXVL 9.63 -3.8% 9.88 -1.2%
London Financial Corp. OH 04/01/96 LONF 10.63 6.3% 10.13 1.3%
Pittsb. Home Fin. Corp.(1) PA * 04/01/96 PHFC 11.00 10.0% 10.62 6.2%
Scotland Bancorp(1) NC * 04/01/96 SSB 12.50 25.0% 11.75 17.5%
Stone Street Bancorp(1) NC 04/01/96 SSM 18.00 20.0% 17.75 18.3%
WHG Bancshares MD 04/01/96 WHGB 11.44 14.4% 11.38 13.8%
PFF Bancorp, Inc. CA * 03/29/96 PFFB 11.62 16.2% 11.63 16.3%
Crazy Woman Creek Bncrp WY * 03/29/96 CRZY 10.75 7.5% 10.50 5.0%
Falmouth Co-Op. Bank(1) MA 03/28/96 FCB 11.25 12.5% 10.75 7.5%
Community Federal Bancorp MS 03/26/96 CFTP 13.13 31.3% 12.62 26.2%
GA Financial, Inc. PA 03/26/96 GAF 11.50 15.0% 11.00 10.0%
North Central Bancshares(7) IA 03/21/96 FFFD 10.69 6.9% 10.44 4.4%
Averages: $11.17 10.2% $11.05 8.8%
Medians: 10.69 6.9% 10.50 5.0%
Averages Excluding 2nd Steps $11.30 11.2% $11.13 9.5%
Meridians, Excluding 2nd Steps 10.88 8.8% 10.62 6.2%
</TABLE>
Note: * - Appraisal performed by RP Financial; "NT" - Not Traded; "NA" - Not
Applicable, Not Available.
(1) Non-OTS regulated thrifts.
(2) As reported in summary pages of prospectus.
(3) As reported in prospectus.
(4) Does not take into account the adoption of SOP 93-6.
(5) Latest price if offering less than one week old.
(6) Latest price if offering more than one week but less than one month old.
(7) Second-step conversions.
- --------------------------------------------------------------------------------
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.3
Market Pricing Comparatives
Prices As of June 14, 1996
<TABLE>
<CAPTION>
Per Share Data
Market ---------------
Capitalization Book Pricing Ratios(3)
--------------- ---------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 17.21 119.16 1.25 16.52 14.29 104.98 13.13 108.21 15.14
Special Selection Grouping(8) 11.04 38.13 0.48 14.39 17.41 76.64 18.95 77.16 17.66
State of MO 16.68 78.87 1.12 15.60 16.68 108.93 16.23 111.86 16.62
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
AMFC AMB Financial Corp. of IN 10.12 11.37 0.31 14.37 NM 70.42 14.12 70.42 NM
CNSB CNS Bancorp of MO 12.00 19.84 0.45 14.07 NM 85.29 19.68 85.29 NM
CATB Catskill Fin. Corp. of NY 10.19 57.95 0.47 13.65 21.68 74.65 20.75 74.65 18.87
CBK Citizens First Fin.Corp. of IL 9.87 27.81 0.56 13.95 17.63 70.75 11.02 70.75 16.18
CFTP Community Fed. Bancorp of MS 13.62 63.05 0.43 14.34 NM 94.98 31.44 94.98 NM
CRZY Crazy Woman Creek Bncorp of WY 10.25 10.84 0.34 14.67 NM 69.87 22.85 69.87 NM
FFDF FFD Financial Corp. of OH 10.19 14.83 0.52 14.08 19.60 72.37 20.28 72.37 19.60
FCB Falmouth Co-Op Bank of MA 10.25 14.91 0.25 14.84 NM 69.07 16.96 69.07 NM
FBER First Bergen Bancorp of NJ 9.31 29.55 0.20 13.46 NM 69.17 11.43 69.17 NM
FFBH First Fed. Bancshares of AR 13.75 70.87 0.96 15.38 14.32 89.40 14.22 89.40 14.32
FFFB First Fed. Fin. Bancorp of OH 10.75 7.22 0.58 15.73 18.53 68.34 12.34 68.34 18.53
GAF GA Financial Corp. of PA 11.00 97.90 0.33 14.34 NM 76.71 17.21 76.71 25.00
GSFC Green Street Fin. Corp. of NC 12.87 55.32 0.62 13.78 20.76 93.40 29.44 93.40 20.76
JXVL Jacksonville Bancorp of TX 10.62 28.27 0.59 13.37 18.00 79.43 13.27 79.43 18.00
LXMO Lexington B&L Fin. Corp. of MO 10.00 12.65 0.62 14.27 16.13 70.08 20.62 70.08 16.39
LONF London Financial Corp. of OH 10.50 5.55 0.37 14.81 NM 70.90 14.79 70.90 NM
FFFD North Central Bancshares of IA 11.00 44.12 0.65 13.72 16.92 80.17 23.15 80.17 18.03
PFFB PFF Bancorp of Pomona CA 11.44 226.94 0.10 14.57 NM 78.52 11.30 79.44 NM
PHFC Pittsburgh Home Fin. of PA 10.37 22.63 0.54 13.58 19.20 76.36 12.55 76.36 19.20
RELI Reliance Bancshares Inc of WI 7.87 20.16 0.29 11.06 NM 71.16 40.01 71.16 NM
SSB Scotland Bancorp of NC 12.37 22.76 0.38 14.38 NM 86.02 32.32 86.02 NM
SSM Stone Street Bancorp of NC 16.87 30.79 0.43 21.43 NM 78.72 26.52 78.72 NM
WHGB WHG Bancshares of MD 11.00 17.82 0.36 14.20 NM 77.46 15.95 77.46 NM
WWFC Westwood Fin. Corp. of NJ 10.38 6.72 0.99 14.61 10.48 71.05 7.61 82.97 10.48
YFCB Yonkers Fin. Corp. of NY 9.38 33.50 0.60 13.07 15.63 71.77 13.92 71.77 14.21
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Amount/ Payout Total Equity/ NPAs/ Reported Core
---------------- --------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
- --------------------- -------- ------ ------- ------ ------- ------- ------- ------- ------- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 0.35 1.98 25.53 1,297 13.25 0.95 0.87 8.08 0.81 7.29
Special Selection Grouping(8) 0.06 0.48 2.77 243 24.57 0.77 0.83 4.37 0.84 4.47
State of MO 0.40 2.46 23.72 784 16.72 0.75 0.97 7.45 0.92 7.32
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
AMFC AMB Financial Corp. of IN 0.00 0.00 0.00 81 20.06 0.71 0.49 4.30 0.49 4.30
CNSB CNS Bancorp of MO 0.00 0.00 0.00 101 23.07 0.70 0.74 3.20 0.62 2.70
CATB Catskill Fin. Corp. of NY 0.00 0.00 0.00 279 27.79 NA 0.96 3.44 1.10 3.96
CBK Citizens First Fin.Corp. of IL 0.00 0.00 0.00 252 15.57 NA 0.63 4.01 0.68 4.37
CFTP Community Fed. Bancorp of MS 0.00 0.00 0.00 201 33.10 0.34 1.17 6.28 1.14 6.13
CRZY Crazy Woman Creek Bncorp of WY 0.00 0.00 0.00 47 32.70 0.70 0.92 4.63 0.78 3.95
FFDF FFD Financial Corp. of OH 0.00 0.00 0.00 73 28.03 NA 1.04 3.69 1.04 3.69
FCB Falmouth Co-Op Bank of MA 0.00 0.00 0.00 88 24.56 NA 0.45 2.40 0.47 2.50
FBER First Bergen Bancorp of NJ 0.00 0.00 0.00 259 16.52 2.49 0.28 3.06 0.42 4.59
FFBH First Fed. Bancshares of AR 0.00 0.00 0.00 498 15.90 0.09 0.99 6.24 0.99 6.24
FFFB First Fed. Fin. Bancorp of OH 0.00 0.00 0.00 59 18.05 0.09 0.67 3.69 0.67 3.69
GAF GA Financial Corp. of PA 0.00 0.00 0.00 569 22.44 0.19 0.58 4.73 0.78 6.30
GSFC Green Street Fin. Corp. of NC 0.00 0.00 0.00 188 31.53 0.16 1.42 4.50 1.42 4.50
JXVL Jacksonville Bancorp of TX 0.50 4.71 NM 213 16.70 0.86 0.79 6.76 0.79 6.76
LXMO Lexington B&L Fin. Corp. of MO 0.00 0.00 0.00 61 29.42 1.15 1.28 4.34 1.26 4.27
LONF London Financial Corp. of OH 0.00 0.00 0.00 38 20.86 0.21 0.57 4.73 0.57 4.73
FFFD North Central Bancshares of IA 0.25 2.27 38.46 191 28.87 0.13 1.48 7.67 1.39 7.19
PFFB PFF Bancorp of Pomona CA 0.00 0.00 0.00 2,008 14.39 2.29 0.10 1.37 0.10 1.37
PHFC Pittsburgh Home Fin. of PA 0.00 0.00 0.00 180 16.43 1.53 0.65 3.98 0.65 3.98
RELI Reliance Bancshares Inc of WI 0.00 0.00 0.00 50 56.23 NA 1.47 2.62 1.47 2.62
SSB Scotland Bancorp of NC 0.00 0.00 0.00 70 37.58 NA 1.09 3.96 1.09 3.96
SSM Stone Street Bancorp of NC 0.44 2.61 NM 116 33.68 0.31 0.77 3.04 0.77 3.04
WHGB WHG Bancshares of MD 0.00 0.00 0.00 112 20.59 0.35 0.64 5.18 0.64 5.18
WWFC Westwood Fin. Corp. of NJ 0.25 2.41 25.25 88 10.71 NA 0.73 6.78 0.73 6.78
YFCB Yonkers Fin. Corp. of NY 0.00 0.00 0.00 241 19.39 1.63 0.89 4.59 0.98 5.05
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/CORE = Price to estimated core earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month earnings and average equity and assets balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
(8) Includes Converted Last 3 Mths (no MHC);
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, Inc.
<PAGE>
RP Financial, LC.
Page 4.15
in the Midwest. The trends indicate that after-market interest in new
conversions has fallen off somewhat from levels recorded earlier in the year and
last year, which has reduced the pricing ratios for new issues. We have not
adjusted the Bank's "marketing of the issue" valuation parameter downward to
reflect the weakness in the new issue market. Instead, we have emphasized the
pricing of recent conversions, both at conversion and in the after-market, in
the determination of the Bank's valuation.
Pricing Characteristics of Recent
Midwestern U.S. Conversions
<TABLE>
<CAPTION>
% Change in Price
------------------
Conversion Pro Forma P/B 1st To Current
Date @ Conversion Week 6/14/96 P/B
----- ------------- ------------------------
<S> <C> <C> <C>
CNS Bancorp-MO(1) 6/96 71.1% 20.0% 20.0% 85.29%
Lexington B&L Financial Corp.-MO 6/96 70.1 (2.5) 0.0 70.08
First Fed. Financial Bancorp-OH 6/96 63.6 6.2 7.5 68.34
Citizens First Fin. Corp.-IL 5/96 71.7 0.0 (1.3) 70.75
Reliance Bancshares-WI 4/96 72.3 3.1 (1.6) 71.16
FFD Fin. Corp.-OH 4/96 71.0 1.3 1.9 72.37
AMB Fin. Corp.-IN 4/96 72.1 5.0 1.2 70.42
London Fin. Corp.-OH 4/96 70.0 6.3 5.0 70.90
</TABLE>
(1) CNS Bancorp converted on June 12, 1996. First week pricing reflects
current pricing.
C. The Acquisition Market
----------------------
Also considered in the valuation was the potential pricing impact of
recently completed and pending acquisitions of other thrifts operating in the
Bank's market area. As shown in Exhibit IV-4, there have been six completed or
announced acquisitions of thrift institutions in Missouri since the beginning of
1995. The Bank's relatively high pro forma capital position may tend to reduce
acquisition speculation in the Bank's stock based on expectations that an
acquiror would be reluctant to pay an acquisition premium for the Bank's excess
capital. However, at the same, the fairly active acquisition market for
Missouri institutions and institutions in other nearby states may imply a
certain degree of acquisition speculation for the Bank's stock. To the extent
that acquisition speculation may impact the Bank's offering, we have largely
taken this into account in selecting Missouri and other Midwest companies, which
operate in markets that have experienced comparable or greater degree of thrift
acquisition activity than the markets served by the Bank.
* * * * * * * * * * *
<PAGE>
RP Financial, L.C.
Page 4.16
Taking these factors and trends into account, primarily recent trends in
the new issue market and market conditions overall, RP Financial concluded that
no adjustment was warranted for purposes of marketing of the issue.
8. Management
----------
The Bank's management team appears to have experience and expertise in all
of the key areas of the Bank's operations. Exhibit IV-5 provides summary resumes
of the Bank's Board of Directors and executive management. Healthy core
profitability, a strong capital position, and low credit risk exposure indicate
that the Bank is being effectively managed. The Bank has no apparent senior
management vacancies and there appears to be a well-defined organizational
structure, separation of functions, and an active Board which oversees and
advises on all key strategic and policy decisions.
Similarly, the returns, capital positions, and other operating measures of
the Peer Group companies are indicative of well-managed financial institutions,
which have Boards and management teams that have been effective in implementing
conservative and competitive operating strategies. On balance, we concluded that
no valuation adjustment relative to the Peer Group was appropriate for this
factor.
9. Effect of Government Regulation and Regulatory Reform
-----------------------------------------------------
There have been two recent developments in the thrift industry which may
have an effect on the pricing of thrifts: (1) the recent discussions by
legislators regarding the recapitalizing of the SAIF through a special
assessment coupled with possible lower future annual deposit premiums; and, (2)
the possibility that back taxes on bad debt reserves taken before 1988 may be
required to be recaptured. Since the Bank and all of the Peer Group members are
SAIF-insured, we believe the effect of these discussions on the Bank's pro forma
pricing has been implicitly accounted for in the pricing ratios of the Peer
Group. In summary, as a fully converted SAIF-insured savings institution, the
Bank will operate in substantially the same regulatory environment as the Peer
Group members -- all of whom are adequately capitalized institutions and are
operating with no apparent restrictions. Exhibit IV-6 reflects the Bank's pro
forma regulatory capital ratios. RP Financial concluded that the Bank's
flexibility of operations are neither materially restricted nor enhanced by its
current regulatory status versus the Peer Group and no adjustment was made for
this factor.
<PAGE>
RP Financial, LC.
Page 4.17
Summary of Adjustments
- ----------------------
Overall, we believe the Bank's pro forma market value should be discounted
relative to the Peer Group as follows:
<TABLE>
<CAPTION>
Key Valuation Parameters: Valuation Adjustment
------------------------ --------------------
<S> <C>
Financial Condition Moderate Downward
Profitability, Growth and Viability of Earnings Moderate Downward
Asset Growth No Adjustment
Primary Market Area Slight Upward
Dividends Slight Downward
Liquidity of the Shares Slight Downward
Marketing of the Issue No Adjustment
Management No Adjustment
Effect of Government Regulations and Regulatory Reform No Adjustment
</TABLE>
Valuation Approaches
- --------------------
In applying the accepted valuation methodology promulgated by the OTS and
adopted by the FDIC, i.e., the pro forma market value approach, we considered
the three key pricing ratios in valuing the Bank's to-be-issued stock --
price/earnings ("P/E"), price/book ("P/B"), and price/assets ("P/A") -- all
performed on a pro forma basis including the effects of the conversion proceeds.
In computing the pro forma impact of the conversion and the related pricing
ratios, we have incorporated the valuation parameters disclosed in the Bank's
prospectus for offering expenses, the effective tax rate and stock benefit plan
assumptions (summarized in Exhibits IV-7 and IV-8). The prospectus reflects a
reinvestment based on the one year Treasury Bill as of March 31, 1996, equal to
5.38 percent. In our determination of the appropriate reinvestment rate to use
for valuation purposes, we analyzed the T-Bill rate against the average of the
Bank's yield of IEA and cost of deposits at March 31, 1996. We also considered a
blended reinvestment rate based on the intended use of proceeds by the Bank and
the Holding Company as outlined in the business plan, which took into account
stock purchased by existing deposits at the institution. On balance, we
determined that the rate on the one-year T-Bill, which is reflected in the
prospectus, is a reasonable reinvestment rate to use in the valuation. With
regard to the employee stock ownership plan and stock reward plans, we have
performed the valuation assuming the ESOP purchases 8 percent of the shares at
the initial offering prices (10 year amortization) and the RRP acquires 4
percent of the shares in the open market at the $10.00 per share issue price (5
year vesting). we also considered the impact of issuance of RRP shares out of
authorized but unissued shares. In our estimate of value, we assessed the
relationship of the pro forma pricing ratios relative to the Peer Group and the
recent conversions.
<PAGE>
RP Financial, L.C.
Page 4.18
RP Financial's valuation placed an emphasis on the following:
o P/E Approach. The P/E approach is generally the best indicator of
------------
long-term value for a stock. Since the Bank and the Peer Group
reported pro forma profitability, the P/E approach was heavily
considered in this valuation. In applying this approach, we took into
account reported earnings and estimated core earnings.
o P/B Approach. P/B ratios have generally served as a useful
------------
benchmark in the valuation of thrift stocks, with the greater
determinant of long term value being earnings. We have also modified
the P/B approach to exclude the impact of intangible assets (i.e.,
price/tangible book value or "P/TB"). RP Financial considered the P/B
approach to be a reliable indicator of value given current market
conditions, particularly the market for new conversions, which often
exhibit a willingness to pay premium P/E multiples in the expectation
that such institutions will implement leveraging strategies to promote
earnings growth. At the same time, with lower ROE ratios, new
conversions are typically discounted on a book value basis relative to
the market at least until there is partial realization of leveraging
strategies.
o P/A Approach. P/A ratios are generally a less reliable indicator of
------------
market value, as investors do not place exclusive weight simply on the
size of total assets as a determinant of market value. Furthermore,
this approach does not take into account the amount of stock purchases
funded by deposit withdrawals, thus understating the pro forma P/A
ratio. Investors place significantly greater weight on book value and
earnings -- which have received greater weight in our valuation
analysis. At the same time, the P/A ratio is an indicator of
franchise value and, in the case of a highly capitalized institution,
a high P/A ratio limits the investment community's willingness to pay
average market multiples for earnings and book value when ROE is low.
The Bank has adopted Statement of Position ("SOP" 93-6), which will cause
earnings per share computations to be based on shares issued and outstanding
excluding shares owned by an ESOP where there is not a commitment to release
such shares. For the purpose of preparing the pro forma pricing tables and
exhibits, we have reflected all shares issued in the offering including shares
purchased by the ESOP as outstanding to capture the full dilutive impact of such
stock to the Bank's shareholders. However, we have considered the impact of
adoption of SOP 93-6 on the Bank in the determination of the Bank's pro forma
value.
Based on the application of the three valuation approaches, taking into
consideration the valuation adjustments discussed above, and placing the
greatest weight on the P/B and P/E approaches, RP Financial concluded that the
pro forma market value of the Bank's conversion stock is $10,500,000 at the
midpoint at this time.
1. Price-to-Earnings ("P/E"). The application of the P/E valuation
-------------------------
method requires calculating the Bank's pro forma market value by applying a
valuation P/E multiple times the pro forma earnings base. Ideally, the pro forma
earnings base is composed principally of the Bank's core or recurring earnings
base, that is, earnings adjusted to exclude any one-time non-operating items,
plus the estimated after-tax earnings benefit
<PAGE>
RP Financial, LC.
Page 4.19
of the reinvestment of net conversion proceeds. The Bank's reported earnings
were $0.526 million for the twelve months ended March 31, 1996. In deriving core
earnings, our adjustments included deducting the gains on the sales of IEA of
$230,000 ($138,000 on an after-tax basis), and applying a normalized tax rate of
40 percent to the Bank's pre-tax core earnings. Factoring in these adjustments
resulted in core earnings of approximately $0.357 million. (Note: see Exhibit
IV-9 for the similar types of adjustments applied to the Peer Group's earnings
in the calculation of their core earnings).
Based on the Bank's trailing twelve month core earnings, and
incorporating the impact of the pro forma assumptions discussed previously, the
Bank's pro forma core P/E multiple at the $10,500,000 midpoint value was 19.53
times, which was at a premium of 22.1 percent to the Peer Group average of 16.00
times core earnings.
In reaching the valuation conclusion, we also evaluated the Bank's P/E
multiple on the basis of projected earnings growth as reflected in the business
plan (the "Plan").
2. Price-to-Book ("P/B"). The application of the P/B valuation method
---------------------
requires calculating the Bank's pro forma market value by applying a valuation
P/B ratio to the Bank's pro forma book value. Based on the $10.5 million
midpoint valuation, the Bank's pro forma P/B ratio was approximately 63.26
percent. In comparison to the average P/B ratio for the Peer Group of
approximately 89.51 percent, the Bank's valuation reflected a 29.3 percent
discount relative to the Peer Group. RP Financial considered the discount under
this approach to be warranted by the valuation adjustments addressed earlier,
the Bank premium core P/E multiple, and the Bank's lower pro forma core ROE
(3.24 percent versus 6.17 percent for the Peer Group).
Given the emphasis in the revised appraisal guidelines on limiting the
new issue discount, RP Financial also considered conversion closing and the
current pro forma P/B ratios of recent conversions. It is these companies that
perhaps provide the best proxy for aftermarket trading for a new issue such as
the Bank's conversion stock. It is the pro forma P/B ratio that investors have
recently tended to emphasize in evaluating the trading of new issues. The
Bank's pro forma P/B ratios over the valuation range shows slight to no
discounting from the current trading average of recent conversions. This is is
appropriate given the Bank's smaller offering, resulting lower liquidity of the
shares, comparative risk profile and earnings posture.
3. Price-to-Assets ("P/A"). The P/A valuation methodology determines
------------------------
market value by applying a valuation P/A ratio to the Bank's pro forma asset
base, conservatively assuming no deposit withdrawals are made to fund stock
purchases. In all likelihood there will be deposit withdrawals, which results in
understating the pro forma P/A ratio which is computed herein. At the midpoint
of the valuation range, the Bank's value equaled 11.07 percent of pro forma
assets, which was discounted by 27.2 percent from the Peer Group's
<PAGE>
RP Financial, L.C.
Page 4.20
average P/A ratio of 15.20 percent. While generally emphasized less than the P/E
and P/B approaches, the P/A ratio is an indicator of franchise value and, thus,
was a factor in deriving the other pricing ratios. It should be noted that the
level of other pricing ratios are limited by the franchise value ratio measured
by the P/A ratio.
Valuation Conclusion
- --------------------
Based on the foregoing, it is our opinion that, as of June 14 1996, the
aggregate pro forma market value of the Bank and the Holding Company, was
$10,500,000 at the midpoint, equal to 1,050,000 shares offered at a per share
value of $10.00. Pursuant to OTS conversion guidelines, the 15 percent offering
range indicates a minimum value of $8,925,000 and a maximum value of
$12,075,000. Based on the $10.00 per share offering price, this valuation range
equates to an offering of 892,500 shares at the minimum to 1,207,500 shares at
the maximum. In the event that the Bank's appraised value is subject to an
increase, up to 1,388,625 shares may be sold at an issue price of $10.00 per
share, for an aggregate market value of $13,886,250, without a resolicitation.
The comparative pro forma valuation ratios relative to the Peer Group are shown
in Table 4.4, and the key valuation assumptions are detailed in Exhibit IV-7.
The pro forma calculations for the range are detailed in Exhibit IV-8.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.4
Public Market Pricing
Community Bank of MO and the Comparables
As of June 14, 1996
<TABLE>
<CAPTION>
Per Share Data
Market ----------------
Capitalization Book Pricing Ratios(3)
--------------- ---------------------------------------
Price/ Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
------- ------- ------- ------- ------- ------- ------- ------- -------
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Community Bank of MO
- --------------------
Superrange 10.00 13.89 0.55 14.10 18.03 70.93 14.19 70.93 23.10
Range Maximum 10.00 12.08 0.61 14.89 16.40 67.14 12.54 67.14 21.29
Range Midpoint 10.00 10.50 0.67 15.81 14.86 63.26 11.07 63.26 19.53
Range Minimum 10.00 8.93 0.76 17.04 13.19 58.67 9.55 58.67 17.57
SAIF-Insured Thrifts(7)
- -----------------------
Averages 17.21 119.16 1.25 16.52 14.29 104.98 13.13 108.21 15.14
Medians --- --- --- --- 14.29 99.35 11.84 102.42 15.42
All Non-MHC State of MO(7)
- --------------------------
Averages 17.14 88.20 1.18 16.38 16.15 105.46 15.94 108.77 16.26
Medians --- --- --- --- 15.62 88.50 15.70 88.50 16.39
Comparable Group Averages
- --------------------------
Averages 16.19 19.18 1.14 18.10 15.63 89.51 15.20 89.53 16.00
Medians --- --- --- --- 15.06 88.37 15.03 88.37 15.13
State of MO
- -----------
CNSB CNS Bancorp of MO 12.00 19.84 0.45 14.07 NM 85.29 19.68 85.29 NM
CMRN Cameron Fin. Corp. of MO 13.50 38.48 0.97 16.06 13.92 84.06 22.31 84.06 14.06
CAPS Capital Savings Bancorp of MO 18.00 18.70 1.75 20.34 10.29 88.50 9.23 88.50 10.29
FBSI First Bancshares of MO 15.50 20.18 0.80 18.26 19.38 84.88 14.37 85.07 19.62
GSBC Great Southern Bancorp of MO 27.50 121.94 2.48 15.04 11.09 182.85 18.50 185.94 11.80
HFSA Hardin Bancorp of Hardin MO 11.75 12.43 0.48 15.16 24.48 77.51 14.91 77.51 24.48
JSBA Jefferson Svgs Bancorp of MO 26.00 108.73 1.52 19.19 17.11 135.49 9.51 165.39 17.45
JOAC Joachim Bancorp of MO 12.25 9.31 0.28 14.15 NM 86.57 25.32 86.57 NM
LXMO Lexington B&L Fin. Corp. of MO 10.00 12.65 0.62 14.27 16.13 70.08 20.62 70.08 16.39
MBLF MBLA Financial Corp. of MO(7) 24.00 32.93 1.00 20.67 24.00 116.11 16.88 116.11 24.00
MFSB Mutual Bancompany of MO(7) 21.37 7.12 0.34 18.73 NM 114.10 13.35 114.10 NM
NSLB NS&L Bancorp of Neosho MO 12.87 11.43 0.59 15.62 21.81 82.39 19.35 82.39 23.40
NASB North American SB of MO 30.50 69.42 3.74 21.44 8.16 142.26 10.45 148.20 8.54
PCBC Perry Co. Fin. Corp. of MO 17.50 14.98 0.88 19.84 19.89 92.89 19.38 92.89 19.89
RFED Roosevelt Fin. Grp. Inc. of MO 19.25 810.77 1.35 10.54 14.26 182.64 8.88 193.27 10.52
SMFC Sho-Me Fin. Corp. of MO 15.75 28.68 1.08 17.36 14.58 90.73 10.87 90.73 14.72
SMBC Southern Missouri Bncrp of MO 14.75 25.43 0.78 15.41 18.91 95.72 15.70 95.72 20.21
Comparable Group
- ----------------
CMRN Cameron Fin. Corp. of MO 13.50 38.48 0.97 16.06 13.92 84.06 22.31 84.06 14.06
CAPS Capital Savings Bancorp of MO 18.00 18.70 1.75 20.34 10.29 88.50 9.23 88.50 10.29
FBSI First Bancshares of MO 15.50 20.18 0.80 18.26 19.38 84.88 14.37 85.07 19.62
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ --------------- --------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Community Bank of MO
- --------------------
Superrange 0.00 0.00 0.00 98 20.01 0.33 0.79 3.93 0.61 3.07
Range Maximum 0.00 0.00 0.00 96 18.68 0.34 0.76 4.09 0.59 3.15
Range Midpoint 0.00 0.00 0.00 95 17.49 0.34 0.74 4.26 0.57 3.24
Range Minimum 0.00 0.00 0.00 93 16.27 0.35 0.72 4.45 0.54 3.34
SAIF-Insured Thrifts(7)
- -----------------------
Averages 0.35 1.98 25.53 1,297 13.25 0.95 0.87 8.08 0.81 7.29
Medians --- --- --- --- --- --- --- --- --- ---
All Non-MHC State of MO(7)
- ---------------------------
Averages 0.35 2.06 23.72 864 17.13 0.81 0.97 7.50 0.95 7.60
Medians --- --- --- --- --- --- --- --- --- ---
Comparable Group Averages
- -------------------------
Averages 0.32 2.06 27.90 133 17.14 0.57 1.04 6.27 1.02 6.17
Medians --- --- --- --- --- --- --- --- --- ---
State of MO
- -----------
CNSB CNS Bancorp of MO 0.00 0.00 0.00 101 23.07 0.70 0.74 3.20 0.62 2.70
CMRN Cameron Fin. Corp. of MO 0.28 2.07 28.87 172 26.54 0.79 1.61 5.79 1.59 5.73
CAPS Capital Savings Bancorp of MO 0.36 2.00 20.57 203 10.43 0.20 0.95 8.92 0.95 8.92
FBSI First Bancshares of MO 0.20 1.29 25.00 140 16.92 0.43 0.78 4.33 0.77 4.27
GSBC Great Southern Bancorp of MO 0.70 2.55 28.23 659 10.12 2.03 1.72 17.10 1.62 16.07
HFSA Hardin Bancorp of Hardin MO 0.40 3.40 NM 83 19.24 0.11 0.64 4.18 0.64 4.18
JSBA Jefferson Svgs Bancorp of MO 0.32 1.23 21.05 1,143 7.02 0.97 0.60 8.20 0.59 8.04
JOAC Joachim Bancorp of MO 0.50 4.08 NM 37 29.24 0.01 0.65 3.14 0.65 3.14
LXMO Lexington B&L Fin. Corp. of MO 0.00 0.00 0.00 61 29.42 1.15 1.28 4.34 1.26 4.27
MBLF MBLA Financial Corp. of MO(7) 0.40 1.67 40.00 195 14.54 0.33 0.70 4.81 0.70 4.81
MFSB Mutual Bancompany of MO(7) 0.00 0.00 0.00 53 11.70 NA 0.20 1.83 0.23 2.10
NSLB NS&L Bancorp of Neosho MO 0.50 3.89 NM 59 23.49 0.18 0.93 4.27 0.87 3.98
NASB North American SB of MO 0.63 2.07 16.84 664 7.35 3.36 1.33 18.45 1.27 17.61
PCBC Perry Co. Fin. Corp. of MO 0.30 1.71 34.09 77 20.86 0.04 1.00 5.36 1.00 5.36
RFED Roosevelt Fin. Grp. Inc. of MO 0.62 3.22 45.93 9,135 4.86 0.40 0.63 13.98 0.85 18.94
SMFC Sho-Me Fin. Corp. of MO 0.00 0.00 0.00 264 11.98 NA 0.83 6.18 0.82 6.12
SMBC Southern Missouri Bncrp of MO 0.50 3.39 64.10 162 16.40 0.97 0.88 5.01 0.82 4.69
Comparable Group
- ----------------
CMRN Cameron Fin. Corp. of MO 0.28 2.07 28.87 172 26.54 0.79 1.61 5.79 1.59 5.73
CAPS Capital Savings Bancorp of MO 0.36 2.00 20.57 203 10.43 0.20 0.95 8.92 0.95 8.92
FBSI First Bancshares of MO 0.20 1.29 25.00 140 16.92 0.43 0.78 4.33 0.77 4.27
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.4
Public Market Pricing
Community Bank of MO and the Comparables
As of June 14, 1996
<TABLE>
<CAPTION>
Per Share Data
Market ---------------
Capitalization Book Pricing Ratios(3)
--------------- ---------------------------------------
Price/ Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
------- ------- ------- ------- ------- ------- ------- ------- --------
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFSL First Independence Corp. of KS 17.75 10.35 1.95 22.03 9.10 80.57 10.18 80.57 9.10
GFSB GFS Bancorp of Grinnell IA 20.25 10.43 1.57 18.91 12.90 107.09 12.89 107.09 13.15
NSLB NS&L Bancorp of Neosho MO 12.87 11.43 0.59 15.62 21.81 82.39 19.35 82.39 23.40
PCBC Perry Co. Fin. Corp. of MO 17.50 14.98 0.88 18.84 19.89 92.89 19.38 92.89 19.89
SMFC Sho-Me Fin. Corp. of MO 15.75 28.68 1.08 17.36 14.58 90.73 10.87 90.73 14.72
SMBC Southern Missouri Bncrp of MO 14.75 25.43 0.78 15.41 18.91 95.72 15.70 95.72 20.21
SFFC StateFed Financial Corp. of IA 16.00 13.17 1.03 18.13 15.53 88.25 17.75 88.25 15.53
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- ------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ --------------- --------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------- ------- ------- ------- ------- ------- ------- ------- ------- ------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFSL First Independence Corp. of KS 0.40 2.25 20.51 102 12.64 0.96 1.14 8.56 1.14 8.56
GFSB GFS Bancorp of Grinnell IA 0.30 1.48 19.11 81 12.04 0.97 1.09 8.45 1.06 8.29
NSLB NS&L Bancorp of Neosho MO 0.50 3.89 NM 59 23.49 0.18 0.93 4.27 0.87 3.98
PCBC Perry Co. Fin. Corp. of MO 0.30 1.71 34.09 77 20.86 0.04 1.00 5.36 1.00 5.36
SMFC Sho-Me Fin. Corp. of MO 0.00 0.00 0.00 264 11.98 NA 0.83 6.18 0.82 6.12
SMBC Southern Missouri Bncrp of MO 0.50 3.39 64.10 162 16.40 0.97 0.88 5.01 0.82 4.69
SFFC StateFed Financial Corp. of IA 0.40 2.50 38.83 74 20.11 NA 1.18 5.80 1.18 5.80
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) EPS (common earnings per share) is based on actual trailing twelve month
data and is shown on a pro forma basis.
(3) P/E = Price to Earnings; P/B = Price to Book; P/A = Price to Assets; P/TB =
Price to Tangible Book; and P/CORE = Price to Core Earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated twelve month dividend as a percent of trailing twelve month
earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and total
assets balances.
(7) Excludes from averages and medians those companies the subject of actual or
rumored acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, Inc.
<PAGE>
EXHIBITS
<PAGE>
LIST OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
I-1 Map of Office Locations
I-2 Audited Financial Statements
I-3 Key Operating Ratios
I-4 Investment Portfolio Composition
I-5 Yields and Costs
I-6 Loan Loss Allowance Activity
I-7 Net Portfolio Value Analysis
I-8 Fixed Rate and Adjustable Rate Loans
I-9 Loan Portfolio Composition
I-10 Loan Originations, Purchases, and Sales
I-11 Contractual Maturity By Loan Type
I-12 Non-Performing Assets/Classified Assets
I-13 Deposit Composition
I-14 Time Deposit Rate/Maturity
II-1 List of Office Characteristics
II-2 Historical Interest Rates
II-3 Sources of Personal Income/Employment Sectors
III-1 General Characteristics of Publicly-Traded
Institutions
III-2 Missouri Thrifts
</TABLE>
<PAGE>
LIST OF EXHIBITS(continued)
<TABLE>
<S> <C>
III-3 Thrifts in Continguous States
IV-1 Stock Prices: June 14, 1996
IV-2 Historical Stock Price Indices
IV-3 Historical Thrift Stock Indices
IV-4 Market Area Acquisition Activity
IV-5 Directors and Senior Management Summary Resumes
IV-6 Pro Forma Regulatory Capital Ratios
IV-7 Pro Forma Analysis Sheet
IV-8 Pro Forma Effect of Conversion Proceeds
IV-9 Peer Group Core Earnings Analysis
V-1 Firm Qualifications Statement
</TABLE>
<PAGE>
EXHIBITS
<PAGE>
NOTE: THE FOLLOWING APPRAISAL EXHIBITS HAVE BEEN CROSS REFERENCED TO THE
PROSPECTUS IN THE APPRAISAL FILED FOR EDGAR PURPOSES:
(see cross reference sheet on following page)
EXHIBIT I-1
Map of Office Location
EXHIBIT I-2
Audited Financial Statements
EXHIBIT I-3
Key Operating Ratios
EXHIBIT I-4
Investment Portfolio Composition
EXHIBIT I-5
Yields and Costs
EXHIBIT I-6
Loan Loss Allowance Activity
EXHIBIT I-7
Net Portfolio Value Analysis
EXHIBIT I-8
Fixed Rate and Adjustable Rate Loans
EXHIBIT I-9
Loan Portfolio Composition
EXHIBIT I-10
Loan Originations, Purchases, and Sales
EXHIBIT I-11
Contractual Maturity By Loan Type
EXHIBIT I-12
Non-Performing Assets/Classified Assets
EXHIBIT I-13
Deposit Composition
EXHIBIT I-14
Time Deposit Rate/Maturity
EXHIBIT I-15
Borrowings
EXHIBIT II-1
List of Branch Offices
EXHIBIT IV-5
Summary Director Resumes
EXHIBIT IV-6
Pro Forma Regulatory Capital Compliance
<PAGE>
APPRAISAL/PROSPECTUS CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
EXHIBIT NUMBER PROSPECTUS CROSS REFERENCE
- -------------- --------------------------
<S> <C>
Exhibit I-1: Map of Office Locations Map
Exhibit I-2: Audited Financial Statements Audit Financial Statements (Back of Prospectus)
Exhibit I-3: Key Financial Ratios Page 12
Exhibit I-4: Investment Portfolio Composition Page 63
Exhibit I-5: Yields and Costs Pages 34 and 35
Exhibit I-6: Loan Loss Allowance Activity Page 61
Exhibit I-7: Net Portfolio Value Analysis Page 41
Exhibit I-8: Fixed and Adjustable Rate Loans Page 49
Exhibit I-9: Loan Portfolio Composition Page 48
Exhibit I-10: Loan Orig., Purchases and Sales Page 56
Exhibit I-11: Contractual Maturity by Loan Type Page 55
Exhibit I-12: Non-Performing Assets Page 58
Exhibit I-13: Deposit Composition Page 65
Exhibit I-14: Time Deposit Rate/Maturity Page 66
Exhibit I-15: Borrowings Page 67
Exhibit II-1: Office Characteristics Page 68
Exhibit IV-5: Directors and Senior Management
Summary Resumes Pages 80 and 81
Exhibit IV-6: Pro Forma Regulatory Capital Table Page 27
</TABLE>
<PAGE>
EXHIBIT II-2
Historical Interest Rates
<PAGE>
HISTORICAL INTEREST RATES(1)
<TABLE>
<CAPTION>
Prime 90 Day One Year 30 Year
Year/qtr. Ended Rate T-bill T-bill T-bond
- --------------- ---- ------ ------ ------
<S> <C> <C> <C> <C>
1991: Quarter 1 8.75% 5.92% 6.24% 8.26%
Quarter 2 8.50% 5.72% 6.35% 8.43%
Quarter 3 8.00% 5.22% 5.38% 7.80%
Quarter 4 6.50% 3.95% 4.10% 7.47%
1992: Quarter 1 6.50% 4.15% 4.53% 7.97%
Quarter 2 6.50% 3.65% 4.06% 7.79%
Quarter 3 6.00% 2.75% 3.06% 7.38%
Quarter 4 6.00% 3.15% 3.59% 7.40%
1993: Quarter 1 6.00% 2.95% 3.18% 6.93%
Quarter 2 6.00% 3.09% 3.45% 6.67%
Quarter 3 6.00% 2.97% 3.36% 6.03%
Quarter 4 6.00% 3.06% 3.59% 6.34%
1994: Quarter 1 6.25% 3.56% 4.44% 7.09%
Quarter 2 7.25% 4.22% 5.49% 7.61%
Quarter 3 7.75% 4.79% 5.94% 7.82%
Quarter 4 8.50% 5.71% 7.21% 7.88%
1995: Quarter 1 9.00% 5.86% 6.47% 7.43%
Quarter 2 9.00% 5.57% 5.63% 6.63%
Quarter 3 8.75% 5.42% 5.68% 6.51%
Quarter 4 8.50% 5.09% 5.14% 5.96%
1996: Quarter 1 8.25% 5.14% 5.38% 6.67%
As of June 7, 1996 8.25% 5.25% 5.83% 7.03%
</TABLE>
(1) End of period data.
Source: SNL Securities.
<PAGE>
EXHIBIT II-3
Sources of Personal Income/Employment Sectors
<PAGE>
June 14, 1996
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
<TABLE>
<CAPTION>
(29-047) CLAY MISSOURI
- -----------------------------------------------------------------------------------------------------------------------
Item 1988 1989 1990 1991 1992 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Place of Residence Profile
Total personal income ($000) 2,575,917 2,736,908 2,852,558 2,938,291 3,122,204 3,275,764
Nonfarm personal income 2,577,586 2,736,828 2,853,327 2,936,715 3,120,062 3,275,796
Farm income -1,699 80 -769 1,576 2,142 (L)
Derivation of Total Personal Income
Net earnings 1/ 1,961,575 2,051,544 2,145,858 2,215,341 2,391,063 2,505,372
Transfer payments 266,352 273,418 285,519 331,175 359,063 390,792
Income maintenance 2/ 6,738 8,027 10,533 13,383 16,486 18,048
Unemployment insurance 5,710 6,354 7,822 11,638 12,912 11,944
Retirement and other 253,904 259,031 267,164 306,154 329,665 360,800
Dividends, interest, and rent 347,990 411,946 421,181 391,775 372,078 379,600
Population (thousands) 3/ 149.9 151.7 154.2 156.5 158.5 161.0
Per Capita Incomes ($) 4/
Per capita personal income 17,186 18,041 18,503 18,770 19,701 20,345
Per capita net earnings 13,087 13,523 13,919 14,152 15,087 15,560
Per capita transfer payments 1,777 1,802 1,852 2,116 2,266 2,427
Per capita income maintenance 45 53 68 85 104 112
Per capita unemployment insurance 38 42 51 74 81 74
Per capita retirement & other 1,694 1,707 1,733 1,956 2,080 2,241
Per capita dividends, interest,
& rent 2,322 2,715 2,732 2,503 2,348 2,358
Place of Work Profile
Total earnings (place of work, $000) 1,676,079 1,746,314 1,845,984 1,917,104 2,128,953 2,233,801
Wages and salaries 1,367,735 1,437,701 1,521,132 1,568,649 1,726,315 1,810,890
Other labor income 144,122 152,430 162,976 181,658 226,551 236,048
Proprietors' income 164,222 156,183 161,876 166,797 176,087 186,863
Nonfarm 166,679 156,945 163,600 166,156 174,883 187,893
Farm -2,457 -762 -1,724 641 1,204 -1,030
Total employment (full & part-time) 77,632 80,920 83,266 84,208 87,029 89,676
Wage and salary jobs 65,666 69,062 70,429 76,670 73,493 76,005
Number of proprietors 11,966 11,858 12,837 13,538 13,536 13,671
Nonfarm /5 11,187 11,080 12,069 12,781 12,777 12,919
Farm 779 778 768 757 759 752
Average earnings per job ($) 21,590 21,581 22,170 22,766 24,463 24,910
Wage & salary earnings per job ($) 20,829 20,818 21,598 22,197 23,490 23,826
Average earnings per nonfarm
proprietor ($) 14,899 14,165 13,555 13,000 13,687 14,544
</TABLE>
See footnotes at end of table REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 May 1995 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
Footnotes for Table CA30
1/ Total earnings less personal contributions for social insurance adjusted to
place of residence.
2/ Includes supplemental security income payments, payments to families with
dependent children (AFDC), general assistance payments, food stamp
payments, and other assistance payments, including emergency assistance.
3/ Census Bureau midyear population estimates. Estimates for 1990-93 reflect
State and county population estimates available as of February 1995.
4/ Type of income divided by population yields a per capita for that type of
income.
5/ Excludes limited partners.
6/ Cibola, NM was separated from Valencia in June 1981, but in these estimates
Valencia includes Cibola through the end of 1981.
7/ La Paz county, AZ was separated from Yuma county on January 1, 1983.
8/ Estimates for 1979 forward reflect Alaska Census Areas as defined in the
1980 Decennial Census; those for prior years reflect Alaska Census
Divisions as defined in the 1970 Decennial Census. Estimates from 1988
forward separate Aleutian Islands Census Area Into Aleutian East Borough
and Aleutians West Census Area. Denali and Lake + Peninsula Boroughs begin
in 1991. Estimates from 1993 forward separate Skagway-Yakutat-Angoon Census
Area into Skagway-Hoonah-Angoon Census Area and Yakutat Borough.
(L) Less than $50,000 or less than 10 jobs, as appropriate. Estimates are
included in totals.
(N) Data not available for this year.
Table CA30 May 1995 REGIONAL ECONOMIC INFORMATION SYSTEM
BUREAU OF ECONOMIC ANALYSIS
<PAGE>
June 14, 1996
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(29-047) CLAY MISSOURI
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Item 1988 1989 1990 1991 1992 1993
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income by place of residence
Total personal income ($000) 2,575,917 2,736,908 2,852,558 2,938,291 3,122,204 3,275,764
Nonfarm personal income 2,577,586 2,736,828 2,853,327 2,936,715 3,120,062 3,275,796
Farm income 2/ -1,669 80 -769 1,576 2,142 (L)
Population (thousands) 3/ 149.9 151.7 154.2 156.5 158.5 161.0
Per capital personal income (dollars) 17,186 18,041 18,503 18,770 19,701 20,345
Derivation of total personal income
Earnings by place of work 1,676,079 1,746,314 1,845,984 1,917,104 2,128,953 2,233,801
Less: Personal cont. for social insur. 4/ 110,489 115,445 120,471 126,418 137,315 145,231
Plus: Adjustments for residence 5/ 395,985 420,675 420,345 424,655 399,425 416,802
Equals: Net earn. by place of residence 1,961,575 2,051,544 2,145,858 2,215,341 2,391,063 2,505,372
Plus: Dividends, interest, and rent 6/ 347,990 411,946 421,181 391,775 372,078 379,600
Plus: Transfer payments 266,352 273,418 285,519 331,175 359,063 390,792
Earnings by place of work
Components of Earnings:
Wages and salaries 1,367,735 1,437,701 1,521,132 1,568,649 1,726,315 1,810,890
Other labour income 144,122 152,430 162,976 181,658 226,551 236,048
Proprietors' income 7/ 164,222 156,183 161,876 166,797 176,087 186,863
Farm -2,457 -762 -1,724 641 1,204 -1,030
Nonfarm 166,679 156,945 163,600 166,156 174,883 187,893
Earning by Industry:
Farm -1,669 80 -769 1,576 2,142 (L)
Nonfarm 1,677,748 1,746,234 1,846,753 1,915,528 2,126,811 2,233,833
Private 1,502,491 1,552,475 1,634,478 1,691,490 1,888,323 1,979,463
Ag. serv.. for.. fish.. and other 8/ 3,404 3,996 4,611 (D) 5,564 6,238
Mining 5,514 3,795 3,310 (D) 3,674 3,566
Construction 96,497 101,055 104,386 101,970 107,009 114,213
Manufacturing 536,863 553,934 571,093 580,587 683,395 683,354
Nondurable goods 242,807 264,550 288,715 219,217 317,901 317,972
Durable goods 294,056 289,384 282,378 289,370 365,494 365,382
Transportation and public utilities 116,437 118,816 127,153 131,261 129,192 144,281
Wholesale trade 188,370 194,924 201,163 206,760 232,916 238,127
Retail trade 227,467 230,131 245,007 255,179 268,126 293,790
Finance, insurance, and real estate 63,815 62,575 69,866 70,518 83,208 91,670
Services 264,124 283,249 307,889 336,159 375,239 404,224
Government and government enterprises 175,257 193,759 212,275 224,038 238,488 254,370
Federal, civilian 14,807 16,462 18,255 19,287 13,964 14,351
Military 14,502 15,302 17,062 17,675 10,682 18,753
State and local 145,948 161,995 176,958 187,076 205,842 221,266
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 May 1995 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
Footnotes for Table CA05
1/ 1969-74 based on 1967 SIC. 1975-87 based on 1972 SIC. 1988-93 based on
1987 SIC.
2/ Farm income consists of proprietors' net farm income, the wages of hired
farm labor, the pay-in-kind of hired farm labor, and the salaries of
officers of corporate farms.
3/ Census Bureau midyear population estimates. Estimates for 1990-93 reflect
State and county population estimates.
4/ Personal contributions for social insurance are included in earnings by
type and industry but excluded from personal income.
5/ U.S. adjustment for residence consists of adjustments for border workers:
income of U.S. residents commuting outside U.S. borders to work less income
of foreign residents commuting inside U.S. borders to work plus certain
Caribbean seasonal workers.
6/ Includes the capital consumption adjustment for rental income of persons.
7/ Includes the inventory valuation and capital consumption adjustments.
8/ "Other" consists of wages and salaries of U.S. residents employed by
international organizations and foreign embassies and consulates in the
U.S.
13/ Estimates for 1979 forward reflect Alaska Census Areas as defined in the
1980 Decennial Census; those for prior years reflect Alaska Census
Divisions as defined in the 1970 Decennial Census. Estimates from 1988
forward separate Aleutian Islands Census Areas into Aleutians East Borough
and Aleutians West Census Area. Denali and Lake + Peninsula Boroughs begin
in 1991. Estimates from 1993 forward separate Skagway-Yakutat-Angoon Census
Area into Skagway-Hoonah-Angoon Census Area and Yakutat Borough.
14/ Cibola, NM was separated from Valencia in June 1981, but in these
estimates, Valencia includes Cibola through the end of 1981.
15/ La Paz county, AZ was separated from Yuma county on January 1, 1983.
E The estimate shown here constitutes the major portion of the true estimate.
(D) Not shown to avoid disclosure of confidential information.
(L) Less than $50,000. Estimates are included in totals.
(N) Data not available for this year.
REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 May 1995 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
June 14. 1996
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(29-047) CLAY MISSOURI
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Item 1988 1989 1990 1991 1992 1993
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Employment by Place of Work
Total employment 77,632 80,920 83,266 84,208 87,029 89,676
By Type:
Wage and salary 65,632 69,062 70,429 70,670 73,493 76,005
Proprietors 11,966 11,858 12,837 13,538 13,536 13,671
Farm 779 778 768 757 759 752
Nonfarm 2/ 11,187 11,080 12,069 12,781 12,777 12,919
By Industry:
Farm 897 906 881 849 855 843
Nonfarm 76,735 80,014 82,385 83,359 86,174 88,833
Private 68,420 71,351 73,336 74,188 76,774 79,016
Ag.serv..for..fish.. and other 3/ 386 426 510 (D) 583 651
Mining 216 185 184 (D) 209 191
Construction 3,800 3,875 3,898 3,869 4,145 4,292
Manufacturing 15,002 16,226 16,723 16,122 16,774 16,687
Transportation and public utilities 3,746 3,940 4,091 4,312 3,917 4,212
Wholesale trade 6,523 6,477 6,475 6,398 6,675 6,869
Retail trade 15,672 16,529 16,976 17,395 18,246 18,870
Finance, insurance, and real estate 4,678 4,502 4,662 4,726 4,770 4,824
Services 18,397 19,191 19,817 20,584 21,455 22,465
Government and government enterprises 8,315 8,663 9,049 9,171 9,400 9,772
Federal, civilian 439 470 495 490 341 330
Military 1,252 1,252 1,290 1,261 1,228 1,193
State and local 6,624 6,941 7,264 7,420 7,831 8,249
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 May 1995 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
Footnotes for Table CA25
1/ 1969-74 based on 1967 SIC. 1975-87 based on 1972 SIC. 1988-93 based on 1987
SIC.
2/ Excludes limited partners.
3/ "Other" consists of the number of jobs held by U.S. residents employed by
international organizations and foreign embassies.
4/ Cibola; NM was separated from Valencia in June 1981, but in these estimates
Valencia includes Cibola through the end of 1981.
5/ La Paz country, AZ was separated from Yuma county on January 1, 1983.
6/ Estimates for 1979 forward reflect Alaska Census Areas as defined in the
1980 Decennial Census; those for prior years reflect Alaska Census
Divisions as defined in the 1970 Decennial Census. Estimates from 1988
forward separate Aleutian Islands Census Area into Aleutians East Borough
and Aleutians West Census Area. Denali and Lake + Peninsula Boroughs begins
in 1991. Estimates from 1993 forward separate Skagway-Yakutat-Angoon Census
Area into Skagway-Hoonah-Angoon Census Area and Yakutat Borough.
E Estimate shown constitutes the major portion of the true estimate.
(D) Not shown to avoid disclosure of confidential information.
(L) Less than 10 jobs. Estimates are included in totals.
(N) Data not available for this year.
Table CA25 May 1995 REGIONAL ECONOMIC INFORMATION SYSTEM
BUREAU OF ECONOMIC ANALYSIS
<PAGE>
EXHIBIT III-1
General Characteristics of Publicly-Traded Institutions
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
California Companies
- --------------------
AHM Ahmanson and Co. H.F. of CA NYSE Nationwide M.B. 49,782 335 12-31 10/72 26.50 2,982
GWF Great Western Fin. Corp. of CA NYSE CA,FL Div. 43,763 418 12-31 / 23.50 3,224
GDW Golden West Fin. Corp. of CA NYSE Nationwide M.B. 35,014 232 12-31 05/59 54.62 3,202
GLN Glendale Fed. Bk, FSB of CA NYSE CA Div. 14,368 148 06-30 10/83 18.75 827
CAL CalFed Inc. of Los Angeles CA NYSE CA,NV Div. 14,280 126 12-31 03/83 18.62 918
CSA Coast Savings Financial of CA NYSE California R.E. 8,240 89 12-31 12/85 33.37 620
DSL Downey Financial Corp. of CA NYSE Southern CA Thrift 4,653 52 12-31 01/71 21.62 367
FED FirstFed Fin. Corp. of CA NYSE Los Angeles CA R.E. 4,166 25 12-31 12/83 17.25 183
WES Westcorp Inc. of Orange CA NYSE California Div. 3,077 25 12-31 05/86 18.87 488
BVFS Bay View Capital Corp. of CA OTC San Francisco CA M.B. 2,910 27 12-31 05/86 33.00 288
AFFFZ America First Fin. Fund of CA OTC San Francisco CA Div. 2,333 36 12-31 / 26.00 156
CENF CENFED Financial Corp. of CA OTC Los Angeles CA Thrift 2,114 18 12-31 10/91 21.50 108
PFFB PFF Bancorp of Pomona CA OTC Southern CA Thrift 2,008 23 03-31 03/96 11.25 223
FRC First Republic Bancorp of CA (3) NYSE CA,NV M.B. 1,973 10 12-31 / 14.62 107
CFHC California Fin. Hld. Co. of CA OTC Central CA Thrift 1,278 22 12-31 04/83 20.50 96
REDF RedFed Bancorp of Redlands CA OTC Southern CA Thrift 858 14 12-31 04/94 9.62 39
HTHR Hawthorne Fin. Corp. of CA OTC Southern CA Thrift 773 9 12-31 / 7.50 19
HEMT HF Bancorp of Hemet CA OTC Southern CA Thrift 754 12 06-30 06/95 10.00 66
QCBC Quaker City Bancorp of CA OTC Los Angeles CA R.E. 693 8 06-30 12/93 14.50 57
HBNK Highland Federal Bank of CA OTC Los Angeles CA R.E. 442 11 12-31 / 16.37 38
SGVB SGV Bancorp of W. Covina CA OTC Los Angeles CA Thrift 333 6 06-30 06/95 8.62 24
MBBC Monterey Bay Bancorp of CA OTC West Central CA Thrift 319 6 12-31 02/95 11.87 41
NHSL NHS Financial, Inc. of CA OTC Central CA R.E. 293 3 12-31 / 10.87 27
PCCI Pacific Crest Capital of CA (3) OTC Southern CA R.E. 287 4 12-31 / 8.13 24
PSSB Palm Springs SB of CA OTC Southern CA Thrift 192 4 12-31 / 13.75 16
BYFC Broadway Fin. Corp. of CA OTC Los Angeles CA Thrift 115 4 12-31 01/96 10.00 9
FSSB First FS&LA of San Bern. CA OTC San Bernard. CA Thrift 103 4 06-30 12/92 10.00 3
Florida Companies
- -----------------
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Florida Companies (continued)
- -----------------------------
BANC BankAtlantic Bancorp of FL OTC Southeastern FL M.B. 1,643 40 12-31 11/83 14.00 164
FFPB First Palm Beach Bancorp of FL OTC Southeast FL Thrift 1,465 23 09-30 09/93 21.25 110
HOFL Home Financial Corp. of FL OTC Southern FL R.E. 1,227 8 09-30 10/94 13.81 342
HARB Harbor FSB, MHC of FL (45.7) OTC Eastern FL Thrift 933 22 09-30 01/94 27.00 133
FFFL Fidelity FSB, MHC of FL(47.2) OTC Southeast FL Thrift 792 20 12-31 01/94 13.50 91
BKUNA BankUnited SA of FL OTC Miami FL Thrift 738 6 09-30 12/85 7.75 44
CMSV Commty. Svgs, MHC of FL(47.6) OTC Southeast FL Thrift 632 17 09-30 10/94 14.75 72
SCSL Suncoast S&LA of Hollywood FL OTC Southeastern FL M.B. 466 4 06-30 11/85 6.25 12
FFLC FFLC Bancorp of Leesburg FL OTC Central FL Thrift 331 7 12-31 01/94 17.75 47
FFFG F.F.O. Financial Group of FL OTC Central FL R.E. 306 10 12-31 10/88 2.69 23
FFPC Florida First Bancorp of FL OTC Northwestern FL Thrift 304 9 12-31 11/86 11.12 38
FPRY First Financial Bancorp of FL OTC Northern FL Thrift 240 6 09-30 03/88 20.37 18
FFML First Family Bank, FSB of FL OTC Central FL Thrift 153 D 5 06-30 10/92 21.12 12
Mid-Atlantic Companies
- ----------------------
DME Dime Savings Bank, FSB of NY (3) NYSE NY,NJ,FL M.B. 19,414 87 12-31 08/86 13.12 1,297
GPT GreenPoint Fin. Corp. of NY (3) NYSE New York City NY Thrift 14,469 84 06-30 01/94 29.75 1,561
SVRN Sovereign Bancorp of PA OTC PA,NJ,DE M.B. 8,411 121 12-31 08/86 10.37 496
ASFC Astoria Financial Corp. of NY OTC New York City NY Thrift 6,708 46 12-31 11/93 27.00 296
COFD Collective Bancorp Inc. of NJ OTC Southern NJ Thrift 5,059 79 06-30 02/84 24.12 492
LISB Long Island Bancorp of NY OTC Long Island NY M.B. 4,834 36 09-30 04/94 29.87 743
RCSB RCSB Financial, Inc. of NY (3) OTC NY M.B. 4,111 31 11-30 04/86 24.75 334
ALBK ALBANK Fin. Corp. of Albany NY OTC NY,MA Thrift 3,333 57 06-30 04/92 27.25 371
ROSE TR Financial Corp. of NY OTC New York, NY Thrift 3,002 15 12-31 06/93 26.12 234
NYB New York Bancorp, Inc. of NY AMEX Southeastern NY Thrift 2,754 27 09-30 01/88 25.25 296
GRTR Greater New York SB of NY (3) OTC New York NY Div. 2,576 14 12-31 06/87 11.00 146
BKCO Bankers Corp. of NJ (3) OTC Central NJ Thrift 1,916 14 12-31 03/90 17.25 221
NWSB Northwest SB, MHC of PA(29.9) OTC Pennsylvania Thrift 1,767 46 06-30 11/94 11.87 277
MLFB MLF Bancorp of Villanova PA OTC Philadelphia PA M.B. 1,766 17 03-31 08/94 23.75 148
RELY Reliance Bancorp of NY OTC NYC NY Thrift 1,744 17 06-30 03/94 15.50 143
CMSB Cmnwealth SB, MHC of PA (46.3) OTC Philadelphia PA M.B. 1,658 35 06-30 01/94 21.88 189
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
- ----------------------------------
NSBK Northside SB of Bronx NY (3) OTC New York NY Thrift 1,580 17 09-30 04/86 36.12 174
JSBF JSB Financial, Inc. of NY OTC New York City R.E. 1,548 13 12-31 06/90 32.62 337
HAVN Haven Bancorp of Woodhaven NY OTC New York City NY Thrift 1,485 9 12-31 09/93 27.75 119
QCSB Queens County SB of NY (3) OTC New York City NY R.E. 1,260 9 12-31 11/93 47.62 291
WSFS WSFS Financial Corp. of DE (3) OTC DE Div. 1,259 13 12-31 11/86 7.87 112
HARS Harris SB, MHC of PA (23.1) OTC Southeast PA Thrift 1,249 25 12-31 01/94 16.75 188
MFSL Maryland Fed. Bancorp of MD OTC MD Thrift 1,143 25 02-28 06/87 29.62 93
YFED York Financial Corp. of PA OTC PA,MD Thrift 1,049 22 06-30 02/84 16.62 101
PFSB PennFed Fin. Services of NJ OTC Northern NJ Thrift 1,023 17 06-30 07/94 15.12 77
FSLA First SB, SLA MHC of NJ (37.6) OTC Eastern NJ Thrift 959 22 12-31 06/92 16.00 104
PVSA Parkvale Financial Corp of PA OTC Southwestern PA Thrift 914 28 06-30 07/87 26.00 84
PKPS Poughkeepsie SB of NY OTC Poughkeepsie NY R.E. 839 7 12-31 11/85 5.50 69
WFSB 1st Washington Bancorp of VA OTC DC Metro Area Thrift 795 17 06-30 05/87 7.94 78
PSBK Progressive Bank, Inc. of NY (3) OTC Eastern NY Thrift 786 15 12-31 08/84 29.00 76
IBSF IBS Financial Corp. of NJ OTC Southwest NJ Thrift 757 8 09-30 10/94 14.00 160
FFIC Flushing Fin. Corp. of NY (3) OTC New York, NY Thrift 739 7 12-31 11/95 15.75 125
PWBC PennFirst Bancorp of PA OTC Western PA Thrift 680 9 12-31 06/90 13.75 55
FSNJ First SB of NJ, MHC (45.0) OTC Northern NJ Thrift 657 D 4 05-31 01/95 14.12 43
SFIN Statewide Fin. Corp. of NJ OTC Northern NJ Thrift 634 14 03-31 10/95 12.12 64
FSFI First State Fin. Serv. of NJ OTC Northeastern NJ Thrift 629 12 09-30 12/87 10.00 40
FCIT First Cit. Fin. Corp of MD OTC DC Metro Area Thrift 624 14 12-31 12/86 17.75 52
PSAB Prime Bancorp, Inc. of PA OTC Southeastern PA Thrift 609 17 12-31 11/88 17.50 65
GAF GA Financial Corp. of PA AMEX Pittsburgh PA Thrift 569 10 12-31 03/96 10.75 96
BFSI BFS Bankorp, Inc. of NY OTC New York NY R.E. 566 5 09-30 05/88 39.50 65
FBBC First Bell Bancorp of PA OTC Pittsburgh PA Thrift 543 7 12-31 06/95 13.44 110
THRD TF Financial Corp. of PA OTC Philadelphia PA Thrift 519 11 06-30 07/94 14.62 66
TSBS Trenton SB, FSB MHC of NJ(35.0 OTC Central NJ Thrift 519 10 12-31 08/95 14.50 129
FMCO FMS Financial Corp. of NJ OTC Southern NJ Thrift 506 14 12-31 12/88 16.25 40
CONE Conestoga Bancorp of Roslyn NY OTC New York, NY Thrift 494 8 03-31 03/94 21.00 100
FSPG First Home SB, SLA of NJ OTC NJ,DE Thrift 466 10 12-31 04/87 17.75 36
CJFC Central Jersey Fin. Corp of NJ OTC Central NJ Thrift 466 D 6 03-31 09/84 30.25 81
LVSB Lakeview SB of Paterson NJ OTC Northern NJ Thrift 455 8 07-31 12/93 19.00 43
MSBB MSB Bancorp of Middletown NY (3) OTC Southeastern NY Thrift 454 D 9 09-30 08/92 15.75 45
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
- ----------------------------------
PULS Pulse Bancorp of S. River NJ OTC Central NJ Thrift 452 4 09-30 09/86 17.31 67
IROQ Iroquois Bancorp of Auburn NY (3) OTC Central NY Thrift 451 9 12-31 01/86 14.50 34
ANBK American Nat'l Bancorp of MD OTC Baltimore MD R.E. 449 9 07-31 11/95 10.00 40
AHCI Ambanc Holding Co. of NY (3) OTC East-Central NY Thrift 392 9 12-31 12/95 9.38 51
PBCI Pamrapo Bancorp, Inc. of NJ OTC Northern NJ Thrift 368 8 12-31 10/89 19.00 63
CARV Carver FSB of New York, NY OTC New York, NY Thrift 363 D 8 03-31 10/94 7.62 18
SHEN First Shenango Bancorp of PA OTC Western PA Thrift 356 4 12-31 04/93 20.50 47
PFNC Progress Financial Corp. of PA OTC Southeastern PA M.B. 348 9 12-31 07/83 6.50 24
RARB Raritan Bancorp. of Raritan NJ (3) OTC Central NJ Thrift 347 5 12-31 03/87 21.19 30
FOBC Fed One Bancorp of Wheeling WV OTC Northern WV,OH Thrift 340 9 12-31 01/95 14.62 36
CNSK Covenant Bank for Svgs. of NJ (3) OTC Southern NJ Thrift 339 10 12-31 / 12.00 24
FFWM First Fin. Corp of Western MD OTC Western MD Thrift 326 9 06-30 01/92 20.00 44
PBIX Patriot Bank Corp. of PA OTC Southeast PA Thrift 313 7 12-31 12/95 13.00 45
FSBI Fidelity Bancorp, Inc. of PA OTC Southwestern PA Thrift 301 8 09-30 06/88 16.00 22
LFBI Little Falls Bancorp of NJ OTC New Jersey Thrift 286 6 12-31 01/96 9.87 30
CATB Catskill Fin. Corp. of NY (3) OTC Albany NY Thrift 279 P 3 09-30 04/96 10.25 58
FKFS First Keystone Fin. Corp of PA OTC Philadelphia PA Thrift 278 5 09-30 01/95 17.25 22
CVAL Chester Valley Bancorp of PA OTC Southeastern PA Thrift 275 6 06-30 03/87 18.62 29
HARL Harleysville SA of PA OTC Southeastern PA Thrift 274 4 09-30 08/87 18.37 24
LFED Leeds FSB, MHC of MD (35.3) OTC Baltimore MD Thrift 267 1 06-30 03/94 14.00 48
IFSB Independence FSB of DC OTC Washington DC Ret. 264 D 4 12-31 06/85 7.50 10
WSB Washington SB, FSB of MD AMEX Southeastern MD Thrift 263 D 3 07-31 / 5.63 24
EQSB Equitable FSB of Wheaton MD OTC Central MD Thrift 260 4 09-30 09/93 22.50 14
FBER First Bergen Bancorp of NJ OTC Northern NJ Thrift 259 2 09-30 04/96 9.25 29
FIBC Financial Bancorp of NY OTC New York, NY Thrift 252 5 09-30 08/94 12.87 24
YFCB Yonkers Fin. Corp. of NY OTC Yonkers NY Thrift 241 P 4 09-30 04/96 9.62 34
WVFC WVS Financial Corp. of PA (3) OTC Pittsburgh PA Thrift 240 5 06-30 11/93 20.75 36
GDVS Greater DV SB,MHC of PA(19.9) (3) OTC Southeast PA Thrift 236 7 12-31 03/95 10.00 33
ESBK Elmira SB of Elmira NY (3) OTC NY,PA Ret. 223 6 12-31 03/85 16.50 12
HFMD Home Federal Corporation of MD OTC Western MD Thrift 217 7 12-31 02/84 10.25 26
CTBK Center Banks, Inc. of NY (3) OTC Central NY Thrift 215 7 12-31 05/86 13.75 13
PEEK Peekskill Fin. Corp. of NY OTC Southeast NY Thrift 194 3 06-30 12/95 12.00 49
LARL Laurel Capital Group of PA OTC Southwestern PA Thrift 193 6 06-30 02/87 15.00 23
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-Atlantic Companies (continued)
- ----------------------------------
PHFC Pittsburgh Home Fin. of PA OTC Pittsburgh PA Thrift 180 P 6 09-30 04/96 10.00 22
SBFL SB Fing. Lakes MHC of NY(33.0) OTC Western NY Thrift 177 3 04-30 11/94 16.50 29
SFED SFS Bancorp of Schenectady NY OTC Eastern NY Thrift 166 3 12-31 06/95 11.75 16
HRBF Harbor Federal Bancorp of MD OTC Baltimore MD Thrift 154 D 6 03-31 08/94 12.87 24
TPNZ Tappan Zee Fin. Corp. of NY OTC Southeast NY Thrift 115 1 03-31 10/95 12.00 19
WHGB WHG Bancshares of MD OTC Baltimore MD Thrift 112 5 09-30 04/96 11.50 19
THBC Troy Hill Bancorp of PA OTC Pittsburgh PA Thrift 80 2 06-30 06/94 13.37 14
ALBC Albion Banc Corp. of Albion NY OTC Western NY Thrift 57 2 09-30 07/93 17.00 4
BRFC Bridgeville SB, FSB of PA OTC Western PA Thrift 56 1 12-31 10/94 14.25 16
Mid-West Companies
- ------------------
SFB Standard Fed. Bancorp of MI NYSE MI,IN,OH M.B. 13,505 164 12-31 01/87 38.87 1,216
COFI Charter One Financial of OH OTC Northeastern OH Div. 13,174 94 12-31 01/88 35.62 1,607
RFED Roosevelt Fin. Grp. Inc. of MO OTC MO,IL,KS Div. 9,135 78 12-31 01/87 18.25 769
TCB TCF Financial Corp. of MN NYSE MN,IL,MI,WI,OH Div. 7,039 180 12-31 06/86 33.62 1,205
CFB Commercial Federal Corp. of NE NYSE NE,CO,KS,OK M.B. 6,617 91 06-30 12/84 38.12 574
FFHC First Financial Corp. of WI OTC WI,IL Div. 5,419 129 12-31 12/80 23.00 687
SPBC St. Paul Bancorp, Inc. of IL OTC Chicago IL Div. 4,143 52 12-31 05/87 23.50 436
SECP Security Capital Corp. of WI OTC Wisconsin Div. 3,345 42 06-30 01/94 61.00 582
CTZN CitFed Bancorp of Dayton OH OTC Dayton OH M.B. 2,598 33 03-31 01/92 36.75 209
GTFN Great Financial Corp. of KY OTC Kentucky M.B. 2,477 40 12-31 03/94 27.00 396
STND Standard Fin. of Chicago IL OTC Chicago IL Thrift 2,187 13 12-31 08/94 15.25 256
MAFB MAF Bancorp of IL OTC Chicago IL Thrift 1,980 13 06-30 01/90 24.50 128
BELL Bell Bancorp of Chicago IL OTC Chicago IL Thrift 1,939 14 03-31 12/91 37.37 344
ABCW Anchor Bancorp Wisconsin of WI OTC Wisconsin M.B. 1,755 32 03-31 07/92 34.50 170
FISB First Indiana Corp. of IN OTC Central IN M.B. 1,477 28 12-31 08/83 24.50 203
FTFC First Fed. Capital Corp. of WI OTC Southern WI M.B. 1,382 40 12-31 11/89 22.00 139
STFR St. Francis Cap. Corp. of WI OTC Milwaukee WI Thrift 1,296 13 09-30 06/93 25.50 149
DNFC D&N Financial Corp. of MI OTC MI,WI Ret. 1,232 33 12-31 02/85 12.37 84
JSBA Jefferson Svgs Bancorp of MO OTC St. Louis MO,TX Thrift 1,143 D 21 12-31 04/93 27.25 114
FFSW First Fed Fin. Serv. of OH OTC Northeastern OH Thrift 993 18 12-31 04/87 28.00 92
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 20, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
- ------------------------------
AADV Advantage Bancorp of WI OTC WI,IL Thrift 980 15 09-30 03/92 34.00 117
CFSB CFSB Bancorp of Lansing MI OTC Central MI Thrift 772 18 12-31 06/90 20.62 92
OFCP Ottawa Financial Corp. of MI OTC Western MI Thrift 745 12 12-31 08/94 16.25 89
MSBK Mutual SB, FSB of Bay City MI OTC Michigan M.B. 719 24 12-31 07/92 5.50 23
IFSL Indiana Federal Corp. of IN OTC Northwestern IN Thrift 718 15 12-31 02/87 19.12 91
HNFC Hinsdale Financial Corp. of IL OTC Chicago IL M.B. 682 10 09-30 07/92 23.50 63
FFEC First Fed. Bancshares of WI OTC Northwest WI Thrift 672 18 12-31 10/94 16.00 110
LBCI Liberty Bancorp of Chicago IL OTC Chicago IL Thrift 670 4 12-31 12/91 22.75 57
NASB North American SB of MO OTC KS,MO M.B. 664 8 09-30 09/85 29.50 67
GSBC Great Southern Bancorp of MO OTC Southwest MO Div. 659 25 06-30 12/89 27.50 122
FFDP FirstFed Bancshares of IL OTC Chicago IL Thrift 624 3 12-31 07/92 16.12 55
HOMF Home Fed Bancorp of Seymour IN OTC Southern IN Thrift 606 15 06-30 01/88 26.75 59
AVND Avondale Fin. Corp. of IL OTC Chicago IL Ret. 580 6 03-31 04/95 13.25 53
HFFC HF Financial Corp. of SD OTC South Dakota Thrift 574 18 06-30 04/92 15.00 46
FFYF FFY Financial Corp. of OH OTC Youngstown OH Thrift 573 9 06-30 06/93 23.25 121
FNGB First Northern Cap. Corp of WI OTC Northeast WI Thrift 572 20 12-31 12/83 15.69 71
HMNF HMN Financial, Inc. of MN OTC Southeast MN Thrift 542 7 12-31 06/94 15.69 81
FDEF First Defiance Fin. Corp. of OH OTC Northwest OH Thrift 528 9 06-30 10/95 10.62 117
SSBK Strongsville SB of OH OTC Cleveland OH Thrift 505 12 12-31 / 21.50 54
CBCI Calumet Bancorp of Chicago IL OTC Chicago IL Thrift 502 5 06-30 02/92 28.00 75
FFBH First Fed. Bancshares of AR OTC Northern AR Thrift 498 P 8 12-31 05/96 13.75 71
SFSL Security First Corp. of OH OTC Northeastern OH R.E. 470 10 03-31 01/88 13.25 47
FFSX First FS&LA. MHC of IA (45.0) OTC Western IA Thrift 437 12 06-30 06/92 25.75 44
FBCI Fidelity Bancorp of Chicago IL OTC Chicago IL Thrift 433 5 09-30 12/93 16.62 51
ASBI Ameriana Bancorp of IN OTC Eastern IN,OH Thrift 383 8 12-31 02/87 13.00 43
PERM Permanent Bancorp of IN OTC Southwest IN Thrift 378 D 11 03-31 04/94 16.00 35
PMFI Perpetual Midwest Fin. of IA OTC EastCentral IA Thrift 374 4 12-31 03/94 17.00 34
PFSL Pocahnts Fed, MHC of AR (46.4) OTC Northeast AR Thrift 369 5 09-30 04/94 15.75 25
KNK Kankakee Bancorp of IL AMEX Illinois Thrift 363 10 03-31 12/92 19.37 28
SFSB SuburbFed Fin. Corp. of IL OTC IL,IN Thrift 362 12 12-31 02/92 17.62 22
FFKY First Fed. Fin. Corp. of KY OTC Central KY Thrift 351 7 06-30 07/87 42.00 89
SWBI Southwest Bancshares of IL OTC Chicago IL Thrift 350 5 12-31 06/92 27.25 51
CAFI Camco Fin. Corp. of OH OTC Eastern OH M.B. 344 7 12-31 / 20.00 39
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
- ------------------------------
HMCI Homecorp, Inc. of Rockford IL OTC Northern IL Thrift 342 9 12-31 06/90 17.50 20
HVFD Haverfield Corp. of OH OTC Cleveland OH Thrift 340 11 12-31 03/85 17.75 34
HALL Hallmark Capital Corp. of WI OTC Milwaukee WI Thrift 339 3 06-30 01/94 14.81 21
INBI Industrial Bancorp of OH OTC Northern OH Thrift 327 10 12-31 08/95 11.75 65
FFHH FSF Financial Corp. of MN OTC Southern MN Thrift 327 11 09-30 10/94 11.69 45
WOFC Western Ohio Fin. Corp. of OH OTC Western OH Thrift 320 5 12-31 07/94 23.00 53
PVFC PVF Capital Corp. of OH OTC Cleveland OH R.E. 318 7 06-30 12/92 19.00 29
HBFW Home Bancorp of Fort Wayne IN OTC Northeast IN Thrift 313 8 09-30 03/95 14.75 46
CASH First Midwest Fin. Corp. of IA OTC IA,SD R.E. 310 8 09-30 09/93 23.50 42
WCBI WestCo Bancorp of IL OTC Chicago IL Thrift 309 1 12-31 06/92 22.00 59
CBSB Charter Financial Inc. of IL OTC Southern IL Thrift 301 6 09-30 12/95 11.50 57
WBCI WFS Bancorp of Wichita KS OTC Wichita KS Thrift 292 D 4 09-30 06/94 22.87 36
MCBS Mid Continent Bancshares of KS OTC Central KS M.B. 291 7 09-30 06/94 18.62 38
FMBD First Mutual Bancorp of IL OTC Central IL Thrift 285 7 12-31 07/95 12.75 55
PFDC Peoples Bancorp of Auburn IN OTC Northeastern IN Thrift 281 6 09-30 07/87 20.62 49
FFED Fidelity Fed. Bancorp of IN OTC Southwestern IN Thrift 280 4 06-30 08/87 12.00 30
GFCO Glenway Financial Corp. of OH OTC Cincinnati OH Thrift 279 D 6 06-30 11/90 20.50 22
FNSC Financial Security Corp. of IL OTC Chicago IL Thrift 274 2 12-31 12/92 25.37 39
FBCV 1st Bancorp of Vincennes IN OTC Southwestern IN M.B. 273 3 06-30 04/87 26.00 17
SMFC Sho-Me Fin. Corp. of MO OTC Southwest MO Thrift 264 6 12-31 06/94 15.63 28
WFCO Winton Financial Corp. of OH OTC Cincinnati OH R.E. 262 4 09-30 08/88 12.25 24
FCBF FCB Fin. Corp. of Neenah WI OTC Eastern WI Thrift 256 6 03-31 09/93 17.50 44
OSBF OSB Fin. Corp. of Oshkosh WI OTC Eastern WI Thrift 254 7 12-31 06/92 22.75 26
CBK Citizens First Fin.Corp. of IL AMEX Central IL Thrift 252 P 6 12-31 05/96 10.00 28
FFOH Fidelity Financial of OH OTC Cincinnati OH Thrift 249 4 12-31 03/96 10.00 41
WAYN Wayne S&L Co., MHC of OH(46.7) OTC Central OH Thrift 249 6 03-31 06/93 20.50 31
DFIN Damen Fin. Corp. of Chicago IL OTC Chicago IL Thrift 235 4 11-30 10/95 11.62 46
LFSB LFS Bancrop of Lexington KY OTC Lexington KY Thrift 234 4 12-31 04/94 19.25 66
CRCL Circle Financial Corp.of OH OTC Cincinnati OH Thrift 229 8 06-30 08/91 33.84 24
CBIN Community Bank Shares of IN OTC Southeast IN Thrift 224 6 12-31 04/95 13.62 27
FFHS First Franklin Corp. of OH OTC Cincinnati OH Thrift 216 7 12-31 01/88 15.12 18
WCHI Workingmens Cap. Hldgs of IN OTC South Central IN Thrift 214 2 12-31 06/90 19.87 36
EFBI Enterprise Fed. Bancorp of OH OTC Cincinnati OH Thrift 208 D 5 09-30 10/94 14.25 30
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
- ------------------------------
OHSL OHSL Financial Corp. of OH OTC Cincinnati, OH Thrift 205 4 12-31 02/93 20.75 25
CBCO CB Bancorp of Michigan City IN OTC Northwest IN Thrift 205 3 03-31 12/92 17.25 20
CAPS Capital Savings Bancorp of MO OTC Central MO Thrift 203 7 06-30 12/93 18.00 19
MFBC MFB Corp. of Mishawaka IN OTC Northern IN Thrift 201 4 09-30 03/94 14.00 29
SBCN Suburban Bancorp. of OH OTC Cincinnati OH Thrift 197 8 06-30 09/93 14.50 21
WEFC Wells Fin. Corp. of Wells MN OTC Southcentral MN Thrift 196 7 12-31 04/95 11.25 25
MBLF MBLA Financial Corp. of MO OTC Northeast MO Thrift 195 2 06-30 06/93 23.75 33
LARK Landmark Bancshares of KS OTC Central KS Thrift 193 5 09-30 03/94 15.25 30
FFFD North Central Bancshares of IA OTC Central IA Thrift 191 4 12-31 03/96 10.25 41
GFED Guaranty FS&LA,MHC of MO(31.1) OTC Southwest MO Thrift 186 4 06-30 04/95 11.50 36
PULB Pulaski SB, MHC of MO (29.0) OTC St. Louis MO Thrift 179 5 09-30 05/94 14.00 29
MARN Marion Capital Holdings of IN OTC Central IN Thrift 179 2 06-30 03/93 20.00 40
MWFD Midwest Fed. Fin. Corp of WI OTC Central WI Thrift 178 9 12-31 07/92 16.00 26
FFBZ First Federal Bancorp of OH OTC Eastern OH Thrift 173 6 09-30 06/92 24.50 19
CMRN Cameron Fin. Corp. of MO OTC Northwest MO Thrift 172 3 09-30 04/95 14.00 40
MFFC Milton Fed. Fin. Corp. of OH OTC Southwest OH Thrift 172 2 09-30 10/94 12.87 30
LSBI LSB Bancorp of Lafayette IN OTC Central IN Thrift 163 3 12-31 02/95 15.75 15
SMBC Southern Missouri Bncrp of MO OTC Southeast MO Thrift 162 8 06-30 04/94 14.00 24
THIR Third Financial Corp. of OH OTC Piqua OH Thrift 156 4 09-30 03/93 31.25 36
SJSB SJS Bancorp of St. Joseph MI OTC Southwest MI Thrift 151 4 06-30 02/95 20.75 20
FFWC FFW Corporation of Wabash IN OTC Central IN Thrift 149 3 06-30 03/93 19.25 14
QCFB QCF Bancorp of Virginia MN OTC Northeast MN Thrift 146 2 06-30 04/95 14.00 25
JXSB Jcksnville SB,MHC of IL(43.3%) OTC Central IL Thrift 142 4 12-31 04/95 14.00 18
NEIB Northeast Indiana Bncrp of IN OTC Northeast IN Thrift 141 3 12-31 06/95 11.50 24
FBSI First Bancshares of MO OTC Southcentral MO Thrift 140 5 06-30 12/93 15.75 21
FFWD Wood Bancorp of OH OTC Northern OH Thrift 140 6 06-30 08/93 18.75 19
BWFC Bank West Fin. Corp. of MI OTC Southeast MI Thrift 139 2 06-30 03/95 10.75 25
FKKY Frankfort First Bancorp of KY OTC Frankfort KY Thrift 139 3 06-30 07/95 11.37 39
MWBI Midwest Bancshares, Inc. of IA OTC Southeast IA Thrift 137 5 12-31 11/92 25.75 9
MFCX Marshalltown Fin. Corp. of IA OTC Central IA Thrift 126 2 09-30 03/94 15.50 22
MIFC Mid Iowa Financial Corp. of IA OTC Central IA Thrift 119 6 09-30 10/92 6.25 11
GTPS Great American Bancorp of IL OTC East Central IL Thrift 118 D 3 09-30 06/95 13.75 25
NBSI North Bancshares of Chicago IL OTC Chicago IL Thrift 114 2 06-30 12/93 15.63 18
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- --------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ --------- ----------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
- ------------------------------
PTRS The Potters S&L Co. of OH OTC Northeast OH Thrift 114 5 12-31 12/93 16.25 9
ASBP ASB Financial Corp. of OH OTC Southern OH Thrift 112 1 06-30 04/95 15.00 26
HFFB Harrodsburg 1st Fin Bcrp of KY OTC Central KY Thrift 109 2 09-30 10/95 15.25 33
FFSL First Independence Corp. of KS OTC Southeast KS Thrift 102 1 09-30 10/93 17.75 10
BDJI First Fed. Bancorp. of MN OTC Northern MN Thrift 101 5 09-30 04/95 13.50 11
WCFB Webster CityFSB,MHC of IA(45.2 OTC Central IA Thrift 97 1 12-31 08/94 12.87 27
INCB Indiana Comm. Bank, SB of IN OTC Central IN Ret. 94 3 06-30 12/94 14.00 13
FSBS First Ashland Fin. Corp. of KY OTC Northeast KY Thrift 90 D 3 09-30 04/95 18.00 26
FFBI First Financial Bancorp of IL OTC Northern IL M.B. 89 2 12-31 10/93 15.50 7
FTSB Fort Thomas Fin. Corp. of KY OTC Northern KY Thrift 88 2 09-30 06/95 16.75 26
NWEQ Northwest Equity Corp. of WI OTC Northwest WI Thrift 86 3 03-31 10/94 10.25 10
CIBI Community Inv. Corp. of OH OTC NorthCentral OH Thrift 85 D 3 06-30 02/95 14.75 10
KYF Kentucky First Bancorp of KY AMEX Central KY Thrift 84 2 06-30 08/95 13.62 19
HFSA Hardin Bancorp of Hardin MO OTC Western MO Thrift 83 3 03-31 09/95 11.75 12
THR Three Rivers Fin. Corp. of MI AMEX Southwest MI Thrift 81 S 4 06-30 08/95 13.25 11
GFSB GFS Bancorp of Grinnell IA OTC Central IA Thrift 81 1 06-30 01/94 20.50 11
AMFC AMB Financial Corp. of IN OTC Northwest IN Thrift 81 4 12-31 04/96 10.00 11
PCBC Perry Co. Fin. Corp. of MO OTC EastCentral MO Thrift 77 D 1 09-30 02/95 17.25 15
LOGN Logansport Fin. Corp. of IN OTC Northern IN Thrift 76 1 12-31 06/95 12.75 17
SOBI Sobieski Bancorp of S. Bend IN OTC Northern IN Thrift 76 3 06-30 03/95 12.00 10
SFFC StateFed Financial Corp. of IA OTC Des Moines IA Thrift 74 2 06-30 01/94 16.00 13
FFDF FFD Financial Corp. of OH OTC Northeast OH Thrift 73 P 1 06-30 04/96 10.37 15
ATSB AmTrust Capital Corp. of IN OTC Northcentral IN Thrift 73 3 06-30 03/95 10.00 6
GWBC Gateway Bancorp of KY OTC Eastern KY Thrift 73 2 06-30 01/95 14.00 16
HZFS Horizon Fin'l. Services of IA OTC Central IA Thrift 72 3 06-30 06/94 15.50 7
HHFC Harvest Home Fin. Corp. of OH OTC Southwest OH Thrift 70 D 3 09-30 10/94 13.00 12
MIVI Miss. View Hold. Co. of MN OTC Central MN Thrift 70 1 09-30 03/95 11.25 11
CLAS Classic Bancshares of KY OTC Eastern KY Thrift 68 D 1 03-31 12/95 11.12 15
LXMO Lexington B&L Fin. Corp. of MO OTC West Central MO Thrift 61 P 1 09-30 06/96 9.75 12
NSLB NS&L Bancorp of Neosho MO OTC Southwest MO Thrift 59 2 09-30 06/95 12.87 11
CKFB CKF Bancorp of Danville KY OTC Central KY Thrift 59 1 12-31 01/95 20.00 19
MSBF MSB Financial Corp. of MI OTC Southcentral MI Thrift 56 2 06-30 02/95 16.75 11
MFSB Mutual Bancompany of MO OTC Central MO Thrift 53 1 06-30 02/95 21.00 7
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ----------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 20, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ---------------------------------- ------ ---------------- -------- ------ ------- ----- ----- ----- ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid-West Companies (continued)
- ------------------------------
RELI Reliance Bancshares Inc of WI (3) OTC Milwaukee WI Thrift 50 P 1 June 04/96 7.50 19
SHFC Seven Hills Fin. Corp. of OH OTC Cincinnati OH Thrift 46 3 06-30 12/93 14.50 8
HBBI Home Building Bancorp of IN OTC Southwest IN Thrift 42 2 09-30 02/95 17.69 6
CSBF CSB Financial Group Inc of IL OTC Centralia IL Thrift 41 1 09-30 10/95 9.00 9
LONF London Financial Corp. of OH OTC Central OH Thrift 38 1 09-30 04/96 10.50 6
JOAC Joachim Bancorp of MO OTC Eastern MO Thrift 37 1 03-31 12/95 12.75 10
New England Companies
- ---------------------
PBCT Peoples Bank, MHC of CT(32.3) (3) OTC Southwestern CT Div. 6,916 79 12-31 07/88 20.37 798
WBST Webster Financial Corp. of CT OTC Central CT Thrift 3,813 39 12-31 12/86 28.00 227
CFCX Center Fin. Corp of CT (3) OTC Western CT M.B. 3,670 36 12-31 08/86 20.87 302
PHBK Peoples Heritage Fin Grp of ME (3) OTC ME,NH Div. 3,302 76 12-31 12/86 20.12 343
SBOS Boston Bancorp of MA (3) OTC Eastern MA Thrift 1,715 D 7 10-31 11/83 42.00 221
EGFC Eagle Financial Corp. of CT OTC Western CT Thrift 1,429 23 09-30 02/87 23.50 106
DSBC DS Bancor Inc. of Derby CT (3) OTC Southwestern CT Thrift 1,248 22 12-31 12/85 31.37 95
ANDB Andover Bancorp, Inc. of MA (3) OTC Northeastern MA M.B. 1,142 10 12-31 05/86 25.75 109
SISB SIS Bank of Sprinfield MA (3) OTC Central MA Div. 1,135 20 12-31 02/95 16.87 96
WLDN Walden Bancorp of MA (3) OTC Eastern MA M.B. 1,019 16 04-30 12/85 18.75 100
MDBK Medford Savings Bank of MA (3) OTC Eastern MA Thrift 981 16 12-31 03/86 21.25 96
CFX Cheshire Fin. Corp. of NH (3) AMEX S.W. NH,MA M.B. 958 23 12-31 02/87 13.75 104
AFCB Affiliated Comm BC, Inc of MA OTC MA Thrift 938 13 12-31 / 16.62 84
FFES First FS&LA of E. Hartford CT OTC Central CT Thrift 933 12 12-31 06/87 17.00 44
FMLY Family Bancorp of Haverhill MA (3) OTC MA,NH Div. 887 21 12-31 11/86 24.12 99
MASB MassBank Corp. of Reading MA (3) OTC Eastern MA Thrift 859 14 12-31 05/86 33.25 91
EBCP Eastern Bancorp of NH OTC VT, NH M.B. 825 23 09-30 11/83 24.25 58
FESX First Essex Bancorp of MA (3) OTC MA,NH Div. 801 10 12-31 08/87 10.37 63
NSSB Norwich Financial Corp. of CT (3) OTC Southeastern CT Thrift 712 15 12-31 11/86 13.37 75
BFD BostonFed Bancorp of MA AMEX Boston MA M.B. 678 8 12-31 10/95 12.25 81
DIBK Dime Financial Corp. of CT (3) OTC Central CT Thrift 671 10 12-31 07/86 13.75 69
GROV GroveBank for Savings of MA (3) OTC Eastern MA Thrift 586 7 12-31 08/86 25.25 39
NSSY Norwalk Savings Society of CT (3) OTC Southwest CT Thrift 542 8 12-31 06/94 19.87 47
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
New England Companies (continued)
- ---------------------------------
FMCT Farmers & Mechanics Bank of CT (3) OTC Central CT Thrift 537 12 12-31 11/93 19.12 32
PBKB People's SB of Brockton MA (3) OTC Southeastern MA Thrift 533 9 12-31 10/86 10.00 33
BKC American Bank of Waterbury CT (3) AMEX Western CT Thrift 517 15 12-31 12/81 24.12 55
CBNH Community Bankshares Inc of NH (3) OTC Southcentral NH M.B. 517 5 06-30 05/86 17.37 42
SOSA Somerset Savings Bank of MA (3) OTC Eastern MA R.E. 510 5 12-31 07/86 1.50 25
ABBK Abington Savings Bank of MA (3) OTC Southeastern MA M.B. 478 7 12-31 06/86 14.50 27
FSBX Framingham SB of MA (3) OTC Eastern MA Thrift 478 9 12-31 10/86 4.25 59
SWCB Sandwich Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 424 11 04-30 07/86 19.37 36
PBNB Peoples Sav. Fin. Corp. of CT (3) OTC Central CT Thrift 406 8 12-31 08/86 20.50 39
BKCT Bancorp Connecticut of CT (3) OTC Central CT Thrift 403 3 12-31 07/86 19.56 53
PETE Primary Bank of NH (3) OTC Southern NH Ret. 393 8 12-31 10/93 12.25 24
MIDC Midconn Bank of Kensington CT (3) OTC Central CT Thrift 365 10 09-30 09/86 15.25 29
HSBK Hibernia SB of Quincy MA (3) OTC Eastern MA R.E. 355 5 12-31 09/86 14.75 23
WRNB Warren Bancorp of Peabody MA (3) OTC Eastern MA R.E. 355 6 12-31 07/86 12.50 46
LSBX Lawrence Savings Bank of MA (3) OTC Northeastern MA Thrift 324 6 12-31 05/86 5.37 23
CEBK Central Co-Op. Bank of MA (3) OTC Eastern MA Thrift 318 D 11 04-30 10/86 15.25 29
NMSB Newmil Bancorp. of CT (3) OTC Eastern CT Thrift 292 12 06-30 02/86 7.50 31
POBS Portsmouth Bank Shrs Inc of NH (3) OTC Southeastern NH Thrift 267 3 12-31 02/88 13.75 79
NHTB NH Thrift Bancshares of NH OTC Central NH Thrift 252 10 12-31 05/86 10.12 17
BTHL Bethel Bancorp. of ME (3) OTC Eastern ME Thrift 218 8 06-30 08/87 13.00 16
TBK Tolland Bank of CT (3) AMEX Northern CT Thrift 217 7 12-31 12/86 9.62 11
HIFS Hingham Inst. for Sav. of MA (3) OTC Eastern MA Thrift 179 4 12-31 12/88 14.50 19
BSBC Branford SB of CT (3) OTC New Haven CT R.E. 174 5 12-31 11/86 3.37 22
HPBC Home Port Bancorp, Inc. of MA (3) OTC Southeastern MA Thrift 167 2 12-31 08/88 13.75 25
IPSW Ipswich SB of Ipswich MA (3) OTC Northwest MA Thrift 134 4 12-31 05/93 10.50 12
KSBK KSB Bancorp of Kingfield ME (3) OTC Western ME M.B. 127 10 12-31 06/93 22.25 8
MFLR Mayflower Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 111 D 4 04-30 12/87 14.25 12
FCB Falmouth Co-Op Bank of MA (3) AMEX Southeast MA Thrift 88 2 09-30 03/96 10.25 15
NTMG Nutmeg FS&LA of CT OTC CT M.B. 85 3 12-31 / 7.50 5
MCBN Mid-Coast Bancorp of ME OTC Eastern ME Thrift 54 2 03-31 11/89 19.12 4
GLBK Glendale Co-op. Bank of MA (3) OTC Boston MA Thrift 36 D 1 04-30 01/94 17.50 4
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
WAMU Washington Mutual Inc. of WA (3) OTC WA,OR,ID,UT,MT Div. 22,344 246 12-31 03/83 30.00 2,160
WFSL Washington FS&LA of Seattle WA OTC Western US Thrift 4,929 87 09-30 11/82 21.56 918
STSA Sterling Financial Corp. of WA OTC WA,OR M.B. 1,498 41 06-30 / 14.00 76
IWBK Interwest SB of Oak Harbor WA OTC Western WA Div. 1,369 28 12-31 / 24.37 157
MSEA Metropolitan Bancorp of WA OTC Western WA R.E. 778 10 03-31 01/90 13.62 51
KFBI Klamath First Bancorp of OR OTC Southern OR Thrift 605 7 09-30 10/95 14.25 160
FWWB First Savings Bancorp of WA (3) OTC Central WA Thrift 595 D 15 03-31 11/95 15.00 151
HRZB Horizon Financial Corp. of WA (3) OTC Northwest WA Thrift 489 12 03-31 08/86 12.75 84
FMSB First Mutual SB of Bellevue WA (3) OTC Western WA M.B. 371 6 12-31 12/85 13.12 32
CASB Cascade SB of Everett WA OTC Seattle WA Thrift 326 6 06-30 08/92 20.00 33
RVSB Rvrview SB,FSB MHC of WA(40.3) OTC Southwest WA M.B. 210 9 03-31 10/93 16.00 34
South-East Companies
- --------------------
LFCT Leader Fin. Corp of Memphis TN OTC Tennessee M.B. 3,178 22 12-31 09/93 45.62 453
FFCH First Fin. Holdings Inc. of SC OTC CHARLESTON SC Div. 1,449 32 09-30 11/83 18.50 118
AMFB American Federal Bank of SC OTC Northwest SC Thrift 1,339 41 12/31 01/89 16.00 175
MGNL Magna Bancorp of MS OTC MS,AL M.B. 1,291 61 06-30 03/91 34.00 237
LIFB Life Bancorp of Norfolk VA OTC Southeast VA Thrift 1,205 17 12-31 10/94 14.12 147
FLFC First Liberty Fin. Corp. of GA OTC Georgia M.B. 982 29 9-30 12/83 22.12 88
HFNC HFNC Financial Corp. of NC OTC Charlotte NC Thrift 716 9 06-30 12/95 16.12 277
VFFC Virginia First Savings of VA OTC Petersburg VA M.B. 714 23 06-30 01/78 12.25 69
CNIT Cenit Bancorp of Norfolk VA OTC Southeastern VA Thrift 667 15 12-31 08/92 34.00 55
VABF Va. Beach Fed. Fin. Corp of VA OTC Southeast VA M.B. 625 11 12-31 11/80 7.62 38
ISBF ISB Financial Corp. of LA OTC SouthCentral LA Thrift 624 14 12-31 04/95 15.63 115
PALM Palfed, Inc. of Aiken SC OTC Southwest SC Thrift 624 16 12-31 12/85 12.62 66
EBSI Eagle Bancshares of Tucker GA OTC Atlanta GA Thrift 558 D 10 03-31 04/86 16.00 50
FFFC FFVA Financial Corp. of VA OTC Southern VA Thrift 518 11 12-31 10/94 16.75 91
CFCP Coastal Fin. Corp. of SC OTC SC Thrift 441 8 09-30 09/90 20.00 55
FSFC First So.east Fin. Corp. of SC OTC Northwest SC Thrift 359 11 06-30 10/93 17.87 73
TSH Teche Holding Company of LA AMEX Southern LA Thrift 346 8 09-30 04/95 13.25 54
FFRV Fid. Fin. Bkshrs. Corp. of VA OTC Southern VA Thrift 322 7 12-31 05/86 12.50 28
ESX Essex Bancorp of VA AMEX VA,NC M.B. 316 14 12-31 / 2.31 2
COOP Cooperative Bk.for Svgs. of NC OTC Eastern NC Thrift 314 16 03-31 08/91 17.25 26
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
South-East Companies (continued)
- --------------------------------
JEBC Jefferson Bancorp of Gretna LA OTC Southeast LA Thrift 265 6 12-31 08/94 22.50 49
SOPN First SB, SSB, Moore Co. of NC OTC Central NC Thrift 256 5 06-30 01/94 18.75 70
UFRM United FS&LA of Rocky Mount NC OTC Eastern NC M.B. 252 9 12-31 07/80 8.25 25
MERI Meritrust FSB of Thibodaux LA OTC Southeast LA Thrift 227 8 12-31 / 34.00 26
FLAG Flag Financial Corp of GA OTC Western GA M.B. 226 3 12-31 12/86 12.75 26
CFTP Community Fed. Bancorp of MS OTC Northeast MS Thrift 201 1 09-30 03/96 13.50 62
GSFC Green Street Fin. Corp. of NC OTC Southern NC Thrift 188 P 3 09-30 04/96 12.62 54
PLE Pinnacle Bank of AL AMEX Central AL Thrift 186 5 06-30 12/86 16.00 14
FTF Texarkana Fst. Fin. Corp of AR AMEX Southwest AR Thrift 163 5 09-30 07/95 16.37 32
NFSL Newnan SB, FSB of Newnan GA OTC Western GA M.B. 161 D 8 03-31 03/86 18.25 26
CFFC Community Fin. Corp. of VA OTC Central VA Thrift 160 3 03-31 03/88 21.00 27
FGHC First Georgia Hold. Corp of GA OTC Southeastern GA Thrift 142 6 09-30 02/87 7.00 14
PDB Piedmont Bancorp of NC AMEX Central NC Thrift 125 2 06-30 12/95 13.12 35
FFBS FFBS Bancorp of Columbus MS OTC Columbus MS Thrift 124 3 06-30 06/93 23.00 36
VAFD Valley FSB of Sheffield AL OTC Northern AL Thrift 119 4 09-30 10/87 32.00 12
BFSB Bedford Bancshares of VA OTC Southern VA Thrift 118 3 09-30 08/94 16.00 19
SSM Stone Street Bancorp of NC AMEX Central NC Thrift 116 2 12-31 04/96 16.87 31
SRN Southern Banc Company of AL AMEX Northeast AL Thrift 111 D 4 06-30 10/95 13.25 19
GSLC Guaranty Svgs & Loan FA of VA OTC Charltsvl VA M.B. 103 3 06-30 / 8.50 8
TWIN Twin City Bancorp of TN OTC Northeast TN Thrift 102 3 12-31 01/95 16.00 14
KSAV KS Bancorp of Kenly NC OTC Central NC Thrift 90 3 12-31 12/93 18.00 12
SZB SouthFirst Bancshares of AL AMEX Central AL Thrift 89 2 09-30 02/95 12.00 10
CZF Citisave Fin. Corp. of LA AMEX Baton Rouge LA Thrift 80 5 12-31 07/95 15.75 15
CCFH CCF Holding Company of GA OTC Atlanta GA Thrift 79 3 09-30 07/95 11.50 13
SSB Scotland Bancorp of NC AMEX Thrift 70 1 09-30 04/96 12.12 22
SCCB S. Carolina Comm. Bnshrs of SC OTC Central SC Thrift 44 1 06-30 07/94 16.50 12
South-West Companies
- --------------------
CBSA Coastal Bancorp of Houston TX OTC Houston TX M.B. 2,807 40 12-31 / 18.62 92
FBHC Fort Bend Holding Corp. of TX OTC Eastcentral TX M.B. 242 D 4 03-31 06/93 17.75 15
JXVL Jacksonville Bancorp of TX OTC East Central TX Thrift 213 6 09-30 04/96 10.12 27
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
June 10, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------ ----------------------------------- ------ ----------------- -------- ------ ------- ---- ----- ------ ------
($Mil) ($) ($Mil)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
South-West Companies (continued)
- --------------------------------
LBFI L&B Financial of S. Springs TX OTC Northeast TX Thrift 143 5 06-30 09/94 16.50 26
LOAN Horizon Bancorp, Inc of TX (3) OTC Austin TX R.E. 127 D 7 04-30 / 10.50 15
FSBC First SB, FSB of Clovis NM OTC Eastern NM Thrift 115 3 12-31 08/86 5.50 4
ETFS East Texas Fin. Serv. of TX OTC Northeast TX Thrift 115 2 09-30 01/95 14.75 18
GUPB GFSB Bancorp of Gallup NM OTC Northwest NM Thrift 70 1 06-30 06/95 14.00 13
Western Companies (Excl CA)
- ---------------------------
FFBA First Colorado Bancorp of Co OTC Denver CO Thrift 1,493 25 12-31 01/96 13.25 269
WSTR WesterFed Fin. Corp. of MT OTC MT Thrift 588 18 06-30 01/94 14.37 63
GBCI Glacier Bancorp of MT OTC Western MT Div. 398 13 06-30 03/84 21.75 73
SFBM Security Bancorp of MT OTC Southcentral MT Thrift 360 16 06-30 11/86 20.50 30
UBMT United SB, FA of MT OTC Central MT Thrift 105 4 12-31 09/86 18.25 22
TRIC Tri-County Bancorp of WY OTC Southeastern WY Thrift 73 2 12-31 09/93 18.50 12
MORG Morgan Financial Corp. of CO OTC Northeast CO Thrift 72 1 06-30 01/93 12.25 10
CRZY Crazy Woman Creek Bncorp of WY OTC Northeast WY Thrift 47 1 09-30 03/96 10.37 11
</TABLE>
Other Areas
- -----------
NOTES: (1) Or most recent date available (M=March, S=September, D=December,
J=June, E=Estimated, and P=Pro Forma)
(2) Operating strategies are: Thrift=Traditional Thrift, M.B.=Mortgage
Banker, R.E.=Real Estate Developer, Div.=Diversified, and Ret.=Retail
Banking.
(3) FDIC savings bank.
Source: Corporate offering circulars, SNL Securities Quarterly Thrift Report,
and financial reports of publicly Traded Thrifts.
Date of Last Update: 06/10/96
<PAGE>
EXHIBIT III-2
Missouri Thrifts
<PAGE>
RP FINANCIAL, LC.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-2
Market Pricing Comparatives
Prices As of June 14, 1996
<TABLE>
<CAPTION>
Per Share Data
Market ----------------
Capitalization Book Pricing Ratios(3)
--------------- ---------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- --------------------- -------- ------ -------- ------- ------- ------- ----- -------- ------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 17.21 119.16 1.25 16.52 14.29 104.98 13.13 108.21 15.14
State of MO 16.68 78.37 1.12 15.60 16.68 108.93 16.23 111.86 16.62
Comparable Group Average 14.04 18.13 0.79 15.32 17.51 94.26 17.80 94.28 17.77
Mid-West Companies 14.04 18.13 0.79 15.32 17.51 94.26 17.80 94.28 17.77
Comparable Group
- ----------------
Mid-West Companies
- -------------------
CNSB CNS Bancorp of MO 12.00 19.84 0.45 14.07 NM 85.29 19.68 85.29 NM
CMRN Cameron Fin. Corp. of MO 13.50 38.48 0.97 16.06 13.92 84.06 22.31 84.06 14.06
- -------------------------------------------------------------------------------------------------------------------
CAPS Capital Savings Bancorp of MO 18.00 18.70 1.75 20.34 10.29 88.50 9.23 88.50 10.29
- -------------------------------------------------------------------------------------------------------------------
FBSI First Bancshares of MO 15.50 20.18 0.80 18.26 19.38 84.88 14.37 85.07 19.62
- -------------------------------------------------------------------------------------------------------------------
GFED Guaranty FS&LA,MHC of MO(31.1) 11.62 9.04 0.58 8.69 20.03 133.72 19.57 133.72 NM
JOAC Joachim Bancorp of MO 12.25 9.31 0.28 14.15 NM 86.57 25.32 86.57 NM
LXMO Lexington B&L Fin. Corp. of MO 10.00 12.65 0.62 14.27 16.13 70.08 20.62 70.08 16.39
MBLF MBLA Financial Corp. of MO(7) 24.00 32.93 1.00 20.67 24.00 116.11 16.88 116.11 24.00
NSLB NS&L Bancorp of Neosho MO 12.87 11.43 0.59 15.62 21.81 82.39 19.35 82.39 23.40
- -------------------------------------------------------------------------------------------------------------------
PCBC Perry Co. Fin. Corp. of MO 17.50 14.98 0.88 18.84 19.89 92.89 19.38 92.89 19.89
- -------------------------------------------------------------------------------------------------------------------
PULB Pulaski SB, MHC of MO (29.0) 14.75 8.85 0.73 10.82 20.21 136.32 17.22 136.32 21.38
SMFC Sho-Me Fin. Corp. of MO 15.75 28.68 1.08 17.36 14.58 90.73 10.87 90.73 14.72
- -------------------------------------------------------------------------------------------------------------------
SMBC Southern Missouri Bncrp of MO 14.75 25.43 0.78 15.41 18.91 95.72 15.70 95.72 20.21
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Amount/ Payout Total Equity/ NPAs/ Reported Core
---------------- -------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------- ------ ------- ------- ------ ------- ------- ------- ------- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 0.35 1.98 25.53 1,297 13.25 0.95 0.87 8.08 0.81 7.29
State of MO 0.40 2.46 23.72 784 16.72 0.75 0.97 7.45 0.92 7.32
Comparable Group Average 0.34 2.45 21.58 137 19.64 0.47 0.96 5.40 0.89 4.97
Mid-West Companies 0.34 2.45 21.58 137 19.64 0.47 0.96 5.40 0.89 4.97
Comparable Group
- ----------------
Mid-West Companies
- -------------------
CNSB CNS Bancorp of MO 0.00 0.00 0.00 101 23.07 0.70 0.74 3.20 0.62 2.70
CMRN Cameron Fin. Corp. of MO 0.28 2.07 28.87 172 26.54 0.79 1.61 5.79 1.59 5.73
CAPS Capital Savings Bancorp of MO 0.36 2.00 20.57 203 10.43 0.20 0.95 8.92 0.95 8.92
FBSI First Bancshares of MO 0.20 1.29 25.00 140 16.92 0.43 0.78 4.33 0.77 4.27
GFED Guaranty FS&LA,MHC of MO(31.1) 0.64 5.51 NM 186 14.64 0.07 1.02 7.29 0.55 3.89
JOAC Joachim Bancorp of MO 0.50 4.08 NM 37 29.24 0.01 0.65 3.14 0.65 3.14
LXMO Lexington B&L Fin. Corp. of MO 0.00 0.00 0.00 61 29.42 1.15 1.28 4.34 1.26 4.27
MBLF MBLA Financial Corp. of MO(7) 0.40 1.67 40.00 195 14.54 0.33 0.70 4.81 0.70 4.81
NSLB NS&L Bancorp of Neosho MO 0.50 3.89 NM 59 23.49 0.18 0.93 4.27 0.87 3.98
PCBC Perry Co. Fin. Corp. of MO 0.30 1.71 34.09 77 20.86 0.04 1.00 5.36 1.00 5.36
PULB Pulaski SB, MHC of MO (29.0) 0.80 5.42 NM 179 12.63 0.67 0.84 6.93 0.79 6.55
SMFC Sho-Me Fin. Corp. of MO 0.00 0.00 0.00 264 11.98 NA 0.83 6.18 0.82 6.12
SMBC Southern Missouri Bncrp of MO 0.50 3.39 64.10 162 16.40 0.97 0.88 5.01 0.82 4.69
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/CORE = Price to estimated core earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month earnings and average equity and assets balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, Inc.
<PAGE>
EXHIBIT III-3
Thrifts in Contiguous States
<PAGE>
RP FINANCIAL, LC.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-3
Market Pricing Comparatives
Prices As of June 14, 1996
<TABLE>
<CAPTION>
Per Share Data
Market ----------------
Capitalization Book Pricing Ratios(3)
--------------- ---------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
- ---------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 17.21 119.16 1.25 16.52 14.29 104.98 13.13 108.21 15.14
State of MO 16.68 78.87 1.12 15.60 16.68 108.93 16.23 111.86 16.62
Comparable Group Average 16.38 11.69 1.27 17.35 12.51 101.68 17.49 101.68 12.60
Mid-West Companies 16.88 11.69 1.27 17.35 12.51 101.68 17.49 101.68 12.60
Comparable Group
- -----------------
Mid-West Companies
- -------------------
FFSL First Independence Corp. of KS 17.75 10.35 1.95 22.03 9.10 80.57 10.18 80.57 9.10
- -----------------------------------------------------------------------------------------------------------------
GFSB GFS Bancorp of Grinnell IA 20.25 10.43 1.57 18.91 12.90 107.09 12.89 107.09 13.15
- -----------------------------------------------------------------------------------------------------------------
SFFC StateFed Financial Corp. of IA 16.00 13.17 1.03 18.13 15.53 88.25 17.75 88.25 15.53
- -----------------------------------------------------------------------------------------------------------------
WCFB Webster CityFSB,MHC of IA(45.2 13.50 12.83 0.51 10.32 NM 130.81 29.15 130.81 NM
<CAPTION>
Dividends(4) Financial Characteristics(6)
------------------- -------------------------------------------------------
Amount/ Payout Total Equity/ NPAs/ Reported Core
---------------- ------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------ ------ -------- ------ ------- ------- ------- ------- ------- -------
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 0.35 1.98 25.53 1,297 13.25 0.95 0.87 8.08 0.81 7.29
State of MO 0.40 2.46 23.72 784 16.72 0.75 0.97 7.45 0.92 7.32
Comparable Group Average 0.48 3.04 26.15 88 16.77 1.00 1.13 6.95 1.12 6.91
Mid-West Companies 0.48 3.04 26.15 88 16.77 1.00 1.13 6.95 1.12 6.91
Comparable Group
- -----------------
Mid-West Companies
- ------------------
FFSL First Independence Corp. of KS 0.40 2.25 20.51 102 12.64 0.96 1.14 8.56 1.14 8.56
- ------------------------------------------------------------------------------------------------------------------------
GFSB GFS Bancorp of Grinnell IA 0.30 1.48 19.11 81 12.04 0.97 1.09 8.45 1.06 8.29
- ------------------------------------------------------------------------------------------------------------------------
SFFC StateFed Financial Corp. of IA 0.40 2.50 38.83 74 20.11 NA 1.18 5.80 1.18 5.80
- ------------------------------------------------------------------------------------------------------------------------
WCFB Webster CityFSB,MHC of IA(45.2 0.80 5.93 NM 97 22.28 1.08 1.10 5.00 1.10 5.00
</TABLE>
(1) Average of High/Low or Bid/Ask price per share.
(2) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB =
Price to tangible book value; and P/CORE = Price to estimated core earnings.
(4) Indicated twelve month dividend, based on last quarterly dividend declared.
(5) Indicated dividend as a percent of trailing twelve month earnings.
(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month earnings and average equity and assets balances.
(7) Excludes from averages those companies the subject of actual or rumored
acquisition activities or unusual operating characteristics.
Source: Corporate reports, offering circulars, and RP Financial, Inc.
calculations. The information provided in this report has been obtained
from sources we believe are reliable, but we cannot guarantee the
accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, Inc.
<PAGE>
EXHIBIT IV-1
Stock Prices:
As of June 7, 1996
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
------------------------ -------------------------------------------------
Shares Market 52 Week (1) % Change From
--------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHC)
- ----------------------------------------------
SAIF-Insured Thrifts(322) 17.33 5,867 125.7 18.77 14.11 17.26 0.38 132.74 1.53
NYSE Traded Companies(12) 28.39 46,329 1,312.3 30.65 21.28 28.64 -0.97 183.98 2.55
AMEX Traded Companies(17) 13.84 3,282 49.0 14.97 12.32 13.91 -0.40 206.86 1.35
NASDAQ Listed OTC Companies(293) 17.04 4,204 76.9 18.46 13.90 16.95 0.49 125.02 1.48
California Companies(25) 19.30 23,611 604.6 20.87 14.93 19.30 0.31 51.51 3.87
Florida Companies(10) 13.03 5,174 58.6 14.72 14.52 12.97 0.23 68.90 3.13
Mid-Atlantic Companies(63) 16.81 5,737 104.7 18.28 13.88 16.69 0.65 114.42 1.19
Mid-West Companies(149) 17.92 3,827 84.7 19.28 14.55 17.84 0.51 157.61 1.09
New England Companies(9) 17.64 3,542 70.4 19.65 14.89 17.60 -0.26 178.79 -2.08
North-West Companies(6) 17.42 11,909 232.2 18.18 13.05 17.97 -2.48 73.18 8.15
South-East Companies(45) 16.45 3,530 57.9 18.10 13.57 16.37 0.36 179.05 2.26
South-West Companies(7) 13.45 1,879 28.2 14.96 11.87 13.46 0.17 -18.52 -6.18
Western Companies (Excl CA)(8) 16.10 4,158 61.1 16.88 13.47 16.16 -0.35 221.28 5.07
Thrift Strategy(248) 16.21 3,484 59.7 17.64 13.55 16.14 0.44 102.02 0.84
Mortgage Banker Strategy(39) 21.27 11,484 324.4 22.68 16.16 21.17 0.07 216.05 4.31
Real Estate Strategy(16) 18.50 6,379 122.3 19.56 13.30 18.55 -0.06 97.09 4.44
Diversified Strategy(15) 25.50 29,926 697.3 27.46 19.60 25.52 -0.08 191.69 3.07
Retail Banking Strategy(4) 12.03 3,261 41.7 13.72 10.15 11.78 2.80 176.80 -3.72
Companies Issuing Dividends(244) 18.60 6,249 143.0 20.19 15.10 18.54 0.33 152.71 1.34
Companies Without Dividends(78) 13.37 4,648 72.1 14.37 11.04 13.31 0.53 53.63 2.28
Equity/Assets Less than 6%(29) 16.92 19,811 421.3 18.20 12.83 16.77 0.80 76.78 4.37
Equity/Assets 6-12%(147) 19.42 5,433 134.8 21.10 15.31 19.39 0.12 154.44 2.02
Equity/Assets Greater Than than 12%(146) 15.34 3,506 57.5 16.59 13.18 15.26 0.55 95.43 0.30
Converted Last 3 Mths (no MHC)(20) 11.26 3,631 41.7 11.90 10.62 11.16 0.97 0.00 -2.25
Actively Traded Companies(53) 23.15 17,267 440.5 24.98 18.29 23.07 0.46 157.85 3.28
Market Value Below $20 Million(83) 14.06 962 12.6 15.51 12.05 14.05 0.06 85.52 -2.54
Holding Company Structure(275) 17.77 5,929 132.5 19.25 14.60 17.70 0.44 125.71 1.11
Assets Over $1 Billion(61) 24.57 19,220 482.3 26.37 18.86 24.54 0.25 155.85 4.12
Assets $500 Million-$1 Billion(56) 17.58 5,025 78.2 18.81 14.13 17.40 0.91 175.99 3.05
Assets $250-$500 Million(79) 15.87 2,642 38.6 17.36 13.40 15.79 0.35 99.16 1.81
Assets less than $250 Million(126) 14.39 1,414 19.3 15.72 12.10 14.37 0.21 78.59 -0.97
Goodwill Companies(133) 19.63 9,664 226.5 21.28 15.43 19.54 0.57 155.93 3.45
Non-Goodwill Companies(189) 15.65 3,114 52.6 16.95 13.16 15.62 0.24 89.83 -0.01
Acquirors of FSLIC Cases(14) 24.87 34,581 976.9 26.66 18.96 24.99 -0.25 197.38 -0.92
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHC)
- ---------------------------------------------
SAIF-Insured Thrifts(322) 1.28 1.15 16.74 16.31 164.37
NYSE Traded Companies(12) 2.35 1.96 21.40 20.05 355.85
AMEX Traded Companies(17) 0.79 0.75 15.14 14.97 104.13
NASDAQ Listed OTC Companies(293) 1.26 1.13 16.63 16.22 159.37
California Companies(25) 1.03 0.86 18.35 17.86 280.83
Florida Companies(10) 1.23 0.77 12.43 12.14 175.66
Mid-Atlantic Companies(63) 1.38 1.31 16.38 15.79 167.39
Mid-West Companies(149) 1.32 1.17 17.52 17.21 150.12
New England Companies(9) 1.56 1.31 18.76 17.22 254.16
North-West Companies(6) 1.30 1.20 13.13 12.35 171.31
South-East Companies(45) 1.11 1.06 14.72 14.44 122.20
South-West Companies(7) 1.14 1.07 16.25 15.66 213.08
Western Companies (Excl CA)(8) 1.07 1.00 16.40 16.00 113.11
Thrift Strategy(248) 1.09 1.03 16.56 16.21 143.76
Mortgage Banker Strategy(39) 2.00 1.43 17.48 16.54 250.48
Real Estate Strategy(16) 1.64 1.61 16.59 16.29 202.91
Diversified Strategy(15) 2.00 1.97 18.72 18.22 236.99
Retail Banking Strategy(4) 1.13 0.86 13.56 13.05 158.37
Companies Issuing Dividends(244) 1.42 1.27 17.41 16.91 168.32
Companies Without Dividends(78) 0.83 0.75 14.56 14.44 152.15
Equity/Assets Less than 6%(29) 1.39 1.09 14.29 13.44 291.39
Equity/Assets 6-12%(147) 1.68 1.47 17.33 16.62 210.91
Equity/Assets Greater than 12%(146) 0.86 0.84 16.65 16.58 93.12
Converted Last 3 Mths (no MHC)(20) 0.47 0.49 14.58 14.57 67.09
Actively Traded Companies(53) 1.99 1.87 18.69 17.91 251.89
Market Value Below $20 Million(83) 1.05 0.83 16.21 16.14 133.60
Holding Company Structure(275) 1.28 1.15 17.27 16.83 163.56
Assets Over $1 Billion(61) 2.00 1.82 20.00 18.71 275.21
Assets $500 Million-$1 Billion(56) 1.34 1.24 16.25 15.78 174.93
Assets $250-$500 Million(79) 1.23 0.97 15.81 15.48 154.89
Assets less than $250 Million(125) 0.91 0.86 15.87 15.84 108.31
Goodwill Companies(133) 1.54 1.38 17.40 16.38 216.23
Non-Goodwill Companies(189) 1.08 0.98 16.26 16.26 126.77
Acquirors of FSLIC Cases(14) 2.19 1.93 18.94 17.75 297.22
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public
(non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
--------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
- --------------------------------------------
BIF-Insured Thrifts(71) 16.54 6,942 121.5 17.96 12.99 16.49 0.20 98.59 4.61
NYSE Traded Companies(3) 13.69 53,098 700.8 14.25 10.44 13.87 -1.27 123.54 10.76
AMEX Traded Companies(4) 14.72 3,115 47.7 16.69 13.16 14.44 1.86 28.64 -5.17
NASDAQ Listed OTC Companies(64) 16.76 5,591 106.4 18.18 13.07 16.73 0.14 102.49 4.92
California Companies(2) 11.13 5,155 64.2 11.88 7.88 11.38 -2.06 216.67 9.48
Mid-Atlantic Companies(19) 18.80 10,955 171.8 20.41 15.06 18.70 0.39 75.79 1.33
Mid-West Companies(1) 7.87 2,562 20.2 8.50 7.50 7.50 4.93 0.00 0.00
New England Companies(44) 16.01 3,644 54.2 17.39 12.47 15.97 0.19 109.50 5.75
North-West Companies(4) 17.51 22,775 598.8 19.28 13.85 17.72 -1.07 41.36 2.13
South-West Companies(1) 10.75 1,387 14.9 11.50 7.50 10.50 2.38 0.00 19.44
Thrift Strategy(44) 16.41 3,552 54.0 17.76 13.10 16.34 0.28 96.54 5.86
Mortgage Banker Strategy(11) 18.15 15,785 238.1 19.54 14.17 18.16 0.19 138.65 4.56
Real Estate Strategy(7) 16.10 3,715 70.0 17.10 11.27 16.15 -0.75 138.17 10.62
Diversified Strategy(7) 16.10 21,376 482.8 18.14 12.17 16.04 0.48 39.06 -5.23
Retail Banking Strategy(2) 14.50 1,330 17.9 17.13 13.13 14.38 0.76 16.56 -6.80
Companies Issuing Dividends(50) 18.67 5,716 123.2 20.19 14.59 18.61 0.26 103.18 5.53
Companies Without Dividends(21) 11.59 9,782 117.7 12.81 9.30 11.58 0.07 76.78 2.09
Equity/Assets Less Than 6%(8) 11.33 23,161 285.7 12.59 8.35 11.44 -1.04 67.51 -2.77
Equity/Assets 6-12%(51) 17.19 5,331 108.7 18.74 13.47 17.10 0.46 105.10 5.76
Equity/Assets Greater Than 12%(12) 16.58 4,782 83.2 17.57 13.53 16.68 -0.27 -6.48 3.25
Converted Last 3 Mths (no MHC)(3) 9.44 3,235 31.0 10.21 9.27 9.33 1.45 0.00 0.00
Actively Traded Companies(30) 17.70 11,015 208.8 18.95 13.90 17.66 0.34 120.05 4.69
Market Value Below $20 Million(11) 13.84 982 12.5 14.73 10.58 13.87 0.08 81.45 8.38
Holding Company Structure(45) 17.09 6,768 135.5 18.55 13.58 17.08 -0.02 102.66 5.55
Assets Over $1 Billion(17) 22.45 19,874 397.4 23.79 16.63 22.52 -0.40 96.13 6.06
Assets $500 Million-$1 Billion(17) 18.94 4,578 77.0 20.42 15.54 18.72 1.33 125.45 0.24
Assets $250-$500 Million(22) 13.27 3,576 38.8 15.08 10.80 13.18 0.15 93.15 3.80
Assets less than $250 Million(15) 13.14 1,567 15.9 14.08 10.13 13.20 -0.22 75.56 8.94
Goodwill Companies(35) 18.17 9,700 185.7 19.87 14.48 18.02 0.87 104.95 3.91
Non-Goodwill Companies(36) 14.96 4,270 59.4 16.12 11.55 15.01 -0.44 88.69 5.36
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages, Bif-Insured Thrifts(no MHC)
- --------------------------------------------
BIF-Insured Thrifts(71) 1.43 1.36 15.26 14.77 176.07
NYSE Traded Companies(3) 0.52 0.64 12.58 12.51 232.41
AMEX Traded Companies(4) 1.14 0.71 14.49 13.78 150.26
NASDAQ Listed OTC Companies(64) 1.49 1.43 15.41 14.92 175.90
California Companies(2) 0.64 0.55 11.42 11.41 182.68
Mid-Atlantic Companies(19) 1.50 1.47 16.97 16.80 190.76
Mid-West Companies(1) 0.29 0.29 11.06 11.06 19.67
New England Companies(44) 1.48 1.38 15.06 14.38 178.02
North-West Companies(4) 1.43 1.42 14.17 13.64 148.84
South-West Companies(1) 1.24 0.97 7.91 7.64 91.48
Thrift Strategy(44) 1.40 1.33 15.72 15.26 166.23
Mortgage Banker Strategy(11) 1.55 1.54 16.29 15.55 229.21
Real Estate Strategy(7) 1.46 1.34 12.71 12.67 124.13
Diversified Strategy(7) 1.86 1.69 12.78 12.04 186.36
Retail Banking Strategy(2) 0.19 0.20 16.33 15.86 258.61
Companies Issuing Dividends(50) 1.71 1.63 16.52 15.89 194.35
Companies Without Dividends(21) 0.80 0.73 12.33 12.18 133.72
Equity/Assets 6%(8) 0.92 0.79 9.66 9.56 180.00
Equity/Assets 6-12%(51) 1.61 1.52 15.44 14.80 193.50
Equity/Assets Less Than12%(12) 0.93 0.94 17.77 17.77 91.78
Converted Last 3 Mths (no MHC)(3) 0.34 0.36 13.18 13.18 43.07
Actively Traded Companies(30) 1.58 1.56 16.07 15.28 197.35
Market Value Below $20 Million(11) 1.19 1.07 15.01 14.46 175.71
Holding Company Structure(45) 1.52 1.48 15.60 15.08 167.99
Assets Over $1 Billion(17) 2.04 1.98 18.17 17.50 236.53
Assets $500 Million-$1 Billion(17) 1.66 1.49 17.23 16.77 193.64
Assets $250-$500 Million(22) 1.09 1.06 12.80 12.36 143.09
Assets less than $250 Million(15) 1.12 1.04 13.97 13.57 147.21
Goodwill Companies(35) 1.57 1.44 16.35 15.36 215.23
Non-Goodwill Companies(36) 1.30 1.28 14.20 14.20 138.13
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public
(non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
---------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- ---------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 15.96 5,017 24.2 18.09 12.44 16.08 -0.50 107.50 -4.31
BIF-Insured Thrifts(2) 16.19 21,219 135.4 18.06 12.32 15.19 4.91 184.24 0.54
NASDAQ Listed OTC Companies(21) 15.98 6,637 35.3 18.09 12.43 15.99 0.04 133.08 -3.83
Florida Companies(3) 18.08 5,505 45.3 21.50 14.55 18.42 -1.03 0.00 -11.71
Mid-Atlantic Companies(9) 14.11 7,692 26.4 16.56 11.52 14.22 -0.73 57.50 -6.42
Mid-West Companies(7) 16.45 1,911 11.8 17.80 12.31 16.34 0.88 157.50 -1.56
New England Companies(1) 22.37 39,166 264.3 23.12 15.25 20.37 9.82 184.24 17.74
North-West Companies(1) 15.00 2,155 11.8 17.00 11.36 16.00 -6.25 0.00 3.16
Thrift Strategy(18) 15.68 5,079 23.9 17.87 12.33 15.74 -0.15 107.50 -5.41
Mortgage Banker Strategy(2) 15.00 2,155 11.8 17.00 11.36 16.00 -6.25 0.00 3.16
Diversified Strategy(1) 22.37 39,166 264.3 23.12 15.25 20.37 9.82 184.24 17.74
Companies Issuing Dividends(21) 15.98 6,637 35.3 18.09 12.43 15.99 0.04 133.08 -3.83
Equity/Assets Less Than 6%(1) 14.75 1,610 11.0 17.25 11.00 15.75 -6.35 0.00 -7.06
Equity/Assets 6-12%(13) 17.50 8,081 46.2 19.73 13.29 17.53 -0.18 133.08 -4.01
Equity/Assets Greater Than 12%(7) 13.55 4,880 20.2 15.39 11.14 13.37 1.33 0.00 -3.05
Actively Traded Companies(1) 15.75 6,512 31.5 17.50 12.50 16.00 -1.56 57.50 -4.55
Market Value Below $20 Million(1) 14.00 1,250 7.8 14.25 10.50 14.00 0.00 0.00 0.94
Holding Company Structure(1) 15.75 6,512 31.5 17.50 12.50 16.00 -1.56 57.50 -4.55
Assets Over $1 Billion(4) 17.04 24,584 115.8 19.04 13.29 16.33 3.43 184.24 -0.11
Assets $500 Million-$1 Billion(6) 16.44 5,826 38.6 19.42 13.34 16.65 -0.77 57.50 -7.79
Assets $250-$500 Million(3) 18.08 2,255 15.9 20.87 13.75 18.50 -2.71 157.50 -4.77
Assets less than $250 Million(8) 14.45 2,159 10.0 15.69 10.92 14.42 0.40 0.00 -1.90
Goodwill Companies(10) 16.57 11,223 56.0 18.50 12.72 16.53 -0.12 133.08 -1.48
Non-Goodwill Companies(11) 15.50 2,885 18.4 17.75 12.18 15.54 0.17 0.00 -5.74
MHC Institutions(21) 15.98 6,637 35.3 18.09 12.43 15.99 0.04 133.08 -3.83
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- ---------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 0.85 0.83 13.16 12.91 126.55
BIF-Insured Thrifts(2) 1.13 0.94 11.49 11.49 124.34
NASDAQ Listed OTC Companies(21) 0.88 0.84 13.00 12.77 126.33
Florida Companies(3) 1.29 1.26 14.73 14.68 145.72
Mid-Atlantic Companies(9) 0.56 0.62 12.15 11.77 107.34
Mid-West Companies(7) 0.87 0.79 13.39 13.37 136.71
New England Companies(1) 1.90 1.53 14.12 14.12 176.59
North-West Companies(1) 1.21 1.09 10.71 9.48 97.22
Thrift Strategy(18) 0.80 0.79 13.06 12.88 125.16
Mortgage Banker Strategy(2) 1.21 1.09 10.71 9.48 97.22
Diversified Strategy(1) 1.90 1.53 14.12 14.12 176.59
Companies Issuing Dividends(21) 0.88 0.84 13.00 12.77 126.33
Equity/Assets Less Than 6%(1) 1.23 1.26 13.64 13.64 229.43
Equity/Assets 6-12%(13) 0.96 0.96 14.20 13.92 148.90
Equity/Assets Greater Than 12%(7) 0.68 0.58 10.84 10.68 72.92
Actively Traded Companies(1) 1.24 1.19 13.98 12.14 147.32
Market Value Below $20 Million(1) 0.48 0.39 13.41 13.41 113.76
Holding Company Structure(1) 1.24 1.19 13.98 12.14 147.32
Assets Over $1 Billion(4) 1.12 0.99 11.88 11.56 121.22
Assets $500 Million-$1 Billion(6) 1.04 1.06 14.49 14.12 143.41
Assets $250-$500 Million(3) 1.21 1.18 15.94 15.90 187.55
Assets less than $250 Million(8) 0.54 0.51 11.19 11.04 92.49
Goodwill Companies(10) 1.08 0.95 13.16 12.65 128.21
Non-Goodwill Companies(11) 0.71 0.76 12.87 12.87 124.80
MHC Institutions(21) 0.88 0.84 13.00 12.77 126.33
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
(9) For MHC institutions, market value reflects share price multiplied by public
(non-MHC) shares.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
--------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- ---------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 26.62 112,512 2,995.1 27.75 21.00 26.50 0.45 41.97 0.45
CAL CalFed Inc. of Los Angeles CA 18.37 49,313 905.9 19.00 12.37 18.62 -1.34 -9.01 16.63
CSA Coast Savings Financial of CA 32.62 18,583 606.2 34.62 19.37 33.37 -2.25 182.18 -5.78
CFB Commercial Federal Corp. of NE 38.62 15,067 581.9 38.87 27.12 38.12 1.31 946.61 2.30
DME Dime Savings Bank, FSB of NY* 13.12 98,847 1,296.9 13.25 9.87 13.12 0.00 30.42 12.91
DSL Downey Financial Corp. of CA 20.75 16,973 352.2 24.05 16.79 21.62 -4.02 21.06 -4.60
FRC First Republic Bancorp of CA* 14.25 7,349 104.7 15.25 11.00 14.62 -2.53 216.67 8.61
FED FirstFed Fin. Corp. of CA 17.50 10,624 185.9 18.50 12.37 17.25 1.45 8.36 23.94
GLN Glendale Fed. Bk, FSB of CA 18.50 44,085 815.6 19.00 12.37 18.75 -1.33 13.85 4.99
GDW Golden West Fin. Corp. of CA 54.50 58,623 3,195.0 56.25 44.37 54.62 -0.22 108.09 -1.36
GWF Great Western Fin. Corp. of CA 23.75 137,205 3,258.6 27.12 20.25 23.50 1.06 36.73 -6.39
GPT GreenPoint Fin. Corp. of NY(8)* 29.37 52,457 1,540.7 30.50 22.44 29.75 -1.28 N.A. 9.79
SFB Standard Fed. Bancorp of MI 38.12 31,289 1,192.7 43.12 31.87 38.87 -1.93 309.45 -3.18
TCB TCF Financial Corp. of MN 33.12 35,835 1,186.9 37.62 22.94 33.62 -1.49 399.55 0.00
WES Westcorp Inc. of Orange CA 18.25 25,836 471.5 21.91 14.52 18.87 -3.29 148.98 3.58
AMEX Traded Companies
- ----------------------
BKC American Bank of Waterbury CT* 24.50 2,286 56.0 27.62 21.37 24.12 1.58 30.67 -10.09
BFD BostonFed Bancorp of MA 12.25 6,590 80.7 12.62 10.00 12.25 0.00 N.A. 4.26
CFX Cheshire Fin. Corp. of NH* 14.37 7,561 108.7 17.50 13.50 13.75 4.51 20.76 -8.06
CZF Citisave Fin. Corp. of LA 14.25 965 13.8 16.50 12.75 15.75 -9.52 N.A. -3.39
CBK Citizens First Fin.Corp. of IL 9.87 2,818 27.8 10.50 9.75 10.00 -1.30 N.A. N.A.
ESX Essex Bancorp of VA(8) 2.25 1,051 2.4 5.50 0.94 2.31 -2.60 -86.57 19.68
FCB Falmouth Co-Op Bank of MA* 10.25 1,455 14.9 11.37 10.25 10.25 0.00 N.A. N.A.
GAF GA Financial Corp. of PA 11.00 8,900 97.9 11.50 10.75 10.75 2.33 N.A. N.A.
KNK Kankakee Bancorp of IL 19.25 1,439 27.7 21.00 18.25 19.37 -0.62 92.50 2.01
KYF Kentucky First Bancorp of KY 13.37 1,389 18.6 13.62 11.37 13.62 -1.84 N.A. 8.08
NYB New York Bancorp, Inc. of NY 25.25 11,725 296.1 26.12 19.00 25.25 0.00 256.14 12.22
PDB Piedmont Bancorp of NC 13.25 2,645 35.0 13.62 12.00 13.12 0.99 N.A. 6.00
PLE Pinnacle Bank of AL 16.12 890 14.3 19.25 15.50 16.00 0.75 138.81 -10.44
SSB Scotland Bancorp of NC 12.37 1,840 22.8 12.62 11.62 12.12 2.06 N.A. N.A.
SZB SouthFirst Bancshares of AL 12.25 855 10.5 16.00 11.25 12.00 2.08 N.A. -20.97
SRN Southern Banc Company of AL 13.25 1,455 19.3 13.37 11.37 13.25 0.00 N.A. 2.95
SSM Stone Street Bancorp of NC 16.87 1,825 30.8 18.50 16.75 16.87 0.00 N.A. N.A.
TSH Teche Holding Company of LA 13.25 4,094 54.2 14.50 11.75 13.25 0.00 N.A. -3.64
FTF Texarkana Fst. Fin. Corp of AR 16.50 1,984 32.7 16.50 10.00 16.37 0.79 N.A. 16.86
THR Three Rivers Fin. Corp. of MI 13.37 860 11.5 13.62 11.37 13.25 0.91 N.A. 9.14
TBK Tolland Bank of CT* 9.75 1,157 11.3 10.25 7.50 9.62 1.35 34.48 2.63
WSB Washington SB, FSB of MD 5.50 4,220 23.2 6.25 3.56 5.63 -2.31 340.00 10.00
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 26.62 666 17.7 34.05 26.00 26.00 2.38 N.A. -8.74
WFSB 1st Washington Bancorp of VA(8) 7.94 9,883 78.5 8.00 5.00 7.94 0.00 98.50 13.43
ALBK ALBANK Fin. Corp. of Albany NY 27.25 13,605 370.7 30.62 21.46 27.25 0.00 17.20 9.00
AMFC AMB Financial Corp. of IN 10.12 1,124 11.4 11.00 9.75 10.00 1.20 N.A. N.A.
ASBP ASB Financial Corp. of OH 15.00 1,714 25.7 16.50 11.37 15.00 0.00 N.A. -5.48
ABBK Abington Savings Bank of MA(8)* 15.37 1,884 29.0 18.50 12.75 14.50 6.00 132.18 -10.90
AADV Advantage Bancorp of WI 34.00 3,449 117.3 34.50 23.40 34.00 0.00 269.57 12.58
AFCB Affiliated Comm BC, Inc of MA 16.75 5,072 85.0 18.00 16.06 16.62 0.78 N.A. -3.57
ALBC Albion Banc Corp. of Albion NY 16.50 261 4.3 18.75 14.25 17.00 -2.94 26.92 0.00
ATSB AmTrust Capital Corp. of IN 9.87 567 5.6 11.25 8.25 10.00 -1.30 N.A. -3.71
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- ---------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NYSE Traded Companies
- --------------------
AHM Ahmanson and Co. H.F. of CA 3.65 0.44 20.40 19.12 442.46
CAL CalFed Inc. of Los Angeles CA 1.68 1.58 13.08 13.08 289.58
CSA Coast Savings Financial of CA 2.09 1.81 22.89 22.51 443.41
CFB Commercial Federal Corp. of NE 3.47 3.45 26.57 23.87 439.20
DME Dime Savings Bank, FSB of NY* 0.68 0.93 9.98 9.87 196.40
DSL Downey Financial Corp. of CA 1.68 1.47 22.83 22.43 274.12
FRC First Republic Bancorp of CA* 0.35 0.34 15.17 15.15 268.42
FED FirstFed Fin. Corp. of CA 0.71 0.79 18.38 18.07 392.11
GLN Glendale Fed. Bk, FSB of CA 0.42 0.99 17.49 16.12 325.92
GDW Golden West Fin. Corp. of CA 4.42 4.37 39.79 37.43 597.27
GWF Great Western Fin. Corp. of CA 1.92 1.75 18.42 16.13 318.96
GPT GreenPoint Fin. Corp. of NY(8)* 2.03 2.12 29.18 16.62 275.83
SFB Standard Fed. Bancorp of MI 3.92 3.54 30.02 25.61 431.63
TCB TCF Financial Corp. of MN 2.78 2.63 15.10 14.44 196.44
WES Westcorp Inc. of Orange CA 1.42 0.71 11.78 11.74 119.08
AMEX Traded Companies
- ---------------------
BKC American Bank of Waterbury CT* 2.02 0.82 19.37 18.37 226.11
BFD BostonFed Bancorp of MA 0.20 0.17 13.90 13.90 102.85
CFX Cheshire Fin. Corp. of NH* 1.15 0.95 11.99 10.70 126.74
CZF Citisave Fin. Corp. of LA 1.02 0.70 15.02 15.01 82.61
CBK Citizens First Fin.Corp. of IL 0.56 0.61 13.95 13.95 89.59
ESX Essex Bancorp of VA(8) 0.97 -2.35 7.72 -0.25 300.25
FCB Falmouth Co-Op Bank of MA* 0.25 0.26 14.84 14.84 60.43
GAF GA Financial Corp. of PA 0.33 0.44 14.34 14.34 63.90
KNK Kankakee Bancorp of IL 1.15 1.13 24.73 22.94 252.38
KYF Kentucky First Bancorp of KY 0.57 0.57 14.28 14.28 60.46
NYB New York Bancorp, Inc. of NY 2.72 2.58 13.58 13.58 234.92
PDB Piedmont Bancorp of NC 0.58 0.59 14.05 14.05 47.20
PLE Pinnacle Bank of AL 1.71 1.53 17.10 16.50 208.76
SSB Scotland Bancorp of NC 0.38 0.38 14.38 14.38 38.27
SZB SouthFirst Bancshares of AL 0.55 0.76 15.48 15.48 103.98
SRN Southern Banc Company of AL 0.36 0.36 15.51 15.34 76.12
SSM Stone Street Bancorp of NC 0.43 0.43 21.43 21.43 63.62
TSH Teche Holding Company of LA 0.92 0.90 14.51 14.51 84.54
FTF Texarkana Fst. Fin. Corp of AR 1.48 1.11 16.98 16.98 82.35
THR Three Rivers Fin. Corp. of MI 0.51 0.49 14.90 14.81 94.69
TBK Tolland Bank of CT* 1.12 0.82 11.74 11.19 187.76
WSB Washington SB, FSB of MD 0.57 0.42 5.03 5.03 62.24
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 9.81 -0.71 32.33 32.33 410.09
WFSB 1st Washington Bancorp of VA(8) 0.51 0.21 4.79 4.79 80.47
ALBK ALBANK Fin. Corp. of Albany NY 2.21 2.21 23.58 20.81 244.99
AMFC AMB Financial Corp. of IN 0.31 0.31 14.37 14.37 71.65
ASBP ASB Financial Corp. of OH 0.64 0.64 15.04 15.04 65.18
ABBK Abington Savings Bank of MA(8)* 0.85 0.56 16.52 14.45 253.96
AADV Advantage Bancorp of WI 2.51 2.26 27.77 24.06 284.11
AFCB Affiliated Comm BC, Inc of MA 1.21 1.45 18.97 18.82 185.00
ALBC Albion Banc Corp. of Albion NY 0.66 0.56 23.26 23.26 217.21
ATSB AmTrust Capital Corp. of IN 0.37 0.08 13.32 13.18 128.87
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
---------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- -------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
AHCI Ambanc Holding Co. of NY* 9.56 5,422 51.8 10.31 9.38 9.38 1.92 N.A. -5.44
ASBI Ameriana Bancorp of IN 13.00 3,325 43.2 14.44 11.25 13.00 0.00 40.85 -8.77
AFFFZ America First Fin. Fund of CA 27.00 6,011 162.3 29.75 24.50 26.00 3.85 44.00 -9.24
AMFB American Federal Bank of SC 15.75 10,921 172.0 16.50 13.75 16.00 -1.56 231.58 3.28
ANBK American Nat'l Bancorp of MD 9.87 3,980 39.3 10.25 8.05 10.00 -1.30 N.A. 1.23
ABCW Anchor Bancorp Wisconsin of WI 34.00 4,934 167.8 36.25 25.80 34.50 -1.45 15.76 -5.21
ANDB Andover Bancorp, Inc. of MA* 24.25 4,243 102.9 26.06 18.25 25.75 -5.83 125.58 14.82
ASFC Astoria Financial Corp. of NY 27.37 21,917 599.9 28.13 17.69 27.00 1.37 4.27 19.99
AVND Avondale Fin. Corp. of IL 13.00 4,015 52.2 15.25 12.72 13.25 -1.89 N.A. -10.34
BFSI BFS Bankorp, Inc. of NY 38.50 1,635 62.9 39.50 24.75 39.50 -2.53 324.94 9.22
BKCT Bancorp Connecticut of CT* 20.75 2,706 56.1 21.04 12.71 19.56 6.08 137.14 40.30
BWFC Bank West Fin. Corp. of MI 10.75 2,296 24.7 10.87 8.75 10.75 0.00 N.A. 6.23
BANC BankAtlantic Bancorp of FL 13.50 11,743 158.5 16.00 10.24 14.00 -3.57 159.62 -10.00
BKUNA BankUnited SA of FL 7.50 5,693 42.7 8.75 6.12 7.75 -3.23 38.12 22.55
BKCO Bankers Corp. of NJ* 17.25 12,794 220.7 18.78 16.25 17.25 0.00 176.00 6.15
BVFS Bay View Capital Corp. of CA 33.50 6,900 231.2 35.25 24.00 33.00 1.52 69.62 17.54
BFSB Bedford Bancshares of VA 16.62 1,195 19.9 18.75 15.25 16.00 3.88 58.29 -4.32
BTHL Bethel Bancorp. of ME* 13.00 1,203 15.6 13.25 10.75 13.00 0.00 10.64 13.04
SBOS Boston Bancorp of MA(8)* 41.87 5,251 219.9 44.00 35.75 42.00 -0.31 154.68 4.02
BSBC Branford SB of CT* 3.25 6,559 21.3 3.50 2.12 3.37 -3.56 53.30 13.24
BRFC Bridgeville SB, FSB of PA 13.75 1,124 15.5 15.25 12.25 14.25 -3.51 -3.51 -5.17
BYFC Broadway Fin. Corp. of CA 10.00 893 8.9 11.00 10.00 10.00 0.00 N.A. N.A.
CBCO CB Bancorp of Michigan City IN 17.25 1,188 20.5 19.25 12.50 17.25 0.00 56.82 -4.17
CCFH CCF Holding Company of GA 12.00 1,131 13.6 12.75 10.75 11.50 4.35 N.A. -5.88
CENF CENFED Financial Corp. of CA 21.50 5,031 108.2 23.41 17.50 21.50 0.00 37.12 -1.47
CFSB CFSB Bancorp of Lansing MI 21.25 4,476 95.1 24.00 17.73 20.62 3.06 136.11 -1.16
CKFB CKF Bancorp of Danville KY 19.50 932 18.2 20.25 12.75 20.00 -2.50 N.A. 1.30
CSBF CSB Financial Group Inc of IL 9.12 1,035 9.4 9.62 8.81 9.00 1.33 N.A. -4.00
CFHC California Fin. Hld. Co. of CA 20.87 4,668 97.4 21.88 15.00 20.50 1.80 98.76 1.80
CBCI Calumet Bancorp of Chicago IL 28.50 2,668 76.0 28.50 26.50 28.00 1.79 40.74 2.70
CAFI Camco Fin. Corp. of OH 19.62 1,971 38.7 20.00 13.81 20.00 -1.90 N.A. 9.00
CMRN Cameron Fin. Corp. of MO 13.50 2,850 38.5 15.50 11.37 14.00 -3.57 N.A. -6.05
CAPS Capital Savings Bancorp of MO 18.00 1,039 18.7 19.50 16.50 18.00 0.00 35.85 -2.70
CARV Carver FSB of New York, NY 7.87 2,314 18.2 10.75 6.81 7.62 3.28 25.92 -12.56
CASB Cascade SB of Everett WA 16.50 2,040 33.7 16.50 12.40 20.00 -17.50 28.91 24.06
CATB Catskill Fin. Corp. of NY* 10.19 5,687 58.0 10.75 10.06 10.25 -0.59 N.A. N.A.
CNIT Cenit Bancorp of Norfolk VA 35.00 1,606 56.2 40.25 33.00 34.00 2.94 120.40 -4.76
CTBK Center Banks, Inc. of NY* 13.75 932 12.8 15.25 13.00 13.75 0.00 25.00 -2.20
CFCX Center Fin. Corp of CT(8)* 22.87 14,487 331.3 22.87 14.12 20.87 9.58 238.81 30.69
CEBK Central Co-Op. Bank of MA* 15.50 1,933 30.0 17.00 10.75 15.25 1.64 195.24 3.33
CJFC Central Jersey Fin. Corp of NJ(8) 30.75 2,668 82.0 31.31 19.00 30.25 1.65 229.94 23.00
CBSB Charter Financial Inc. of IL 11.50 4,974 57.2 12.25 8.52 11.50 0.00 N.A. 6.38
COFI Charter One Financial of OH(8) 35.19 45,115 1,587.6 38.00 24.25 35.62 -1.21 101.09 14.92
CVAL Chester Valley Bancorp of PA 18.25 1,580 28.8 20.48 18.12 18.62 -1.99 61.08 -5.19
CRCL Circle Financial Corp.of OH(8) 34.00 708 24.1 35.50 25.00 33.84 0.47 209.09 25.93
CTZN CitFed Bancorp of Dayton OH 37.06 5,686 210.7 38.87 26.50 36.75 0.84 311.78 7.42
CLAS Classic Bancshares of KY 11.00 1,322 14.5 11.75 10.50 11.12 -1.08 N.A. -6.38
CMSB Cmnwealth SB, MHC of PA (46.3)(8) 21.50 8,642 82.8 24.87 14.87 21.88 -1.74 N.A. -4.44
CBSA Coastal Bancorp of Houston TX 18.56 4,958 92.0 18.75 15.63 18.62 -0.32 N.A. 6.06
CFCP Coastal Fin. Corp. of SC 20.19 2,742 55.4 21.50 14.80 20.00 0.95 101.90 27.78
COFD Collective Bancorp Inc. of NJ 24.25 20,407 494.9 28.25 20.00 24.12 0.54 218.24 -4.41
CMSV Commty. Svgs, MHC of FL(47.6) 15.25 4,869 36.3 18.25 14.25 14.75 3.39 N.A. -10.29
CBIN Community Bank Shares of IN 13.62 1,984 27.0 14.75 12.00 13.62 0.00 N.A. -4.42
CBNH Community Bankshares Inc of NH* 17.75 2,416 42.9 19.75 15.75 17.37 2.19 373.33 -5.94
CFTP Community Fed. Bancorp of MS 13.62 4,629 53.0 13.62 12.50 0.89 0.89 N.A. N.A.
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- --------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
AHCI Ambanc Holding Co. of NY* -0.02 -0.03 13.87 13.87 72.36
ASBI Ameriana Bancorp of IN 1.00 0.97 13.41 13.39 115.21
AFFFZ America First Fin. Fund of CA 3.20 3.18 26.41 25.79 388.14
AMFB American Federal Bank of SC 1.55 1.69 10.07 9.29 122.62
ANBK American Nat'l Bancorp of MD 0.37 0.36 12.31 12.31 112.82
ABCW Anchor Bancorp Wisconsin of WI 2.94 2.86 24.00 23.37 355.61
ANDB Andover Bancorp, Inc. of MA* 2.25 2.36 20.44 20.44 269.10
ASFC Astoria Financial Corp. of NY 2.21 2.19 26.16 21.28 306.07
AVND Avondale Fin. Corp. of IL 0.93 0.65 15.35 15.35 144.39
BFSI BFS Bankorp, Inc. of NY 6.20 5.99 28.20 28.20 346.45
BKCT Bancorp Connecticut of CT* 1.65 1.65 16.09 16.09 148.88
BWFC Bank West Fin. Corp. of MI 0.41 0.24 11.99 11.99 60.63
BANC BankAtlantic Bancorp of FL 1.44 1.12 11.65 10.70 139.90
BKUNA BankUnited SA of FL 1.12 0.86 7.93 7.49 129.72
BKCO Bankers Corp. of NJ* 1.62 1.71 14.69 14.38 149.72
BVFS Bay View Capital Corp. of CA -0.46 1.15 29.46 28.72 421.78
BFSB Bedford Bancshares of VA 1.20 1.20 15.85 15.85 98.41
BTHL Bethel Bancorp. of ME* 1.08 0.83 13.72 11.53 181.37
SBOS Boston Bancorp of MA(8)* 7.08 3.39 40.29 40.29 326.62
BSBC Branford SB of CT* 0.20 0.20 2.31 2.31 26.59
BRFC Bridgeville SB, FSB of PA 0.59 0.59 14.13 14.13 49.57
BYFC Broadway Fin. Corp. of CA 0.49 0.55 14.73 14.73 129.03
CBCO CB Bancorp of Michigan City IN 2.07 2.07 15.79 15.79 172.41
CCFH CCF Holding Company of GA 0.59 0.56 14.79 14.79 69.65
CENF CENFED Financial Corp. of CA 1.97 1.36 21.02 20.98 420.11
CFSB CFSB Bancorp of Lansing MI 1.58 1.55 14.30 14.30 172.40
CKFB CKF Bancorp of Danville KY 0.75 0.75 17.21 17.21 63.05
CSBF CSB Financial Group Inc of IL 0.32 0.32 12.30 12.30 39.82
CFHC California Fin. Hld. Co. of CA 0.77 0.67 18.48 18.32 273.69
CBCI Calumet Bancorp of Chicago IL 2.28 2.27 31.99 31.99 188.31
CAFI Camco Fin. Corp. of OH 2.12 1.62 14.52 14.52 174.38
CMRN Cameron Fin. Corp. of MO 0.97 0.96 16.06 16.06 60.52
CAPS Capital Savings Bancorp of MO 1.75 1.75 20.34 20.34 194.95
CARV Carver FSB of New York, NY 0.31 0.40 15.12 14.38 156.97
CASB Cascade SB of Everett WA 0.86 0.45 9.94 9.94 159.93
CATB Catskill Fin. Corp. of NY* 0.47 0.54 13.65 13.65 49.12
CNIT Cenit Bancorp of Norfolk VA 1.57 1.84 29.00 27.92 415.61
CTBK Center Banks, Inc. of NY* 1.27 1.31 16.32 16.32 230.66
CFCX Center Fin. Corp of CT(8)* 1.60 1.09 15.46 14.44 253.30
CEBK Central Co-Op. Bank of MA* 0.99 0.93 16.38 14.30 164.61
CJFC Central Jersey Fin. Corp of NJ(8) 1.89 1.80 20.58 19.13 174.74
CBSB Charter Financial Inc. of IL 0.65 0.65 12.95 12.61 60.48
COFI Charter One Financial of OH(8) 0.37 2.39 20.16 19.84 292.01
CVAL Chester Valley Bancorp of PA 1.54 1.48 15.90 15.90 173.78
CRCL Circle Financial Corp.of OH(8) 1.47 1.26 34.51 29.94 324.02
CTZN CitFed Bancorp of Dayton OH 2.84 2.32 30.62 26.54 456.89
CLAS Classic Bancshares of KY 0.21 0.19 14.76 14.76 51.28
CMSB Cmnwealth SB, MHC of PA (46.3)(8) 1.27 1.13 15.93 14.00 191.82
CBSA Coastal Bancorp of Houston TX 1.93 1.92 18.76 15.22 566.10
CFCP Coastal Fin. Corp. of SC 1.51 1.36 9.79 9.79 160.91
COFD Collective Bancorp Inc. of NJ 2.62 2.56 17.47 16.22 247.89
CMSV Commty. Svgs, MHC of FL(47.6) 0.99 0.96 15.35 15.35 129.90
CBIN Community Bank Shares of IN 0.96 0.94 12.84 12.84 113.06
CBNH Community Bankshares Inc of NH* 1.41 1.17 15.46 15.46 213.92
CFTP Community Fed. Bancprp of MS 0.43 0.42 14.34 14.34 43.32
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
--------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CFFC Community Fin. Corp. of VA 20.00 1,270 25.4 21.00 13.50 21.00 -4.76 185.71 11.11
CIBI Community Inv. Corp. of OH 15.25 701 10.7 17.50 12.75 14.75 3.39 N.A. 0.00
CONE Conestoga Bancorp of Roslyn NY(8) 21.00 4,742 99.6 21.12 14.37 21.00 0.00 N.A. 4.37
COOP Cooperative Bk.for Svgs. of NC 17.25 1,492 25.7 22.50 17.25 17.25 0.00 72.50 -15.85
CNSK Covenant Bank for Svgs. of NJ* 12.00 1,959 23.5 13.22 8.62 12.00 0.00 N.A. -9.23
CRZY Crazy Woman Creek Bncorp of WY 10.25 1,058 10.8 11.00 10.25 10.37 -1.16 N.A. N.A.
DNFC D&N Financial Corp. of MI 13.44 6,829 91.8 13.62 9.38 12.37 8.65 53.60 10.89
DSBC DS Bancor Inc. of Derby CT* 31.25 3,029 94.7 33.00 23.33 31.37 -0.38 89.97 22.55
DFIN Damen Fin. Corp. of Chicago IL 11.50 3,967 45.6 11.94 11.00 11.62 -1.03 N.A. 1.14
DIBK Dime Financial Corp. of CT* 14.25 5,024 71.6 14.50 9.50 13.75 3.64 35.71 5.56
EBSI Eagle Bancshares of Tucker GA 16.00 3,117 49.9 19.00 13.62 16.00 0.00 120.69 -15.79
EGFC Eagle Financial Corp. of CT 23.75 4,491 106.7 27.75 20.75 23.50 1.06 171.43 -9.52
ETFS East Texas Fin. Serv. of TX 14.75 1,194 17.6 16.75 13.75 14.75 0.00 N.A. -9.23
EBCP Eastern Bancorp of NH 24.00 2,398 57.6 27.50 19.25 24.25 -1.03 186.74 -10.28
ESBK Elmira SB of Elmira NY* 16.75 706 11.8 18.75 14.50 16.50 1.52 16.56 -10.67
EFBI Enterprise Fed. Bancorp of OH 14.25 2,085 29.7 18.00 13.75 14.25 0.00 N.A. -3.39
EQSB Equitable FSB of Wheaton MD 24.25 600 14.6 24.25 20.37 22.50 7.78 N.A. 7.78
FFFG F.F.O. Financial Group of FL 2.81 8,430 23.7 3.00 2.25 2.69 4.46 -66.19 9.77
FCBF FCB Fin. Corp. of Neenah WI 18.25 2,513 45.9 18.50 15.50 17.50 4.29 N.A. -1.35
FFBS FFBS Bancorp of Columbus MS 22.75 1,573 35.8 24.00 15.50 23.00 -1.09 N.A. 33.82
FFDF FFD Financial Corp. of OH 10.19 1,455 14.8 10.75 10.00 10.37 -1.74 N.A. N.A.
FFLC FFLC Bancorp of Leesburg FL 18.50 2,638 48.8 20.25 16.00 17.75 4.23 N.A. -1.33
FFFC FFVA Financial Corp. of VA 17.50 5,426 95.0 17.50 13.25 16.75 4.48 N.A. 27.27
FFWC FFW Corporation of Wabash IN 19.25 739 14.2 19.75 16.50 19.25 0.00 N.A. -2.53
FFYF FFY Financial Corp. of OH 23.25 5,193 120.7 23.50 19.00 23.25 0.00 N.A. 10.71
FMCO FMS Financial Corp. of NJ 17.50 2,467 43.2 17.50 12.50 16.25 7.69 94.44 2.94
FFHH FSF Financial Corp. of MN 12.12 3,861 46.8 13.50 10.75 11.69 3.68 N.A. -6.77
FMLY Family Bancorp of Haverhill MA(8)* 24.25 4,087 99.1 24.37 14.67 24.12 0.54 365.45 35.70
FMCT Farmers & Mechanics Bank of CT(8)* 30.25 1,661 50.2 30.25 15.75 19.12 58.21 N.A. 37.50
FOBC Fed One Bancorp of Wheeling WV 14.62 2,489 36.4 16.25 13.00 14.62 0.00 46.20 -3.31
FFRV Fid. Fin. Bkshrs. Corp. of VA 12.50 2,279 28.5 14.75 10.75 12.50 0.00 42.86 -9.88
FBCI Fidelity Bancorp of Chicago IL 16.62 3,085 51.3 17.00 13.25 16.62 0.00 N.A. 8.13
FSBI Fidelity Bancorp, Inc. of PA 16.00 1,367 21.9 17.50 13.41 16.00 0.00 106.99 6.67
FFFL Fidelity FSB, MHC of FL(47.2) 13.25 6,720 42.0 17.00 10.91 13.50 -1.85 N.A. -18.46
FFED Fidelity Fed. Bancorp of IN 11.25 2,493 28.0 14.77 10.46 12.00 -6.25 59.57 -23.83
FFOH Fidelity Financial of OH 9.94 4,073 40.5 10.89 5.61 10.00 -0.60 N.A. -8.72
FIBC Financial Bancorp of NY 12.50 1,873 23.4 14.87 11.75 12.87 -2.87 N.A. -9.09
FNSC Financial Security Corp. of IL(8) 25.37 1,524 38.7 26.50 16.50 25.37 0.00 153.70 14.02
FSBS First Ashland Fin. Corp. of KY(8) 18.00 1,463 26.3 18.37 13.00 18.00 0.00 N.A. 24.14
FBSI First Bancshares of MO 15.50 1,302 20.2 17.00 14.50 15.75 -1.59 21.57 -3.13
FBBC First Bell Bancorp of PA 13.69 8,166 111.8 14.25 10.00 13.44 1.86 N.A. 2.39
FBER First Bergen Bancorp of NJ 9.31 3,174 29.5 10.00 9.25 9.25 0.65 N.A. N.A.
FCIT First Cit. Fin. Corp of MD 17.75 2,914 51.7 19.09 14.09 17.75 0.00 104.26 2.78
FFBA First Colorado Bancorp of Co 13.19 20,302 267.8 13.62 7.75 13.25 -0.45 299.70 20.02
FDEF First Defiance Fin.Corp. of OH 10.75 10,978 118.0 11.00 7.41 10.62 1.22 N.A. 6.23
FESX First Essex Bancorp of MA* 10.75 6,035 64.9 12.00 8.13 10.37 3.66 79.17 -5.45
FFES First FS&LA of E. Hartford CT 17.00 2,594 44.1 21.50 16.75 17.00 0.00 161.54 -15.00
FSSB First FS&LA of San Bern. CA 10.00 328 3.3 14.50 10.00 10.00 0.00 0.00 -20.00
FFSX First FS&LA. MHC of IA (45.0) 25.75 1,706 19.5 28.62 18.00 25.75 0.00 157.50 -3.74
FFML First Family Bank, FSB of FL 21.00 545 11.4 23.00 14.50 21.12 -0.57 223.08 0.00
FFSW First Fed Fin. Serv. of OH 28.37 3,275 92.9 28.37 18.18 28.00 1.32 66.88 31.40
BDJI First Fed. Bancorp. of MN 13.00 819 10.6 14.75 11.25 13.50 -3.70 N.A. -5.45
FFBH First Fed. Bancshares of AR 13.75 5,154 70.9 14.00 13.00 13.75 0.00 N.A. N.A.
FFEC First Fed. Bancshares of WI 15.25 6,855 104.5 16.19 12.00 16.00 -4.69 N.A. 0.00
FTFC First Fed. Capital Corp. of WI 21.88 6,298 137.8 22.87 15.75 22.00 -0.55 94.49 21.56
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CFFC Community Fin. Corp. of VA 1.58 1.58 17.24 17.24 125.82
CIBI Community Inv. Corp. of OH 1.20 1.14 17.45 17.45 121.56
CONE Conestoga Bancorp of Roslyn NY(8) 0.68 0.55 16.86 16.86 104.25
COOP Cooperative Bk.for Svgs. of NC 0.60 0.51 19.64 17.27 210.32
CNSK Covenant Bank for Svgs. of NJ* 0.97 0.97 8.74 8.74 172.93
CRZY Crazy Woman Creek Bncorp of WY 0.34 0.29 14.67 14.67 44.86
DNFC D&N Financial Corp. of MI 1.80 1.59 10.16 10.00 180.40
DSBC DS Bancor Inc. of Derby CT* 2.69 2.41 26.99 26.06 411.93
DFIN Damen Fin. Corp. of Chicago IL 0.44 0.43 14.34 14.34 59.32
DIBK Dime Financial Corp. of CT* 1.93 2.17 10.63 10.10 133.64
EBSI Eagle Bancshares of Tucker GA 1.53 1.48 11.91 11.91 179.12
EGFC Eagle Financial Corp. of CT 3.66 1.79 22.70 16.42 318.09
ETFS East Texas Fin. Serv. of TX 0.87 0.81 18.90 18.90 96.28
EBCP Eastern Bancorp of NH 2.10 1.74 26.48 24.93 343.99
ESBK Elmira SB of Elmira NY* 0.46 0.46 19.89 19.00 315.91
EFBI Enterprise Fed. Bancorp of OH 0.99 0.68 15.52 15.49 99.61
EQSB Equitable FSB of Wheaton MD 3.42 3.39 22.75 22.75 433.56
FFFG F.F.O. Financial Group of FL 0.15 0.15 2.18 2.18 36.26
FCBF FCB Fin. Corp. of Neenah WI 1.02 1.00 18.78 18.78 101.73
FFBS FFBS Bancorp of Columbus MS 1.00 1.00 15.37 15.37 78.55
FFDF FFD Financial Corp. of OH 0.52 0.52 14.08 14.08 50.24
FFLC FFLC Bancorp of Leesburg FL 1.14 1.15 21.26 21.26 125.29
FFFC FFVA Financial Corp. of VA 1.19 1.16 15.57 15.26 95.42
FFWC FFW Corporation of Wabash IN 1.74 1.94 21.76 21.76 201.48
FFYF FFY Financial Corp. of OH 1.34 1.38 20.25 20.25 110.37
FMCO FMS Financial Corp. of NJ 1.69 1.69 13.49 13.12 204.99
FFHH FSF Financial Corp. of MN 0.48 0.48 13.51 13.51 84.61
FMLY Family Bancorp of Haverhill MA(8)* 2.01 1.80 16.84 15.41 217.12
FMCT Farmers & Mechanics Bank of CT(8)* 0.20 -0.07 17.95 17.95 323.27
FOBC Fed One Bancorp of Wheeling WV 1.31 1.31 16.53 15.65 136.43
FFRV Fid. Fin. Bkshrs. Corp. of VA 1.35 1.33 12.01 12.00 141.10
FBCI Fidelity Bancorp of Chicago IL 0.98 0.92 16.91 16.85 140.37
FSBI Fidelity Bancorp, Inc. of PA 1.25 1.23 16.06 15.93 220.51
FFFL Fidelity FSB, MHC of FL(47.2) 0.73 0.68 12.06 11.92 117.84
FFED Fidelity Fed. Bancorp of IN 1.38 1.30 5.70 5.70 112.37
FFOH Fidelity Financial of OH 0.46 0.46 12.47 12.47 61.22
FIBC Financial Bancorp of NY 0.80 0.79 14.33 14.25 134.48
FNSC Financial Security Corp. of IL(8) 1.41 1.31 25.83 25.83 179.85
FSBS First Ashland Fin. Corp. of KY(8) 0.51 0.51 16.24 16.24 61.67
FBSI First Bancshares of MO 0.80 0.79 18.26 18.22 107.89
FBBC First Bell Bancorp of PA 0.94 0.93 13.99 13.99 66.45
FBER First Bergen Bancorp of NJ 0.20 0.30 13.46 13.46 81.46
FCIT First Cit. Fin. Corp of MD 1.45 1.18 13.45 13.45 214.18
FFBA First Colorado Bancorp of Co 0.69 0.69 11.90 11.76 73.52
FDEF First Defiance Fin.Corp. of OH 0.53 0.52 12.22 12.22 48.12
FESX First Essex Bancorp of MA* 1.28 1.08 10.18 10.18 132.80
FFES First FS&LA of E. Hartford CT 1.98 1.96 22.29 22.22 359.84
FSSB First FS&LA of San Bern. CA -0.52 -1.09 17.77 16.97 314.90
FFSX First FS&LA. MHC of IA (45.0) 1.62 1.49 21.53 21.42 255.87
FFML First Family Bank, FSB of FL 2.34 1.38 15.77 15.77 281.19
FFSW First Fed Fin. Serv. of OH 2.41 1.94 16.15 14.69 303.35
BDJI First Fed. Bancorp. of MN 0.85 0.85 17.65 17.65 122.75
FFBH First Fed. Bancshares of AR 0.96 0.96 15.38 15.38 96.71
FFEC First Fed. Bancshares of WI 0.82 0.80 14.04 13.47 98.07
FTFC First Fed. Capital Corp. of WI 1.88 1.38 15.03 14.15 219.45
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -------------------------------------------------
Shares Market 52 Week (1) % Change From
--------------- ------------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- -------- ------ ------- -------- ------- ------- ------- -------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFFB First Fed. Fin. Bancorp of OH 10.75 672 7.2 10.63 10.00 10.63 1.13 N.A. N.A.
FFKY First Fed. Fin. Corp. of KY 22.00 4,215 92.7 22.00 14.12 21.00 4.76 39.68 43.14
FFBZ First Federal Bancorp of OH 24.50 785 19.2 24.50 14.25 24.50 0.00 145.00 20.99
FFWM First Fin. Corp of Western MD 20.75 2,188 45.4 23.75 17.75 20.00 3.75 107.50 5.06
FFCH First Fin. Holdings Inc. of SC 18.75 6,366 119.4 22.25 18.00 18.50 1.35 53.06 -2.60
FPRY First Financial Bancorp of FL(8) 21.25 894 19.0 21.37 17.50 20.37 4.32 185.62 4.94
FFBI First Financial Bancorp of IL 16.00 472 7.6 16.25 14.50 15.50 3.23 N.A. 0.00
FFHC First Financial Corp. of WI 22.37 29,885 668.5 24.00 16.37 23.00 -2.74 42.03 -2.74
FFHS First Franklin Corp. of OH 15.00 1,187 17.8 17.50 12.25 15.12 -0.79 14.33 -5.48
FGHC First Georgia Hold. Corp of GA 7.00 2,024 14.2 7.83 4.17 7.00 0.00 82.77 -8.74
FSPG First Home SB, SLA of NJ 18.00 2,030 36.5 19.00 14.00 17.75 1.41 200.00 -5.26
FFSL First Independence Corp. of KS 17.75 583 10.3 19.25 15.50 17.75 0.00 N.A. -5.33
FISB First Indiana Corp. of IN 24.00 8,278 198.7 25.19 16.25 24.50 -2.04 77.78 11.84
FKFS First Keystone Fin. Corp of PA 17.00 1,292 22.0 20.87 13.75 17.25 -1.45 N.A. -18.54
FLFC First Liberty Fin. Corp. of GA 21.75 3,982 86.6 22.75 16.25 22.12 -1.67 185.43 2.35
CASH First Midwest Fin. Corp. of IA 23.50 1,790 42.1 24.25 16.87 23.50 0.00 N.A. 0.00
FMBD First Mutual Bancorp of IL 13.00 4,352 56.6 14.75 11.12 12.75 1.96 N.A. -4.55
FMSB First Mutual SB of Bellevue WA* 13.25 2,447 32.4 16.00 8.90 13.12 0.99 70.97 -2.14
FNGB First Northern Cap. Corp of WI 16.00 4,557 72.9 16.50 13.25 15.69 1.98 9.89 -3.03
FFPB First Palm Beach Bancorp of FL 21.75 5,181 112.7 24.87 18.75 21.25 2.35 N.A. 2.98
FSNJ First SB of NJ, MHC (45.0) 14.37 3,017 19.5 19.50 12.50 14.12 1.77 N.A. -16.70
FSBC First SB, FSB of Clovis NM 5.50 696 3.8 7.00 5.12 5.50 0.00 -18.52 -18.52
FSLA First SB, SLA MHC of NJ (37.6) 15.75 6,512 31.5 17.50 12.50 16.00 -1.56 57.50 -4.55
SOPN First SB, SSB, Moore Co. of NC 18.25 3,744 68.3 20.25 17.25 18.75 -2.67 N.A. 2.47
FWWB First Savings Bancorp of WA* 14.62 10,065 147.2 15.37 12.37 15.00 -2.53 N.A. 11.43
SHEN First Shenango Bancorp of PA 21.50 2,308 49.6 22.25 18.50 20.50 4.88 N.A. 4.88
FSFC First So.east Fin. Corp. of SC 17.87 4,101 73.3 20.25 16.87 17.87 0.00 N.A. -5.95
FSFI First State Fin. Serv. of NJ 10.37 4,025 41.7 14.12 10.00 10.00 3.70 155.42 -23.86
FFDP FirstFed Bancshares of IL 16.00 3,387 54.2 16.75 12.00 16.12 -0.74 140.24 12.91
FLAG Flag Financial Corp of GA 12.50 2,008 25.1 15.00 10.75 12.75 -1.96 27.55 -9.09
FFPC Florida First Bancorp of FL(8) 11.19 3,374 37.8 11.19 5.50 11.12 0.63 495.21 51.83
FFIC Flushing Fin. Corp. of NY* 15.87 7,958 126.3 16.50 14.12 15.75 0.76 N.A. 3.25
FBHC Fort Bend Holding Corp. of TX 17.75 817 14.5 20.25 16.50 17.75 0.00 N.A. -1.39
FTSB Fort Thomas Fin. Corp. of KY 16.75 1,574 26.4 17.00 11.25 16.75 0.00 N.A. 38.20
FKKY Frankfort First Bancorp of KY 11.87 3,450 41.0 15.87 11.00 11.37 4.40 N.A. -10.42
GFSB GFS Bancorp of Grinnell IA 20.25 515 10.4 20.75 15.25 20.50 -1.22 N.A. 1.25
GUPB GFSB Bancorp of Gallup NM 13.50 949 12.8 15.00 12.87 14.00 -3.57 N.A. -5.26
GWBC Gateway Bancorp of KY 13.87 1,176 16.3 16.25 13.50 14.00 -0.93 N.A. -2.67
GBCI Glacier Bancorp of MT 21.75 3,360 73.1 22.27 16.14 21.75 0.00 350.31 18.14
GLBK Glendale Co-op. Bank of MA* 16.50 247 4.1 19.00 12.75 17.50 -5.71 N.A. -12.00
GFCO Glenway Financial Corp. of OH 20.25 1,091 22.1 24.50 16.19 20.50 -1.22 N.A. -17.35
GTPS Great American Bancorp of IL 14.25 1,850 26.4 15.12 11.87 13.75 3.64 N.A. -2.13
GTFN Great Financial Corp. of KY 26.87 14,653 393.7 27.37 18.62 27.00 -0.48 N.A. 14.34
GSBC Great Southern Bancorp of MO 27.50 4,434 121.9 27.50 17.62 27.50 0.00 841.78 11.11
GDVS Greater DV SB,MHC of PA(19.9)* 10.00 3,272 6.5 13.00 9.38 10.00 0.00 N.A. -16.67
GRTR Greater New York SB of NY* 11.25 13,289 149.5 13.31 9.25 11.00 2.27 20.84 -6.25
GSFC Green Street Fin. Corp. of NC 12.87 4,298 55.3 13.12 12.12 12.62 1.98 N.A. N.A.
GROV GroveBank for Savings of MA* 25.37 1,538 39.0 26.50 23.00 25.25 0.48 186.02 2.51
GFED Guaranty FS&LA,MHC of MO(31.1) 11.62 3,125 9.0 12.50 8.00 11.50 1.04 N.A. -2.11
GSLC Guaranty Svgs & Loan FA of VA 8.37 919 7.7 8.50 6.31 8.50 -1.53 N.A. 8.00
HEMT HF Bancorp of Hemet CA 9.75 6,612 64.5 10.25 8.19 10.00 -2.50 N.A. -1.22
HFFC HF Financial Corp. of SD(8) 15.19 3,055 46.4 16.75 13.00 15.00 1.27 203.80 -0.39
HFNC HFNC Financial Corp. of NC 16.50 17,192 283.7 16.50 13.12 16.12 2.36 N.A. 25.76
HMNF HMN Financial, Inc. of MN 16.12 5,180 83.5 16.12 13.56 15.69 2.74 N.A. 0.75
HALL Hallmark Capital Corp. of WI 15.00 1,443 21.6 16.25 13.25 14.81 1.28 N.A -3.23
<CAPTION>
Current Per Share Financials
-----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- --------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFFB First Fed. Fin. Bancorp of OH 0.58 0.58 15.73 15.73 87.15
FFKY First Fed. Fin. Corp. of KY 1.32 1.15 11.69 10.91 83.28
FFBZ First Federal Bancorp of OH 2.39 2.35 17.23 17.21 220.63
FFWM First Fin. Corp of Western MD 0.64 0.59 18.70 18.70 149.22
FFCH First Fin. Holdings Inc. of SC 1.62 1.65 15.04 15.04 227.64
FPRY First Financial Bancorp of FL(8) 1.47 1.10 17.07 17.07 268.88
FFBI First Financial Bancorp of IL 1.12 1.17 16.66 16.66 187.74
FFHC First Financial Corp. of WI 2.34 2.27 13.30 12.63 181.34
FFHS First Franklin Corp. of OH 1.10 1.08 17.31 17.31 182.08
FGHC First Georgia Hold. Corp of GA 0.59 0.59 5.73 5.07 70.22
FSPG First Home SB, SLA of NJ 2.19 2.13 14.97 14.57 229.74
FFSL First Independence Corp. of KS 1.95 1.95 22.03 22.03 174.32
FISB First Indiana Corp. of IN 2.11 1.79 15.98 15.75 178.41
FKFS First Keystone Fin. Corp of PA 1.01 1.09 17.84 17.84 215.33
FLFC First Liberty Fin. Corp. of GA 2.15 1.70 16.84 14.14 246.53
CASH First Midwest Fin. Corp. of IA 1.95 1.55 21.72 20.25 173.02
FMBD First Mutual Bancorp of IL 0.61 0.59 16.56 16.56 65.56
FMSB First Mutual SB of Bellevue WA* 1.45 1.43 10.07 10.07 151.61
FNGB First Northern Cap. Corp of WI 1.03 0.88 15.98 15.98 125.56
FFPB First Palm Beach Bancorp of FL 1.69 1.68 21.60 21.03 282.84
FSNJ First SB of NJ, MHC (45.0) 0.08 0.66 17.70 17.70 217.79
FSBC First SB, FSB of Clovis NM 0.53 0.41 7.86 7.86 165.94
FSLA First SB, SLA MHC of NJ (37.6) 1.24 1.19 13.98 12.14 147.32
SOPN First SB, SSB, Moore Co. of NC 1.00 1.02 17.94 17.94 68.45
FWWB First Savings Bancorp of WA* 0.53 0.52 15.25 15.25 59.11
SHEN First Shenango Bancorp of PA 1.44 1.36 20.40 20.40 154.12
FSFC First So.east Fin. Corp. of SC 0.78 0.77 17.19 17.19 87.66
FSFI First State Fin. Serv. of NJ 0.96 0.75 10.69 10.13 156.19
FFDP FirstFed Bancshares of IL 1.10 0.69 16.62 15.87 184.23
FLAG Flag Financial Corp of GA 1.05 0.93 10.76 10.76 112.53
FFPC Florida First Bancorp of FL(8) 0.75 0.69 6.24 6.24 90.11
FFIC Flushing Fin. Corp. of NY* 0.48 0.46 17.39 17.39 92.91
FBHC Fort Bend Holding Corp. of TX 2.13 1.93 21.52 21.52 295.91
FTSB Fort Thomas Fin. Corp. of KY 0.70 0.70 13.58 13.58 55.88
FKKY Frankfort First Bancorp of KY 0.53 0.42 13.87 13.87 40.18
GFSB GFS Bancorp of Grinnell IA 1.57 1.54 18.91 18.91 157.11
GUPB GFSB Bancorp of Gallup NM 0.76 0.76 17.09 17.09 74.21
GWBC Gateway Bancorp of KY 0.66 0.66 15.52 15.52 62.08
GBCI Glacier Bancorp of MT 1.76 1.76 11.41 11.39 118.52
GLBK Glendale Co-op. Bank of MA* 1.13 0.95 23.71 23.71 145.36
GFCO Glenway Financial Corp. of OH 1.37 1.31 24.02 23.39 255.37
GTPS Great American Bancorp of IL 0.41 0.41 18.72 18.72 63.62
GTFN Great Financial Corp. of KY 1.55 1.26 19.19 18.88 169.06
GSBC Great Southern Bancorp of MO 2.48 2.33 15.04 14.79 148.62
GDVS Greater DV SB,MHC of PA(19.9)* 0.35 0.35 8.86 8.86 72.09
GRTR Greater New York SB of NY* 0.89 0.87 11.01 11.01 193.82
GSFC Green Street Fin. Corp. of NC 0.62 0.62 13.78 13.78 43.71
GROV GroveBank for Savings of MA* 2.96 2.79 23.79 23.74 381.30
GFED Guaranty FS&LA,MHC of MO(31.1) 0.58 0.31 8.69 8.69 59.37
GSLC Guaranty Svgs & Loan FA of VA 0.70 0.43 6.93 6.93 112.04
HEMT HF Bancorp of Hemet CA 0.20 0.20 13.05 13.04 114.09
HFFC HF Financial Corp. of SD(8) 1.41 1.10 16.86 16.81 187.90
HFNC HFNC Financial Corp. of NC 0.32 0.38 14.21 14.21 41.66
HMNF HMN Financial, Inc. of MN 1.13 1.01 17.54 17.54 104.64
HALL Hallmark Capital Corp. of WI 1.14 1.02 18.38 18.38 235.12
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
--------------- -----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HARB Harbor FSB, MHC of FL (45.7) 25.75 4,925 57.7 29.25 18.50 27.00 -4.63 N.A. -6.36
HRBF Harbor Federal Bancorp of MD 13.12 1,858 24.4 15.50 12.50 12.87 1.94 31.20 -9.52
HFSA Hardin Bancorp of Hardin MO 11.75 1,058 12.4 13.00 11.25 11.75 0.00 N.A. -7.84
HARL Harleysville SA of PA 18.37 1,287 23.6 19.75 14.75 18.37 0.00 3.49 22.47
HARS Harris SB, MHC of PA (23.1) 17.00 11,211 42.5 20.50 15.50 16.75 1.49 N.A. -15.00
HFFB Harrodsburg 1st Fin Bcrp of KY 15.00 2,182 32.7 15.75 12.37 15.25 -1.64 N.A. 0.00
HHFC Harvest Home Fin. Corp. of OH 13.00 895 11.6 13.00 10.00 13.00 0.00 N.A. 6.12
HAVN Haven Bancorp of Woodhaven NY 28.31 4,287 121.4 28.31 17.75 27.75 2.02 N.A. 19.86
HVFD Haverfield Corp. of OH 18.00 1,904 34.3 18.75 12.27 17.75 1.41 16.13 33.33
HTHR Hawthorne Fin. Corp. of CA 8.50 2,599 22.1 8.50 2.25 7.50 13.33 -69.09 70.00
HSBK Hibernia SB of Quincy MA* 14.50 1,556 22.6 18.00 13.75 14.75 -1.69 90.29 -10.77
HBNK Highland Federal Bank of CA 16.00 2,296 36.7 17.00 11.00 16.37 -2.26 N.A. 3.23
HIFS Hingham Inst. for Sav. of MA* 14.00 1,297 18.2 14.75 10.50 14.50 -3.45 207.02 -5.08
HNFC Hinsdale Financial Corp. of IL 25.00 2,690 67.3 26.00 17.80 23.50 6.38 150.00 16.28
HBFW Home Bancorp of Fort Wayne IN 14.87 3,094 46.0 16.00 12.87 14.75 0.81 N.A. -2.49
HBBI Home Building Bancorp of IN 17.69 322 5.7 18.00 12.87 17.69 0.00 N.A. 7.21
HOMF Home Fed Bancorp of Seymour IN 27.25 2,224 60.6 27.25 21.25 26.75 1.87 81.67 2.83
HFMD Home Federal Corporation of MD(8) 10.75 2,519 27.1 11.37 5.87 10.25 4.88 10.26 38.71
HOFL Home Financial Corp. of FL(8) 13.62 24,771 337.4 16.25 13.06 13.81 -1.38 172.40 -12.13
HPBC Home Port Bancorp, Inc. of MA* 13.00 1,842 23.9 15.00 10.00 13.75 -5.45 62.50 10.64
HMCI Homecorp, Inc. of Rockford IL 17.50 1,126 19.7 18.50 14.00 17.50 0.00 75.00 5.29
LOAN Horizon Bancorp, Inc of TX* 10.75 1,387 14.9 11.50 7.50 10.50 2.38 N.A. 19.44
HZFS Horizon Fin'l. Services of IA 15.50 448 6.9 16.37 11.75 15.50 0.00 N.A. 1.64
HRZB Horizon Financial Corp. of WA* 12.56 6,580 82.6 13.75 11.37 12.75 -1.49 -6.48 -3.38
IBSF IBS Financial Corp. of NJ 14.00 11,410 159.7 15.46 11.93 14.00 0.00 N.A. 2.64
ISBF ISB Financial Corp. of LA 16.00 7,381 118.1 17.00 14.00 15.63 2.37 N.A. 6.67
IFSB Independence FSB of DC 8.00 1,279 10.2 9.25 6.75 7.50 6.67 300.00 -5.21
INCB Indiana Comm. Bank, SB of IN 13.69 922 12.6 16.75 11.75 14.00 -2.21 N.A. -10.23
IFSL Indiana Federal Corp. of IN 20.37 4,737 96.5 21.25 16.25 19.12 6.54 170.16 -4.14
INBI Industrial Bancorp of OH 11.87 5,554 65.9 16.00 11.75 11.75 1.02 N.A. -13.67
IWBK Interwest SB of Oak Harbor WA 24.00 6,434 154.4 25.12 13.75 24.37 -1.52 140.00 17.82
IPSW Ipswich SB of Ipswich MA* 10.75 1,174 12.6 10.87 4.60 10.50 2.38 N.A. 30.30
IROQ Iroquois Bancorp of Auburn NY* 14.50 2,349 34.1 15.50 11.12 14.50 0.00 107.14 11.54
JSBF JSB Financial, Inc. of NY 33.12 10,333 342.2 34.87 28.87 32.62 1.53 188.00 4.74
JXVL Jacksonville Bancorp of TX 10.62 2,662 28.3 11.99 7.32 10.12 4.94 N.A. -8.76
JXSB Jcksnville SB,MHC of IL(43.3%) 14.00 1,250 7.8 14.25 10.50 14.00 0.00 N.A. 0.94
JEBC Jefferson Bancorp of Gretna LA(8) 22.12 2,196 48.6 22.50 19.00 22.50 -1.69 N.A. 14.91
JSBA Jefferson Svgs Bancorp of MO 26.00 4,182 108.7 30.75 18.00 27.25 -4.59 N.A. -6.31
JOAC Joachim Bancorp of MO 12.25 760 9.3 13.50 11.50 12.75 -3.92 N.A. -9.26
KSAV KS Bancorp of Kenly NC 18.00 663 11.9 22.00 15.75 18.00 0.00 N.A. 2.86
KSBK KSB Bancorp of Kingfield ME* 22.00 374 8.2 22.25 15.50 22.25 -1.12 N.A. 14.29
KFBI Klamath First Bancorp of OR 14.12 11,254 158.9 14.25 12.50 14.25 -0.91 N.A. 2.69
LBFI L&B Financial of S. Springs TX(8) 16.25 1,584 25.7 16.87 11.50 16.50 -1.52 N.A. 14.04
LSBI LSB Bancorp of Lafayette IN 16.25 965 15.7 17.37 13.50 15.75 3.17 N.A. -5.80
LVSB Lakeview SB of Paterson NJ 20.50 2,266 46.5 20.50 15.23 19.00 7.89 N.A. 20.23
LARK Landmark Bancshares of KS 15.25 1,951 29.8 15.25 11.75 15.25 0.00 N.A. 10.91
LARL Laurel Capital Group of PA 14.75 1,508 22.2 16.50 13.67 15.00 -1.67 15.23 -4.84
LSBX Lawrence Savings Bank of MA* 5.50 4,245 23.3 6.62 3.75 5.37 2.42 59.88 19.05
LFCT Leader Fin. Corp of Memphis TN(8) 45.50 9,924 451.5 46.37 27.50 45.62 -0.26 N.A. 21.76
LFED Leeds FSB, MHC of MD (35.3) 13.75 3,448 17.2 16.75 12.25 14.00 -1.79 N.A. -3.51
LXMO Lexington B&L Fin. Corp. of MO 10.00 1,265 12.7 10.00 9.50 9.75 2.56 N.A. N.A.
LBCI Liberty Bancorp of Chicago IL 23.87 2,487 59.4 26.87 22.25 22.75 4.92 138.70 -5.47
LIFB Life Bancorp of Norfolk VA 14.12 10,403 146.9 16.62 13.81 14.12 0.00 N.A. -5.87
LFBI Little Falls Bancorp of NJ 9.87 3,042 30.0 11.50 9.50 9.87 0.00 N.A. N.A.
LOGN Logansport Fln. Corp of IN 13.75 1,322 18.2 13.75 11.25 12.75 7.84 N.A. 5.71
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HARB Harbor FSB, MHC of FL (45.7) 2.15 2.14 16.78 16.78 189.41
HRBF Harbor Federal Bancorp of MD 0.67 0.67 15.79 15.79 83.00
HFSA Hardin Bancorp of Hardin MO 0.48 0.48 15.16 15.16 78.81
HARL Harleysville SA of PA 1.71 1.74 15.02 15.02 212.90
HARS Harris SB, MHC of PA (23.1) 0.73 0.72 13.45 12.60 111.45
HFFB Harrodsburg 1st Fin Bcrp of KY 0.49 0.49 14.28 14.28 49.82
HHFC Harvest Home Fin. Corp. of OH 0.69 0.69 14.65 14.65 78.56
HAVN Haven Bancorp of Woodhaven NY 2.23 2.20 21.82 21.69 346.41
HVFD Haverfield Corp. of OH 1.19 1.12 14.81 14.76 178.38
HTHR Hawthorne Fin. Corp. of CA -0.59 -0.76 11.26 11.19 297.46
HSBK Hibernia SB of Quincy MA* 1.42 1.13 14.85 14.85 228.19
HBNK Highland Federal Bank of CA 0.43 0.42 15.08 15.08 192.47
HIFS Hingham Inst. for Sav. of MA* 1.45 1.45 13.88 13.88 138.31
HNFC Hinsdale Financial Corp. of IL 1.58 1.52 20.20 19.58 253.54
HBFW Home Bancorp of Fort Wayne IN 0.86 0.86 16.60 16.60 101.09
HBBI Home Building Bancorp of IN 0.59 0.59 18.61 18.61 131.70
HOMF Home Fed Bancorp of Seymour IN 3.18 2.76 22.59 21.72 272.60
HFMD Home Federal Corporation of MD(8) 1.00 0.98 7.41 7.31 86.02
HOFL Home Financial Corp. of FL(8) 0.83 0.79 12.64 12.64 49.55
HPBC Home Port Bancorp, Inc. of MA* 1.57 1.58 10.20 10.20 90.59
HMCI Homecorp, Inc. of Rockford IL 1.12 0.76 18.41 18.41 303.50
LOAN Horizon Bancorp, Inc of TX* 1.24 0.97 7.91 7.64 91.48
HZFS Horizon Fin'l. Services of IA 0.72 0.67 18.66 18.66 161.22
HRZB Horizon Financial Corp. of WA* 1.10 1.10 12.03 12.03 74.31
IBSF IBS Financial Corp. of NJ 0.71 0.72 13.53 13.53 66.34
ISBF ISB Financial Corp. of LA 0.98 0.98 16.37 16.36 84.50
IFSB Independence FSB of DC 1.10 0.52 13.36 11.48 206.21
INCB Indiana Comm. Bank, SB of IN 0.67 0.67 15.35 15.35 102.47
IFSL Indiana Federal Corp. of IN 1.56 1.46 14.88 13.83 151.51
INBI Industrial Bancorp of OH 0.82 0.82 11.26 11.26 58.88
IWBK Interwest SB of Oak Harbor WA 2.07 1.91 14.63 14.21 212.71
IPSW Ipswich SB of Ipswich MA* 1.43 1.25 7.22 7.22 114.20
IROQ Iroquois Bancorp of Auburn NY* 1.60 1.59 11.67 11.67 192.02
JSBF JSB Financial, Inc. of NY 2.19 2.32 32.70 32.70 149.84
JXVL Jacksonville Bancorp of TX 0.59 0.59 13.37 13.37 80.04
JXSB Jcksnville SB,MHC of IL(43.3%) 0.48 0.39 13.41 13.41 113.76
JEBC Jefferson Bancorp of Gretna LA(8) 1.21 1.21 16.13 16.13 120.69
JSBA Jefferson Svgs Bancorp of MO 1.52 1.49 19.19 15.72 273.30
JOAC Joachim Bancorp of MO 0.28 0.28 14.15 14.15 48.39
KSAV KS Bancorp of Kenly NC 1.51 1.53 20.56 20.53 135.55
KSBK KSB Bancorp of Kingfield ME* 2.67 2.56 23.33 21.47 340.57
KFBI Klamath First Bancorp of OR 0.66 0.66 14.90 14.90 53.73
LBFI L&B Financial of S. Springs TX(8) 0.93 0.92 15.50 15.50 90.42
LSBI LSB Bancorp of Lafayette IN 1.28 1.21 17.96 17.96 168.41
LVSB Lakeview SB of Paterson NJ 2.20 1.32 19.99 15.35 200.86
LARK Landmark Bancshares of KS 0.94 0.82 17.05 17.05 99.13
LARL Laurel Capital Group of PA 1.71 1.65 13.67 13.67 127.99
LSBX Lawrence Savings Bank of MA* 0.78 0.79 5.76 5.76 76.21
LFCT Leader Fin. Corp of Memphis TN(8) 4.04 3.95 25.71 25.71 320.21
LFED Leeds FSB, MHC of MD (35.3) 0.78 0.78 12.65 12.65 77.34
LXMO Lexington B&L Fin. Corp. of MO 0.62 0.61 14.27 14.27 48.50
LBCI Liberty Bancorp of Chicago IL 1.45 1.45 25.66 25.59 269.38
LIFB Life Bancorp of Norfolk VA 0.89 0.93 14.74 14.20 115.79
LFBI Little Falls Bancorp of NJ 0.18 0.13 14.29 13.14 93.87
LOGN Logansport Fla. Corp. of IN 0.76 0.75 15.09 15.49 57.86
</TABLE>
<PAGE>
RP FINANICAL. LC.
- ------------------------------------------
Finanical Services Industry Consultants
1700 North Moore Street, sulte 2210
Arlington, virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Port One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
---------------------- -----------------------------------------------
Shares Market 52 Week (1) % Change From
-------------- ----------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- -------- ------- ------- ------ ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- --------------------------------------
LONF London Financial Corp. of Dll 10.50 529 5.6 11.25 9.75 10.50 0.00 N.A. N.A.
LISB Long Island Bancorp of NY 30.12 24,859 748.8 30.44 18.75 29.87 0.84 N.A. 14.22
NAFB HAF Bancorp of IL 24.25 5,244 127.2 26.81 70.45 24.50 -1.02 185.29 -3.00
NBLF NBLA Financial Corp. of NO(8) 24.00 1,372 32.9 26.00 13.50 23.75 1.05 N.A. 23.90
NFBC NFB Corp of NI shawaka IN 14.00 2,078 29.1 16.25 13.00 14.00 0.00 N.A. -5.08
NLFB NLF Bancorp of Villanova PA 23.75 6,247 148.4 25.00 18.75 23.75 0.00 N.A. 6.74
NSBB NSB Bancorp of Middletowm NY* 16.12 2,833 45.7 27.25 15.00 15.75 2.36 61.20 -12.86
NSBF NSB Financial Corp. of NI 16.87 676 11.4 19.50 14.50 16.75 0.72 N.A. -11.21
NGNL Magna Bancorp of MS 35.00 6,959 243.6 36.25 21.00 34.00 2.94 600.00 21.74
NARN Marlon Capital Holdings of IN 20.75 2,003 41.6 20.75 18.50 20.00 3.75 N.A. 3.75
NSCX Marshalltown Fin. Corp. of IA(8) 15.50 1,411 21.9 16.75 12.75 15.50 0.00 N.A. -1.59
MFSL Maryland Fed. Bancorp of MD 28.50 3,150 9.8 33.25 28.50 29.62 -3.78 171.43 -5.00
MASB MassBank Corp. of Reading MA* 32.87 2,734 89.9 34.50 26.00 33.25 -1.14 166.59 3.53
MFLR Mayflower Co-op. Bank of MA* 14.75 873 12.1 14.75 9.50 14.25 3.51 195.00 34.09
NDBK Nedfofd Savings Bank of MA* 21.50 4,530 97.4 24.25 17.25 21.25 1.18 207.14 0.00
NERI Nerltrust FSB of Thibodaux LA 34.00 774 26.3 34.00 17.75 34.00 0.00 N.A. 9.68
MWBX Metro West of MA* 4.12 13,882 57.2 4.87 3.25 4.25 -3.06 0.00 0.00
MSEA Metropolitan Bancorp of MA 13.62 3,710 50.5 15.00 10.12 13.62 0.00 87.35 4.77
MCBS Mid Continent Bancshares of KS 18.50 2,061 38.1 19.00 15.50 18.62 -0.64 N.A. 0.00
MIFC Mid Iowa Financial Corp. of IA 6.25 1,730 10.8 7.87 4.75 6.25 0.00 25.00 -19.35
MCBN Mid-Coast Bancorp of NE 19.12 229 4.4 20.25 14.05 19.12 0.00 234.85 11.68
MIDC Midtown Bank of Kensington CT* 16.00 1,904 30.5 16.00 11.00 15.25 4.92 52.38 14.29
MWBI Midwest Bancshares, Inc. of IA 25.75 357 9.2 27.12 22.12 25.75 0.00 157.50 0.00
MWFD Midwest Fed. Fin. Corp of WI 15.87 1,613 25.9 16.00 8.25 16.00 -0.81 217.40 47.63
HFFC Hilton Fed. Fin. Corp. of OH 12.87 2,301 29.6 17.12 11.50 12.87 0.00 N.A. -20.80
MIVI Miss. View Hold. Co. of MN 11.25 968 10.8 12.25 9.38 11.25 0.00 N.A. -1.06
MBBC Monterey Bay Bancorp of CA 11.87 3,414 40.5 13.06 9.87 11.87 0.00 N.A. 2.15
MORG Morgan Financial Corp. of CO 12.25 833 10.2 12.50 9.00 12.25 0.00 N.A. 2.00
MFSB Mutual Bancompany of MO(8) 21.37 333 7.1 21.75 12.50 21.00 1.76 N.A. 18.72
MSBK Mutual SB, FSB of Bay City NI 5.37 4,271 22.9 7.37 5.25 5.50 -2.36 -38.63 -10.50
MHTB WH Thrift Bancshares of NH 9.87 1,690 16.7 11.00 9.00 10.12 -2.47 113.64 -2.47
MHSL NHS Financial, Inc. of CA(8) 10.87 2,523 27.4 11.00 7.75 10.87 0.00 38.83 8.70
NSLB NS&L Bancorp of Neosho MO 12.87 888 11.4 13.75 11.75 12.87 0.00 N.A. -2.87
NMSB Newmil Bancorp. of CT* 6.75 4,179 28.2 7.50 5.75 7.50 -10.00 5.97 -3.57
NFSL Newnan SB, FSB of Newnan GA 19.75 1,447 28.6 19.75 12.75 18.25 8.22 58.00 14.49
NASB North American SB of MO 30.50 2,276 69.4 32.37 22.50 29.50 3.39 617.65 -4.69
NBSI North Bancshares of Chicago IL 15.75 1,172 18.5 16.25 12.87 15.63 0.77 N.A. 16.67
FFFD North Central Bancshares of IA 11.00 4,011 44.1 12.68 9.22 10.25 7.32 N.A. 4.27
NEIB Northeast Indiana Bncrp of IN 11.75 2,062 24.2 13.50 11.25 11.50 2.17 N.A. -2.08
NSBK Northside SB of Bronx NY* 36.25 4,815 174.5 36.25 23.00 36.12 0.36 127.27 18.85
NWEQ Northwest Equity Corp. of WI 10.25 981 10.1 11.37 8.75 10.25 0.00 N.A. -5.70
NWSB Northwest SB, MHC of PA(29.9) 11.75 23,376 40.5 13.50 9.12 11.87 -1.01 N.A. -3.05
NSSY Norwalk Savings Society of CT* 20.37 2,371 48.3 21.88 15.37 19.87 2.52 N.A. 7.21
NSSB Norwich Financial Corp. of CT* 13.56 5,604 76.0 15.25 11.25 13.37 1.42 93.71 5.36
NTMG Nutmeg FS&LA of CT 7.25 708 5.1 7.75 5.17 7.50 -3.33 N.A. 8.70
OHSL OHSL Financial Corp. of OH 20.12 1,224 24.6 22.00 17.25 20.75 -3.04 N.A. -6.42
OSBF OSB Fin. Corp. of Oshkosh WI 24.00 1,141 27.4 24.87 22.75 22.75 5.49 108.70 1.05
OFCP Ottawa Financial Corp. of MI 16.37 5,455 89.3 16.75 13.31 16.25 0.74 N.A. 4.73
PFFB PFF Bancorp of Pomona CA 11.44 19,837 226.9 11.75 10.75 11.25 1.69 N.A. N.A.
PVFC PVF Capital Corp. of OH 20.25 1,549 31.4 20.75 12.04 19.00 6.58 203.60 10.96
PCCI Pacific Crest Capital of CA* 8.00 2,960 23.7 8.50 4.75 8.13 -1.60 N.A. 10.34
PALM Palfed, Inc. of Aiken SC 12.50 5,222 65.3 13.50 10.75 12.62 -0.95 -18.67 5.31
PSSB Palm Springs SB of CA(8) 13.87 1,313 15.7 14.00 7.52 13.75 0.87 206.86 58.51
PBCI Pamrapo Bancorp, Inc. of NJ 20.00 3,317 66.3 26.12 18.25 19.00 5.26 255.24 -6.98
PVSA Parkvale Financial Corp of PA 26.00 3,233 84.1 28.50 19.40 25.00 0.00 214.01 -5.45
<CAPTION>
Current Per Share Financials
-------------------------------------
Financial Institution Tangible
- --------------------- Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
NASDAQ Listed OTC Companies (continued) EPS(3) EPS(3) Share Share(4) Share
- -------------------------------------- ----- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
LONF London Financial Corp. of Dll 0.37 0.37 14.81 14.81 70.99
LISB Long Island Bancorp of NY 1.84 1.72 20.79 20.79 194.47
NAFB HAF Bancorp of IL 1.11 3.20 20.91 20.91 377.61
NBLF NBLA Financial Corp. of No(8) 1.00 1.00 20.67 20.67 142.18
NFBC NFB Corp of NI shawaka IN 0.63 0.62 18.67 18.67 96.68
NLFB NLF Bancorp of Villanova PA 1.86 1.65 22.46 21.90 282.67
NSBB NSB Bancorp of Middletowm NY* 0.83 0.89 15.53 15.26 160.30
NSBF NSB Financial Corp of NI 1.53 1.40 18.86 18.86 83.31
NGNL Magna Bancorp of MS 3.08 2.91 18.12 17.02 185.48
NARN Marlon Capital Holdings of IN 1.23 1.23 21.48 21.48 89.53
NSCX Marshalltown Fin. Corp. of IA(8) 0.29 0.29 13.71 13.71 89.46
MFSL Maryland Fed. Bancorp of MD 2.71 2.37 29.84 29.34 362.96
MASB MassBank Corp. of Reading MA* 3.24 3.17 31.91 31.91 314.16
MflR Mayflower Co-op. Bank of MA* 0.95 0.89 12.51 12.23 126.78
NDBK Nedfofd Savings Bank of MA* 2.15 2.11 19.24 17.45 216.55
NERI Nerltrust FSB of Thibodaux LA 2.89 2.89 21.83 21.83 293.44
MWBX Metro West of MA* 0.41 0.41 2.57 2.57 34.41
MSEA Metropolitan Bancorp of MA 1.39 1.50 13.71 12.41 209.75
MCBS Mid Continent Bancshares of KS 1.75 1.48 17.68 17.65 141.15
MIFC Mid Iowa Financial Corp. of IA 0.53 0.51 6.23 6.22 69.01
MCBN Mid-Coast Bancorp of NE 1.33 1.22 21.51 21.51 237.39
MIDC Midtown Bank of Kensington CT* 0.64 0.62 18.13 15.11 191.83
MWBI Midwest Bancshares, Inc. of IA 3.71 3.62 26.58 26.58 383.22
MWFD Midwest Federal Financial Corp. of 1.22 0.98 10.20 9.74 109.15
HFFC Hilton Fed. Fin. Corp. of OH 0.79 0.73 14.91 14.91 74.62
MIVI Miss. View Hold Co.of MN 0.95 0.90 13.78 13.78 73.05
MBBC Monterey Bay Bancorp of CA 0.18 0.22 13.99 13.82 93.40
MORG Morgan Financial Corp. of CO 0.80 0.77 12.61 12.61 86.02
??SB Mutual Bancompany of MO(B) 0.34 0.39 18.73 18.73 160.09
MSBK Mutual SB, FSB of Bay City NI 0.02 -0.16 9.19 9.19 168.46
MHTB WH Thrift Bancshares of NH 0.83 0.87 11.49 11.49 149.40
MHSL NHS Financial, Inc. of CA(8) 0.19 0.18 9.78 9.76 155.98
NSLB NS&L Bancorp of Neosho MO 0.59 0.55 15.62 15.62 66.50
NMSB Newmil Bancorp. of CT* 1.47 1.46 7.77 7.77 69.77
NFSL Newnan SB, FSB of Newnan GA 2.10 1.83 12.86 12.7 111.03
NASB North American SB of MO 3.74 3.57 21.44 20.58 291.85
NBSI North Bancshares of Chicago IL 0.54 0.49 16.92 16.92 97.56
FFFD North Central Bancshares of IA 0.65 0.61 13.72 13.72 47.52
NEIB Northeast Indiana Bncrp of IN 0.70 0.70 13.92 13.92 68.43
NSBK Northside SB of Bronx NY* 3.73 3.22 25.40 25.16 328.23
NWEQ Northwest Equity Corp. of WI 0.86 0.82 12.09 12.09 88.03
NWSB Northwest SB, MHC of PA(29.9) 0.73 0.73 8.07 7.97 75.61
NSSY Norwalk Savings Society of CT* 1.59 1.36 18.24 18.24 228.47
NSSB Norwich Financial Corp. of CT* 0.98 0.98 13.43 12.12 126.99
NTMG Nutmeg FS&LA of CT 0.76 0.46 7.20 7.20 120.33
OHSL OHSL Financial Corp. of OH 1.53 1.49 20.85 20.85 167.86
OSBF OSB Fin. Corp. of Oshkosh WI 0.38 0.66 28.00 28.00 222.36
OFCP Ottawa Financial Corp. of MI 0.72 0.72 14.92 11.96 136.66
PFFB PFF Bancorp of Pomona CA 0.10 0.10 14.57 14.40 101.23
PVFC PVF Capital Corp. of OH 2.26 1.99 13.77 13.77 205.36
PCCI Pacific Crest Capital of CA* 0.93 0.75 7.66 7.66 96.93
PALM Palfed, Inc. of Aiken SC 0.82 0.69 10.09 9.60 119.41
PSSB Palm Springs SB of CA(8) 1.07 0.57 10.34 10.34 169.84
PBCI Pamrapo Bancorp, Inc. of NJ 1.59 1.59 17.21 17.05 111.06
PVSA Parkvale Financial Corp of PA 2.90 2.71 20.99 20.89 282.71
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part One
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- --------------------------------------------------
Shares Market 52 Week (1) % Change From
---------------- --------------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- -------- ------ --------- -------- ------ ------ ------ ------- -------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PBIX Patriot Bank Corp. of PA 13.12 3,498 45.9 13.12 12.31 13.00 0.92 N.A. 1.94
PEEK Peekskill Fin. Corp. of NY 11.75 4,100 48.2 12.12 11.12 12.00 -2.08 N.A. -3.05
PFSB PennFed Fin. Services of NJ 15.87 5,077 80.6 16.00 12.25 15.12 4.96 N.A. 7.59
PWBC PennFirst Bancorp of PA 13.50 3,996 53.9 13.75 11.87 13.75 -1.82 69.17 0.00
PBKB People's SB of Brockton MA* 9.87 3,340 33.0 10.50 5.75 10.00 -1.30 66.16 -6.00
PFDC Peoples Bancorp of Auburn IN 20.25 2,356 47.7 22.50 18.00 20.62 -1.79 15.71 -1.79
PBCT Peoples Bank, MHC of CT(32.3)* 22.37 39,166 264.3 23.12 15.25 20.37 9.82 184.24 17.74
PHBK Peoples Heritage Fin Grp of ME* 20.25 17,028 344.8 22.75 15.00 20.12 0.65 32.27 -10.99
PBNB Peoples Sav. Fin. Corp. of CT* 20.50 1,915 39.3 22.50 18.00 20.50 0.00 107.70 6.49
PERM Permanent Bancorp of IN 15.75 2,186 34.4 18.50 14.00 16.00 -1.56 N.A. -3.08
PMFI Perpetual Midwest Fin. of IA 17.00 2,017 34.3 17.75 14.25 17.00 0.00 N.A. 3.03
PCBC Perry Co. Fin. Corp. of MO 17.50 856 15.0 21.50 14.75 17.25 1.45 N.A. -10.26
PHFC Pittsburgh Home Fin. of PA 10.37 2,182 22.6 11.12 9.87 10.00 3.70 N.A. N.A.
PFSL Pocahnts Fed, MHC of AR (46.4) 14.75 1,610 11.0 17.25 11.00 15.75 -6.35 N.A. -7.06
POBS Portsmouth Bank Shrs Inc of NH(8)* 13.87 5,737 79.6 15.20 10.78 13.75 0.87 33.24 -7.96
PKPS Poughkeepsie SB of NY 5.25 12,535 65.8 6.00 4.62 5.50 -4.55 -32.26 0.00
PETE Primary Bank of NH* 12.25 1,953 23.9 15.50 11.75 12.25 0.00 N.A. -2.93
PSAB Prime Bancorp, Inc. of PA 17.62 3,723 65.6 20.68 15.68 17.50 0.69 153.89 -12.99
PFNC Progress Financial Corp. of PA 6.25 3,730 23.3 7.25 4.75 6.50 -3.85 -43.23 11.01
PSBK Progressive Bank, Inc. of NY* 29.50 2,631 77.6 29.75 24.25 29.00 1.72 120.64 0.00
PULB Pulaski SB, MHC of MO (29.0) 14.75 2,094 8.9 16.50 11.75 14.00 5.36 N.A. -1.67
PULS Pulse Bancorp of S. River NJ 17.50 3,886 68.0 17.75 14.50 17.31 1.10 41.47 2.94
QCFB QCF Bancorp of Virginia MN 14.50 1,783 25.9 15.12 12.00 14.00 3.57 N.A. -1.69
QCBC Quaker City Bancorp of CA 14.37 3,928 56.4 14.75 11.12 14.50 -0.90 91.60 3.60
QCSB Queens County SB of NY* 47.62 6,110 291.0 47.87 31.50 47.62 0.00 N.A. 20.37
RCSB RCSB Financial, Inc. of NY* 25.62 13,514 346.2 25.81 19.00 24.75 3.52 108.12 7.87
RARB Raritan Bancorp. of Raritan NJ* 20.75 1,427 29.6 22.50 20.50 21.19 -2.08 112.82 -3.49
REDF RedFed Bancorp of Redlands CA 9.62 4,060 39.1 10.62 7.75 9.62 0.00 N.A. -4.94
RELY Reliance Bancorp of NY 15.63 9,226 144.2 16.50 13.12 15.50 0.84 N.A. 6.91
RELI Reliance Bancshares Inc of WI* 7.87 2,562 20.2 8.50 7.50 7.50 4.93 N.A. N.A.
RFED Roosevelt Fin. Grp. Inc. of MO 19.25 42,118 810.8 19.75 15.25 18.25 5.48 393.59 -0.62
RVSB Rvrview SB,FSB MHC of WA(40.3) 15.00 2,155 11.8 17.00 11.36 16.00 -6.25 N.A. 3.16
SCCB S. Carolina Comm. Bnshrs of SC 16.50 747 12.3 20.50 14.75 16.50 0.00 N.A. -8.94
SBFL SB Fing. Lakes MHC of NY(33.0) 16.00 1,785 9.4 16.75 9.50 16.50 -3.03 N.A. -1.54
SFED SFS Bancorp of Schenectady NY 12.00 1,395 16.7 13.50 11.00 11.75 2.13 N.A. -7.69
SGVB SGV Bancorp of W. Covina CA 8.62 2,728 23.5 10.12 8.00 8.62 0.00 N.A. -11.59
SISB SIS Bank of Sprinfield MA* 17.25 5,718 98.6 18.75 12.25 16.87 2.25 N.A. 5.38
SJSB SJS Bancorp of St. Joseph MI 20.75 983 20.4 20.75 14.75 20.75 0.00 N.A. 5.06
SWCB Sandwich Co-Op. Bank of MA* 20.00 1,873 37.5 21.50 15.63 19.37 3.25 132.02 9.59
SFBM Security Bancorp of MT 20.25 1,462 29.6 21.25 19.50 20.50 -1.22 161.29 -3.57
SECP Security Capital Corp. of WI 61.25 9,536 584.1 62.50 48.00 61.00 0.41 N.A. 1.66
SFSL Security First Corp. of OH 13.12 3,532 46.3 15.75 11.50 13.25 -0.98 -16.70 -7.93
SHFC Seven Hills Fin. Corp. of OH(8) 16.00 536 8.6 17.37 14.37 14.50 10.34 6.67 10.34
SMFC Sho-Me Fin. Corp. of MO 15.75 1,821 28.7 16.75 14.50 15.63 0.77 N.A. 5.00
SOBI Sobieski Bancorp of S. Bend IN 12.25 837 10.3 13.25 10.12 12.00 2.08 N.A. -5.77
SOSA Somerset Savings Bank of MA(8)* 1.47 16,652 24.5 1.88 1.12 1.50 -2.00 -71.29 7.30
SMBC Southern Missouri Bncrp of MO 14.75 1,724 25.4 17.50 13.50 14.00 5.36 N.A. -1.67
SWBI Southwest Bancshares of IL 27.12 1,871 50.7 28.25 26.00 27.25 -0.48 171.20 2.34
SVRN Sovereign Bancorp of PA 10.25 47,838 490.3 11.25 8.75 10.37 -1.16 129.31 6.33
STFR St. Francis Cap. Corp. of WI 25.25 5,857 147.9 28.00 19.00 25.50 -0.98 N.A. 8.60
SPBC St. Paul Bancorp, Inc. of IL 23.12 18,550 428.9 26.62 22.25 23.50 -1.62 37.05 -9.33
STND Standard Fin. of Chicago IL 15.12 16,765 253.5 15.37 12.87 15.25 -0.85 N.A. 3.42
SFFC StateFed Financial Corp. of IA 16.00 823 13.2 19.75 15.25 16.00 0.00 N.A. -11.70
SFIN Statewide Fin. Corp. of NJ 12.31 5,270 64.9 13.75 11.75 12.12 1.57 N.A. -5.74
STSA Sterling Financial Corp. of WA 14.75 5,426 80.0 14.75 10.23 14.00 5.36 62.27 7.27
<CAPTION>
Current Per Share Financials
------------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------ -------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PBIX Patriot Bank Corp. of PA 0.42 0.43 15.47 15.47 89.48
PEEK Peekskill Fin. Corp. of NY 0.44 0.46 14.49 14.49 47.24
PFSB PennFed Fin. Services of NJ 1.32 1.43 18.08 14.32 201.45
PWBC PennFirst Bancorp of PA 1.00 0.99 13.37 12.18 170.28
PBKB People's SB of Brockton MA* 0.74 0.53 7.87 7.45 159.62
PFDC Peoples Bancorp of Auburn IN 1.70 1.69 18.19 18.19 119.18
PBCT Peoples Bank, MHC of CT(32.3)* 1.90 1.53 14.12 14.12 176.59
PHBK Peoples Heritage Fin Grp of ME* 2.14 2.11 16.24 13.97 193.90
PBNB Peoples Sav. Fin. Corp. of CT* 1.80 1.88 22.94 21.22 212.15
PERM Permanent Bancorp of IN 0.53 0.53 19.26 18.98 172.88
PMFI Perpetual Midwest Fin. of IA 0.73 0.73 17.87 17.87 185.44
PCBC Perry Co. Fin. Corp. of MO 0.88 0.88 18.84 18.84 90.32
PHFC Pittsburgh Home Fin. of PA 0.54 0.54 13.58 13.58 82.64
PFSL Pocahnts Fed, MHC of AR (46.4) 1.23 1.26 13.64 13.64 229.43
POBS Portsmouth Bank Shrs Inc of NH(8) 1.06 0.89 11.68 11.68 46.61
PKPS Poughkeepsie SB of NY 1.23 1.62 5.69 5.69 66.95
PETE Primary Bank of NH* -0.08 -0.07 12.76 12.71 201.31
PSAB Prime Bancorp, Inc. of PA 1.61 1.43 15.44 14.44 163.57
PFNC Progress Financial Corp. of PA 0.81 0.63 5.15 5.11 93.30
PSBK Progressive Bank, Inc. of NY* 2.73 2.81 26.45 26.45 298.58
PULB Pulaski SB, MHC of MO (29.0) 0.73 0.69 10.82 10.82 85.68
PULS Pulse Bancorp of S. River NJ 1.36 1.37 13.84 13.84 116.43
QCFB QCF Bancorp of Virginia MN 1.28 1.28 17.81 17.81 81.66
QCBC Quaker City Bancorp of CA 0.84 0.81 17.43 17.33 176.42
QCSB Queens County SB of NY* 3.39 3.50 35.00 35.00 206.14
RCSB RCSB Financial, Inc. of NY* 2.43 2.39 22.19 21.45 304.21
RARB Raritan Bancorp. of Raritan NJ* 1.94 1.91 17.60 17.16 243.06
REDF RedFed Bancorp of Redlands CA -1.06 -1.02 11.90 11.90 211.32
RELY Reliance Bancorp of NY 1.14 1.09 16.75 11.30 189.07
RELI Reliance Bancshares Inc of WI* 0.29 0.29 11.06 11.06 19.67
RFED Roosevelt Fin. Grp. Inc. of MO 1.35 1.83 10.54 9.96 216.88
RVSB Rvrview SB,FSB MHC of WA(40.3) 1.21 1.09 10.71 9.48 97.22
SCCB S. Carolina Comm. Bnshrs of SC 0.80 0.80 16.80 16.80 59.02
SBFL SB Fing. Lakes MHC of NY(33.0) -0.52 -0.19 11.40 11.40 98.92
SFED SFS Bancorp of Schenectady NY 0.74 0.74 16.68 16.68 118.69
SGVB SGV Bancorp of W. Covina CA 0.12 0.12 11.94 11.94 122.09
SISB SIS Bank of Sprinfield MA* 2.29 2.33 14.73 14.73 198.53
SJSB SJS Bancorp of St. Joseph MI 0.88 0.86 17.89 17.89 153.36
SWCB Sandwich Co-Op. Bank of MA* 1.92 1.80 19.46 18.18 226.31
SFBM Security Bancorp of MT 1.71 1.27 21.98 18.92 246.25
SECP Security Capital Corp. of WI 2.99 3.09 59.20 59.20 350.74
SFSL Security First Corp. of OH 1.50 1.57 11.58 11.26 132.97
SHFC Seven Hills Fin. Corp. of OH(8) 0.31 0.29 18.01 18.01 84.91
SMFC Sho-Me Fin. Corp. of MO 1.08 1.07 17.36 17.36 144.91
SOBI Sobieski Bancorp of S. Bend IN 0.39 0.39 16.87 16.87 91.23
SOSA Somerset Savings Bank of MA(8)* 0.10 0.10 1.67 1.67 30.60
SMBC Southern Missouri Bncrp of MO 0.78 0.73 15.41 15.41 93.96
SWBI Southwest Bancshares of IL 2.27 2.26 22.42 22.42 186.82
SVRN Sovereign Bancorp of PA 1.13 1.02 7.15 4.63 175.82
STFR St. Francis Cap. Corp. of WI 2.70 1.84 23.08 22.04 221.20
SPBC St. Paul Bancorp, Inc. of IL 1.95 1.90 20.64 20.57 223.33
STND Standard Fin. of Chicago IL 1.03 0.93 16.05 16.04 130.43
SFFC StateFed Financial Corp. of IA 1.03 1.03 18.13 18.13 90.14
SFIN Statewide Fin. Corp. of NJ 0.53 0.65 13.36 13.32 120.39
STSA Sterling Financial Corp. of WA 0.92 0.90 11.55 9.26 276.01
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
----------------------- ------------------------------------------------
Shares Market 52 Week (1) % Change From
-------------- ------------------------
Price/ Outst- Capital- Last Last Dec 31, Dec 31,
Financial Institution Share(1) anding ization(9) High Low Week Week 1994(2) 1995(2)
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- --------
($) (000) ($Mil) ($) ($) ($) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
SSBK Strongsville SB of OH 21.25 2,531 53.8 21.75 17.00 21.50 -1.16 N.A. 8.97
SFSB SuburbFed Fin. Corp. of IL 17.50 1,261 22.1 18.17 14.83 17.62 -0.68 162.37 6.06
SBCN Suburban Bancorp. of OH 15.00 1,481 22.2 18.50 14.50 14.50 3.45 N.A. -18.92
SCSL Suncoast S&LA of Hollywood FL 6.12 1,990 12.2 7.19 5.81 6.25 -2.08 -10.13 -2.08
THRD TF Financial Corp. of PA 14.50 4,523 65.6 16.00 13.25 14.62 -0.82 N.A. -5.66
ROSE TR Financial Corp. of NY 26.50 8,948 237.1 27.75 17.37 26.12 1.45 N.A. 3.92
TPNZ Tappan Zee Fin. Corp. of NY 12.25 1,620 19.8 13.00 11.25 12.00 2.08 N.A. -2.93
PTRS The Potters S&L Co. of OH 16.25 533 8.7 18.50 15.25 16.25 0.00 N.A. -4.75
THIR Third Financial Corp. of OH(8) 31.87 1,136 36.2 32.00 18.25 31.25 1.98 N.A. 21.41
TSBS Trenton SB, FSB MHC of NJ(35.0 14.25 8,912 44.4 15.00 11.37 14.50 -1.72 N.A. 9.62
TRIC Tri-County Bancorp of WY 18.50 631 11.7 18.50 13.87 18.50 0.00 N.A. 12.12
THBC Troy Hill Bancorp of PA 13.00 1,068 13.9 14.00 11.50 13.37 -2.77 N.A. 0.00
TWIN Twin City Bancorp of TN 16.00 898 14.4 18.25 13.50 16.00 0.00 N.A. -5.88
UFRM United FS&LA of Rocky Mount NC 8.00 3,065 24.5 8.50 5.25 8.25 -3.03 146.15 6.67
UBMT United SB, FA of MT 18.25 1,223 22.3 18.75 17.00 18.25 0.00 73.81 4.29
VABF Va. Beach Fed. Fin. Corp of VA 7.37 4,962 36.6 9.94 6.81 7.62 -3.28 57.14 -4.90
VAFD Valley FSB of Sheffield AL(8) 32.00 367 11.7 35.25 24.87 32.00 0.00 204.76 -8.57
VFFC Virginia First Savings of VA 12.75 5,615 71.6 12.75 8.37 12.25 4.08 ***.** 12.14
WBCI WFS Bancorp of Wichita KS(8) 22.87 1,561 35.7 22.87 18.75 22.87 0.00 N.A. 3.39
WHGB WHG Bancshares of MD 11.00 1,620 17.8 11.75 10.87 11.50 -4.35 N.A. N.A.
WSFS WSFS Financial Corp. of DE* 7.50 14,179 106.3 10.00 5.63 7.87 -4.70 3.45 -15.67
WVFC WVS Financial Corp. of PA* 20.75 1,736 36.0 22.25 16.00 20.75 0.00 N.A. 8.53
WLDN Walden Bancorp of MA* 18.75 5,312 99.6 20.00 15.75 18.75 0.00 163.34 -1.32
WRNB Warren Bancorp of Peabody MA* 12.50 3,718 46.5 13.25 8.00 12.50 0.00 270.92 11.11
WFSL Washington FS&LA of Seattle WA 21.50 42,592 915.7 23.46 19.32 21.56 -0.28 47.36 -7.73
WAMU Washington Mutual Inc. of WA* 29.62 72,007 2,132.8 32.00 22.75 30.00 -1.27 59.59 2.60
WAYN Wayne S&L Co., MHC of OH(46.7) 20.75 1,492 13.7 22.00 17.14 20.50 1.22 N.A. -5.29
WCFB Webster CityFSB,MHC of IA(45.2 13.50 2,100 12.8 13.50 9.75 12.87 4.90 N.A. 8.00
WBST Webster Financial Corp. of CT 28.75 8,104 233.0 30.50 23.00 28.00 2.68 204.56 -2.54
WEFC Wells Fin. Corp. of Wells MN 11.50 2,188 25.2 11.50 9.06 11.25 2.22 N.A. 4.55
WCBI WestCo Bancorp of IL 21.62 2,678 57.9 22.00 14.83 22.00 -1.73 116.20 21.26
WSTR WesterFed Fin. Corp. of MT 14.37 4,396 63.2 17.12 14.25 14.37 0.00 N.A. -13.54
WOFC Western Ohio Fin. Corp. of OH 23.25 2,309 53.7 24.37 18.75 23.00 1.09 N.A. 0.00
WFCO Winton Financial Corp. of OH(8) 13.50 1,986 26.8 15.00 10.87 12.25 10.20 N.A. 24.20
FFWD Wood Bancorp of OH 18.50 1,034 19.1 19.50 14.12 18.75 -1.33 N.A. 2.78
WCHI Workingmens Cap. Hldgs of IN(8) 20.00 1,798 36.0 20.25 15.50 19.87 0.65 300.00 14.29
YFCB Yonkers Fin. Corp. of NY 9.38 3,571 33.5 10.12 9.31 9.62 -2.49 N.A. N.A.
YFED York Financial Corp. of PA 16.87 6,050 102.1 18.86 14.32 16.62 1.50 78.52 0.00
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
- --------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
SSBK Strongsville SB of OH 1.88 1.59 16.50 16.15 199.38
SFSB SuburbFed Fin. Corp. of IL 1.41 1.21 20.52 20.40 287.29
SBCN Suburban Bancorp. of OH 0.53 0.77 17.31 17.31 133.11
SCSL Suncoast S&LA of Hollywood FL 0.74 -0.92 6.59 6.56 234.42
THRD TF Financial Corp. of PA 0.94 0.91 16.43 16.43 114.79
ROSE TR Financial Corp. of NY 2.71 2.14 20.91 20.91 335.49
TPNZ Tappan Zee Fin. Corp. of NY 0.52 0.48 13.80 13.80 70.86
PTRS The Potters S&L Co. of OH 1.15 1.13 20.79 20.79 213.62
THIR Third Financial Corp. of OH(8) 1.89 1.69 24.87 24.87 137.05
TSBS Trenton SB, FSB MHC of NJ(35.0 1.05 0.70 11.08 10.83 58.20
TRIC Tri-County Bancorp of WY 0.98 0.95 20.75 20.75 116.38
THBC Troy Hill Bancorp of PA 1.02 0.93 16.73 16.73 75.36
TWIN Twin City Bancorp of TN 1.21 1.05 15.70 15.70 114.06
UFRM United FS&LA of Rocky Mount NC 0.73 0.64 6.81 6.81 82.27
UBMT United SB, FA of MT 1.32 1.31 20.12 20.12 85.51
VABF Va. Beach Fed. Fin. Corp of VA 0.32 0.01 8.28 8.28 125.95
VAFD Valley FSB of Sheffield AL(8) 1.09 1.06 26.14 26.14 323.23
VFFC Virginia First Savings of VA 1.48 1.22 9.82 9.46 127.15
WBCI WFS Bancorp of Wichita KS(8) 0.86 0.94 21.35 21.34 187.16
WHGB WHG Bancshares of MD 0.36 0.36 14.20 14.20 68.95
WSFS WSFS Financial Corp. of DE* 1.91 1.13 5.21 5.14 88.82
WVFC WVS Financial Corp. of PA* 1.63 1.82 20.93 20.93 138.41
WLDN Walden Bancorp of MA* 1.58 1.75 17.98 15.38 191.88
WRNB Warren Bancorp of Peabody MA* 1.56 1.49 8.54 8.54 95.45
WFSL Washington FS&LA of Seattle WA 1.88 1.80 14.04 13.36 115.73
WAMU Washington Mutual Inc. of WA* 2.62 2.61 19.33 17.19 310.31
WAYN Wayne S&L Co., MHC of OH(46.7) 0.95 0.89 15.32 15.32 166.56
WCFB Webster CityFSB,MHC of IA(45.2 0.51 0.51 10.32 10.32 46.31
WBST Webster Financial Corp. of CT 2.00 2.14 24.27 18.45 470.53
WEFC Wells Fin. Corp. of Wells MN 0.72 0.70 13.40 13.40 89.66
WCBI WestCo Bancorp of IL 1.50 1.49 18.07 18.07 115.48
WSTR WesterFed Fin. Corp. of MT 0.99 0.93 17.77 17.77 133.82
WOFC Western Ohio Fin. Corp. of OH 1.10 0.83 25.19 23.72 138.40
WWFC Westwood Fin. Corp. of NJ 0.99 0.99 14.61 12.51 136.46
WFCO Winton Financial Corp. of OH(8) 1.04 0.85 10.42 10.14 132.09
FFWD Wood Bancorp of OH 1.56 1.51 19.72 19.72 135.12
WCHI Workingmens Cap. Hldgs of IN(8) 1.07 1.05 14.55 14.55 118.84
YFCB Yonkers Fin. Corp. of NY 0.60 0.66 13.07 13.07 67.39
YFED York Financial Corp. of PA 1.65 1.44 15.22 15.22 173.33
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
Key Financial Ratios Asset Quality Ratios
----------------------------------------------------------- ----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ------------------------ ------------- ------ ------- ------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs(7) Loans
------ ------ ------ ------ ------ ------ ------ ------ ------- ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHCs)
- ----------------------------------------------
SAIF-Insured Thrifts(322) 13.31 13.12 0.87 8.17 6.97 0.81 7.35 0.97 127.98 0.88
NYSE Traded Companies(12) 6.31 5.96 0.70 11.72 7.94 0.58 9.64 1.58 62.19 1.33
AMEX Traded Companies(17) 18.40 18.32 0.83 6.71 5.46 0.80 6.35 0.61 132.94 0.70
NASDAQ Listed OTC Companies(295) 13.32 13.13 0.88 8.10 7.01 0.83 7.31 0.95 131.00 0.87
California Companies(25) 7.62 7.48 0.33 5.18 3.79 0.27 4.11 2.34 50.59 1.32
Florida Companies(10) 7.64 7.46 0.75 12.69 9.73 0.53 6.73 1.08 105.23 1.01
Mid-Atlantic Companies(63) 11.93 11.63 0.87 9.02 7.89 0.84 8.63 1.25 85.49 1.09
Mid-West Companies(149) 14.72 14.58 0.94 7.87 6.90 0.87 7.12 0.59 169.82 0.71
New England Companies(9) 8.08 7.46 0.63 8.69 8.61 0.53 7.21 1.35 49.90 1.10
North-West Companies(6) 10.61 10.24 0.96 10.34 7.28 0.90 9.45 0.87 71.09 0.84
South-East Companies(45) 15.70 15.54 1.02 8.66 6.71 0.97 8.06 0.99 124.58 0.86
South-West Companies(7) 12.45 12.34 0.72 7.33 8.19 0.69 6.85 0.86 41.09 0.86
Western Companies (Excl CA)(8) 17.09 16.91 1.04 7.61 6.38 0.99 7.17 0.26 211.26 0.57
Thrift Strategy(248) 14.89 14.72 0.87 7.09 6.36 0.83 6.64 0.86 137.28 0.81
Mortgage Banker Strategy(39) 7.52 7.21 0.84 11.92 9.29 0.64 8.38 1.32 77.80 0.94
Real Estate Strategy(16) 9.03 8.89 0.90 10.74 8.87 0.92 11.02 1.86 84.24 1.54
Diversified Strategy(15) 7.97 7.78 0.97 12.92 8.05 0.92 12.63 1.02 151.77 1.27
Retail Banking Strategy(4) 9.43 9.18 0.73 9.92 9.80 0.58 7.67 1.37 76.19 0.92
Companies Issuing Dividends(244) 13.25 13.04 0.95 8.76 7.41 0.88 7.95 0.84 134.57 0.84
Companies Without Dividends(78) 13.49 13.38 0.64 6.35 8.45 0.60 5.49 1.38 106.29 1.01
Equity/Assets less than 6%(29) 4.98 4.73 0.52 10.66 7.40 0.41 8.06 1.74 83.49 1.06
Equity/Assets 6-12%(147) 8.54 8.24 0.84 10.30 8.45 0.75 9.15 1.17 110.62 1.03
Equity/Assets less than 12%(146) 19.67 19.61 0.98 5.58 5.41 0.96 5.44 0.58 156.51 0.69
Converted Last 3 Mths (no MHC)(20) 23.59 23.58 0.82 4.54 4.26 0.83 4.66 0.78 157.79 0.79
Actively Traded Companies(53) 8.58 8.30 0.92 11.34 8.38 0.88 10.65 1.43 85.94 1.03
Market Value Below $20 Million(83) 15.71 15.67 0.84 6.73 6.84 0.75 5.38 0.86 117.93 0.72
Holding Company Structure(275) 13.89 13.68 0.87 7.76 6.71 0.82 7.12 0.92 130.77 0.85
Assets Over $1 Billion(61) 8.05 7.58 0.83 11.08 8.20 0.76 10.10 1.15 101.18 1.03
Assets $500 Million-$1 Billion(56) 11.31 11.07 0.85 8.76 7.01 0.81 8.14 1.34 133.20 1.03
Assets $250-$500 Million(79) 11.54 11.35 0.83 8.37 7.42 0.74 6.84 0.93 135.90 0.90
Assets less than $250 Million(126) 18.06 18.04 0.93 6.28 6.03 0.89 5.88 0.70 135.29 0.72
Goodwill Companies(133) 9.27 8.82 0.82 9.66 7.66 0.74 8.47 1.17 97.22 0.96
Non-Goodwill Companies(189) 16.24 16.24 0.91 7.10 6.46 0.87 6.55 0.81 152.50 0.82
Acquirors of FSLIC Cases(14) 7.07 6.70 0.88 12.89 9.72 0.84 12.16 1.45 51.18 0.92
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------------- --------------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ ---------- ------- ------- ------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. SAIF-Insured Thrifts(no MHCs)
- ----------------------------------------------
SAIF-Insured Thrifts(322) 14.18 104.06 13.03 107.30 15.01 0.34 1.87 25.85
NYSE Traded Companies(12) 12.83 134.82 8.65 143.08 14.52 0.42 1.49 16.50
AMEX Traded Companies(17) 15.97 93.51 16.27 94.20 17.16 0.35 2.37 26.64
NASDAQ Listed OTC Companies(295) 14.16 103.31 13.03 106.48 14.93 0.33 1.86 26.26
California Companies(25) 13.77 101.59 7.45 104.33 15.53 0.27 1.13 16.04
Florida Companies(10) 11.59 107.59 7.96 110.30 13.96 0.16 0.87 11.16
Mid-Atlantic Companies(63) 12.97 101.95 11.48 106.87 13.55 0.32 1.78 23.48
Mid-West Companies(149) 14.83 102.90 14.16 105.10 15.73 0.34 1.91 27.20
New England Companies(9) 11.32 93.54 7.44 102.87 12.94 0.51 2.76 32.40
North-West Companies(6) 14.91 134.17 13.05 143.27 14.27 0.27 1.32 18.23
South-East Companies(45) 14.87 113.25 16.53 115.83 15.26 0.37 2.23 30.64
South-West Companies(7) 13.51 81.31 9.90 85.14 14.38 0.30 2.13 21.90
Western Companies (Excl CA)(8) 15.12 102.67 16.20 104.74 16.03 0.43 2.49 36.99
Thrift Strategy(248) 14.97 98.51 14.01 100.93 15.57 0.33 1.97 28.45
Mortgage Banker Strategy(39) 11.24 120.44 9.15 128.56 13.21 0.34 1.52 16.80
Real Estate Strategy(16) 12.84 110.26 9.66 112.25 13.03 0.17 0.83 8.83
Diversified Strategy(15) 12.25 148.58 11.72 153.48 12.72 0.60 2.41 27.99
Retail Banking Strategy(4) 12.29 91.51 8.42 94.49 16.07 0.14 1.33 18.06
Companies Issuing Dividends(244) 14.18 108.11 13.49 111.82 14.92 0.45 2.48 34.59
Companies Without Dividends(78) 14.18 91.53 11.59 93.31 15.40 0.00 0.00 0.00
Equity/Assets less than 6%(29) 10.98 119.25 5.98 128.32 12.88 0.24 1.17 13.46
Equity/Assets 6-12%(147) 12.50 113.16 9.57 118.30 13.50 0.36 1.83 22.52
Equity/Assets less than 12%(146) 16.89 91.77 17.86 92.26 17.24 0.33 2.06 32.14
Converted Last 3 Mths (no MHC)(20) 17.67 77.24 18.44 77.29 18.20 0.06 0.48 2.14
Actively Traded Companies(53) 11.72 124.78 10.51 131.82 12.36 0.49 2.12 25.20
Market Value Below $20 Million(83) 14.84 87.10 13.44 87.59 15.84 0.26 1.76 25.31
Holding Company Structure(275) 14.60 103.31 13.45 105.59 15.24 0.35 1.92 26.84
Assets Over $1 Billion(61) 12.29 126.35 9.95 136.51 13.35 0.48 2.00 23.95
Assets $500 Million-$1 Billion(56) 13.77 107.05 11.82 110.72 14.69 0.29 1.57 22.61
Assets $250-$500 Million(79) 13.49 104.07 11.62 105.98 14.65 0.33 1.97 26.11
Assets less than $250 Million(126) 15.98 91.19 16.06 91.49 16.42 0.29 1.90 28.43
Goodwill Companies(133) 12.64 113.80 10.29 121.50 13.91 0.39 1.89 24.16
Non-Goodwill Companies(189) 15.39 97.00 15.01 97.00 15.90 0.30 1.87 27.15
Acquirors of FSLIC Cases(14) 10.89 130.26 9.07 137.91 12.61 0.43 1.99 21.15
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances; ROI (return on investment) is current EPS divided by
current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no NHCs)
- ---------------------------------------------
BIF-Insured Thrifts(71) 10.43 10.18 0.93 10.98 8.80 0.88 10.18 1.68 93.53 1.49
NYSE Traded Companies(3) 5.37 5.33 0.24 4.68 3.82 0.30 5.92 2.64 36.28 1.17
AMEX Traded Companies(4) 12.21 11.77 0.75 8.27 7.54 0.53 5.60 2.73 45.60 1.37
NASDAQ Listed OTC Companies(64) 10.48 10.24 0.97 11.39 9.06 0.93 10.65 1.60 97.47 1.51
California Companies(2) 6.78 6.77 0.61 11.41 7.04 0.51 9.40 4.57 31.17 1.83
Mid-Atlantic Companies(19) 10.53 10.46 0.83 10.28 8.05 0.81 9.47 1.92 80.22 1.43
Mid-West Companies(1) 56.23 56.23 1.47 2.62 3.68 1.47 2.62 0.00 0.00 0.49
New England Companies(44) 9.03 8.68 0.94 11.21 9.40 0.89 10.47 1.56 87.70 1.60
North-West Companies(4) 13.71 13.54 1.12 12.13 8.04 1.11 12.03 0.31 256.34 0.95
South-West Companies(1) 8.65 8.35 1.54 17.77 11.53 1.20 13.90 0.42 127.82 0.78
Thrift Strategy(44) 12.01 11.76 0.94 10.03 8.54 0.90 9.53 1.57 88.31 1.45
Mortgage Banker Strategy(11) 7.24 6.88 0.74 10.13 8.21 0.73 10.10 1.16 121.43 1.22
Real Estate Strategy(7) 9.61 9.56 1.24 14.45 9.78 1.12 12.71 2.07 95.15 1.73
Diversified Strategy(7) 6.87 6.55 1.16 18.46 13.00 0.98 15.19 2.69 91.76 2.03
Retail Banking Strategy(2) 6.32 6.16 0.05 0.82 1.05 0.05 0.86 1.31 68.51 1.24
Companies Issuing Dividends(50) 9.20 8.89 1.01 11.72 9.42 0.97 11.11 1.14 108.75 1.39
Companies Without Dividends(21) 13.27 13.18 0.74 9.26 7.36 0.68 8.03 3.25 48.95 1.72
Equity/Assets less than 6%(8) 5.38 5.31 0.74 14.03 9.43 0.58 10.93 3.69 44.18 1.81
Equity/Assets 6-12%(51) 8.25 7.93 0.95 11.78 9.57 0.90 11.09 1.50 94.12 1.51
Equity/Assets less than 12%(12) 23.69 23.69 0.97 5.38 4.78 0.99 5.44 1.31 137.58 1.19
Converted Last 3 Mths (no MHC)(3) 36.19 36.19 0.95 2.82 3.58 1.01 3.03 0.00 0.00 1.14
Actively Traded Companies(30) 8.50 8.10 0.90 10.73 8.87 0.89 10.63 1.29 95.02 1.52
Market Value Below $20 Million(11) 9.98 9.72 0.80 9.69 8.62 0.71 8.54 1.54 89.01 1.21
Holding Company Structure(45) 11.59 11.33 1.04 11.60 9.26 1.00 10.88 1.48 101.04 1.57
Assets Over $1 Billion(17) 7.83 7.54 0.98 13.40 9.74 0.93 12.27 1.99 79.90 1.57
Assets $500 Million-$1 Billion(17) 10.22 9.93 0.93 10.87 8.54 0.84 9.76 1.17 110.69 1.58
Assets $250-$500 Million(22) 10.17 9.94 0.89 10.50 8.68 0.88 10.14 2.02 80.14 1.51
Assets less than $250 Million(15) 13.41 13.22 0.94 9.44 8.31 0.88 8.67 1.43 108.50 1.31
Goodwill Companies(35) 7.85 7.35 0.82 10.93 8.65 0.74 9.68 1.44 84.25 1.41
Non-Goodwill Companies(36) 12.93 12.93 1.03 11.02 8.94 1.02 10.66 1.93 103.15 1.57
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHCs)
- ---------------------------------------------
BIF-Insured Thrifts(71) 11.39 110.33 10.75 113.88 11.64 0.37 2.00 22.27
NYSE Traded Companies(3) 19.29 112.70 5.99 113.49 14.11 0.00 0.00 0.00
AMEX Traded Companies(4) 11.11 99.61 11.08 105.97 13.51 0.52 2.64 32.48
NASDAQ Listed OTC Companies(64) 11.25 111.00 10.90 114.45 11.51 0.37 2.03 22.34
California Companies(2) 8.60 99.19 6.78 99.25 10.67 0.00 0.00 0.00
Mid-Atlantic Companies(19) 12.56 110.36 10.85 111.48 12.07 0.37 1.61 19.16
Mid-West Companies(1) 0.00 71.16 40.01 71.16 0.00 0.00 0.00 0.00
New England Companies(44) 11.11 110.11 9.65 114.95 11.57 0.40 2.36 25.15
North-West Companies(4) 10.62 121.27 14.98 126.04 10.68 0.40 2.10 28.55
South-West Companies(1) 8.67 135.90 11.75 140.71 11.08 0.16 1.49 12.90
Thrift Strategy(44) 11.78 105.96 11.66 109.14 11.88 0.38 2.10 23.88
Mortgage Banker Strategy(11) 11.87 113.81 8.23 118.90 11.75 0.38 2.06 23.71
Real Estate Strategy(7) 10.97 126.85 12.46 127.65 12.14 0.31 1.51 15.05
Diversified Strategy(7) 8.88 124.46 8.50 131.34 9.65 0.34 1.80 17.14
Retail Banking Strategy(2) 0.00 90.11 5.69 92.27 0.00 0.32 1.91 0.00
Companies Issuing Dividends(50) 11.07 114.87 10.43 119.46 11.24 0.53 2.87 31.29
Companies Without Dividends(21) 12.39 99.82 11.50 100.97 12.85 0.00 0.00 0.00
Equity/Assets less than 6%(8) 12.31 122.37 6.56 124.14 12.93 0.05 0.47 6.31
Equity/Assets 6-12%(51) 10.89 113.55 9.34 118.07 11.15 0.45 2.45 26.26
Equity/Assets less than 12%(12) 14.90 88.01 19.91 88.01 14.53 0.19 0.79 13.43
Converted Last 3 Mths (no MHC)(3) 21.68 71.63 25.91 71.63 18.87 0.00 0.00 0.00
Actively Traded Companies(30) 11.83 112.19 9.42 117.80 11.48 0.46 2.43 25.33
Market Value Below $20 Million(11) 10.64 98.44 9.21 102.23 12.21 0.23 1.57 14.71
Holding Company Structure(45) 10.90 110.13 11.90 114.05 11.20 0.40 2.17 24.86
Assets Over $1 Billion(17) 11.03 122.64 9.67 127.82 10.90 0.43 1.64 18.01
Assets $500 Million-$1 Billion(17) 11.04 111.35 10.98 115.50 12.22 0.53 2.78 32.38
Assets $250-$500 Million(22) 12.07 107.70 10.28 110.25 11.46 0.32 2.02 23.46
Assets less than $250 Million(15) 11.09 101.42 12.19 104.20 12.15 0.23 1.59 14.99
Goodwill Companies(35) 11.95 112.44 8.77 119.65 12.21 0.48 2.49 29.15
Non-Goodwill Companies(36) 10.81 108.29 12.68 108.29 11.08 0.26 1.53 16.06
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances; ROI (return on investment) is current EPS divided by
current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14,1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 11.89 11.67 0.78 6.84 5.19 0.73 6.57 0.69 83.87 0.82
BIF-Insured Thrifts(2) 10.14 10.14 0.80 9.31 6.00 0.69 7.88 2.36 44.03 1.42
NASDAQ Listed OTC Companies(21) 11.72 11.52 0.78 7.09 5.27 0.73 6.70 0.85 79.44 0.88
Florida Companies(3) 10.30 10.26 0.89 8.83 6.78 0.86 8.60 0.72 107.38 0.97
Mid-Atlantic Companies(9) 12.45 12.12 0.68 5.25 4.03 0.68 5.55 1.11 50.81 0.89
Mid-West Companies(7) 12.13 12.12 0.74 6.66 5.19 0.64 5.90 0.59 94.58 0.76
New England Companies(1) 8.00 8.00 1.11 14.66 8.49 0.89 11.81 1.66 65.45 1.65
North-West Companies(1) 11.02 9.75 1.30 11.97 8.07 1.17 10.78 0.26 119.16 0.51
Thrift Strategy(18) 11.97 11.81 0.74 6.39 4.94 0.70 6.19 0.84 77.83 0.85
Mortgage Banker Strategy(2) 11.02 9.75 1.30 11.97 8.07 1.17 10.78 0.26 119.16 0.51
Diversified Strategy(1) 8.00 8.00 1.11 14.66 8.49 0.89 11.81 1.66 65.45 1.65
Companies Issuing Dividends(21) 11.72 11.52 0.78 7.09 5.27 0.73 6.70 0.85 79.44 0.88
Equity/Assets less than 6%(1) 5.95 5.95 0.56 9.43 8.34 0.58 9.66 0.26 146.44 1.14
Equity/Assets 6-12%(13) 9.93 9.69 0.68 7.17 5.22 0.68 7.14 0.89 87.47 0.90
Equity/Assets less than 12%(7) 15.61 15.44 1.00 6.61 4.94 0.83 5.53 0.87 46.77 0.79
Actively Traded Companies(1) 9.49 8.24 0.86 9.52 7.87 0.83 9.13 0.96 55.11 1.08
Market Value Below $20 Million(1) 11.79 11.79 0.43 3.82 3.43 0.35 3.10 0.52 90.42 0.60
Holding Company Structure(1) 9.49 8.24 0.86 9.52 7.87 0.83 9.13 0.96 55.11 1.08
Assets Over $1 Billion(4) 10.25 9.95 0.95 9.86 6.33 0.87 8.88 1.13 67.59 1.17
Assets $500 Million-$1 Billion(6) 11.26 10.96 0.90 7.95 6.02 0.83 7.78 0.76 81.42 0.95
Assets $250-$500 Million(3) 10.24 10.22 0.74 7.85 6.77 0.73 7.72 0.15 187.85 0.64
Assets less than $250 Million(8) 13.17 13.01 0.65 5.11 3.76 0.60 4.70 1.09 51.85 0.80
Goodwill Companies(10) 11.19 10.75 0.95 8.90 6.39 0.82 7.79 0.68 93.85 0.80
Non-Goodwill Companies(11) 12.15 12.15 0.65 5.60 4.36 0.66 5.82 0.99 65.03 0.94
MHC Institutions(21) 11.72 11.52 0.78 7.09 5.27 0.73 6.70 0.85 79.44 0.88
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
- ---------------------------------
SAIF-Insured Thrifts(19) 16.51 123.04 14.76 125.84 17.68 0.60 3.82 44.90
BIF-Insured Thrifts(2) 11.77 135.65 13.27 135.65 14.62 0.58 3.59 42.11
NASDAQ Listed OTC Companies(21) 16.20 124.30 14.61 126.82 17.48 0.60 3.79 44.59
Florida Companies(3) 15.18 120.89 12.19 121.32 15.80 0.83 4.59 63.26
Mid-Atlantic Companies(9) 16.66 119.55 15.05 123.35 18.78 0.44 3.15 35.56
Mid-West Companies(7) 17.99 124.06 15.31 124.15 18.42 0.71 4.57 54.74
New England Companies(1) 11.77 158.43 12.67 158.43 14.62 0.80 3.58 42.11
North-West Companies(1) 12.40 140.06 15.43 158.23 13.76 0.20 1.33 16.53
Thrift Strategy(18) 16.83 121.53 14.68 123.32 17.98 0.61 3.94 48.96
Mortgage Banker Strategy(2) 12.40 140.06 15.43 158.23 13.76 0.20 1.33 16.53
Diversified Strategy(1) 11.77 158.43 12.67 158.43 14.62 0.80 3.58 42.11
Companies Issuing Dividends(21) 16.20 124.30 14.61 126.82 17.48 0.60 3.79 44.59
Equity/Assets less than 6%(1) 11.99 108.14 6.43 108.14 11.71 0.80 5.42 65.04
Equity/Assets 6-12%(13) 15.14 125.03 12.38 128.28 16.75 0.59 3.29 43.28
Equity/Assets less than 12%(7) 18.95 125.35 19.62 126.99 20.74 0.60 4.43 33.33
Actively Traded Companies(1) 12.70 112.66 10.69 129.74 13.24 0.40 2.54 32.26
Market Value Below $20 Million(1) 0.00 104.40 12.31 104.40 0.00 0.40 2.86 0.00
Holding Company Structure(1) 12.70 112.66 10.69 129.74 13.24 0.40 2.54 32.26
Assets Over $1 Billion(4) 17.05 143.47 14.49 146.93 18.11 0.56 3.18 41.60
Assets $500 Million-$1 Billion(6) 14.36 114.19 13.05 117.74 17.13 0.63 3.71 48.03
Assets $250-$500 Million(3) 15.17 112.14 11.42 112.35 15.54 0.72 4.29 54.74
Assets less than $250 Million(8) 18.62 129.25 17.02 131.52 19.48 0.56 3.90 16.53
Goodwill Companies(10) 15.48 127.29 14.19 132.90 17.31 0.48 2.89 34.96
Non-Goodwill Companies(11) 17.01 121.85 14.96 121.85 17.67 0.70 4.53 63.85
MHC Institutions(21) 16.20 124.30 14.61 126.82 17.48 0.60 3.79 44.59
</TABLE>
(1) Average of high/low or bid/ask price per share.
(2) Or since offering price if converted or first listed in 1994 or 1995.
Percent change figures are actual year-to-date and are not annualized
(3) EPS (earnings per share) is based on actual trailing twelve month data and
is not shown on a pro forma basis.
(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).
(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based
on trailing twelve month common earnings and average common equity and
assets balances; ROI (return on investment) is current EPS divided by
current price.
(6) Annualized, based on last regular quarterly cash dividend announcement.
(7) Indicated dividend as a percent of trailing twelve month earnings.
(8) Excluded from averages due to actual or rumored acquisition activities or
unusual operating characteristics.
* All thrifts are SAIF insured unless otherwise noted with an asterisk.
Parentheses following market averages indicate the number of institutions
included in the respective averages. All figures have been adjusted for
stock splits, stock dividends, and secondary offerings.
Source: Corporate reports and offering circulars for publicly traded companies,
and RP Financial, Inc. calculations. The information provided in this
report has been obtained from sources we believe are reliable, but we
cannot guarantee the accuracy or completeness of such information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
(continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 4.61 4.32 0.80 17.30 13.71 0.10 2.09 2.30 33.64 1.25
CAL CalFed Inc. of Los Angeles CA 4.52 4.52 0.58 13.78 9.15 0.55 12.96 1.61 77.66 1.85
CSA Coast Savings Financial of CA 5.16 5.08 0.46 9.62 6.41 0.40 8.33 1.62 48.77 1.17
CFB Commercial Federal Corp. of NE 6.05 5.43 0.84 15.46 8.98 0.84 15.37 1.02 73.31 1.02
DME Dime Savings Bank, FSB of NY* 5.08 5.03 0.34 6.97 5.18 0.46 9.54 NA NA 1.24
DSL Downey Financial Corp. of CA 8.33 8.18 0.61 7.57 8.10 0.53 6.62 2.03 29.06 0.66
FRC First Republic Bancorp of CA* 5.65 5.64 0.14 2.38 2.46 0.13 2.31 2.64 36.28 1.09
FED FirstFed Fin. Corp. of CA 4.69 4.61 0.18 3.94 4.06 0.20 4.38 2.56 73.84 2.55
GLN Glendale Fed. Bk, FSB of CA 5.37 4.95 0.12 2.49 2.27 0.29 5.87 2.08 65.06 1.78
GDW Golden West Fin. Corp. of CA 6.66 6.27 0.75 11.76 8.11 0.74 11.63 1.37 31.65 0.53
GWF Great Western Fin. Corp. of CA 5.78 5.06 0.60 10.98 8.08 0.54 10.01 1.81 43.93 1.15
GPT GreenPoint Fin. Corp. of NY(8)* 10.58 6.03 0.92 6.87 6.91 0.96 7.17 2.94 24.69 1.67
SFB Standard Fed. Bancorp of MI 6.96 5.93 0.94 13.84 10.28 0.85 12.50 0.45 59.52 0.38
TCB TCF Financial Corp. of MN 7.69 7.35 1.37 20.13 8.39 1.29 19.04 0.92 102.63 1.23
WES Westcorp Inc. of Orange CA 9.89 9.86 1.21 13.72 7.78 0.60 6.86 1.24 107.17 2.37
AMEX Traded Companies
- ---------------------
BKC American Bank of Waterbury CT* 8.57 8.12 0.96 10.74 8.24 0.39 4.36 2.95 33.54 1.46
BFD BostonFed Bancorp of MA 13.51 13.51 0.21 2.42 1.63 0.18 2.05 1.67 40.40 0.85
CFX Cheshire Fin. Corp. of NH* 9.46 8.44 0.99 10.03 8.00 0.82 8.28 1.09 76.02 1.08
CZF Citisave Fin. Corp. of LA 18.18 18.17 1.28 9.16 7.16 0.88 6.28 0.30 38.75 0.21
CBK Citizens First Fin.Corp. of IL 15.57 15.57 0.63 4.01 5.67 0.68 4.37 NA NA 0.24
ESX Essex Bancorp of VA(8) 2.57 -0.08 0.32 7.80 43.11 -0.78 -18.91 3.32 47.35 1.88
FCB Falmouth Co-Op Bank of MA* 24.56 24.56 0.45 2.40 2.44 0.47 2.50 NA NA 1.31
GAF GA Financial Corp. of PA 22.44 22.44 0.58 4.73 3.00 0.78 6.30 0.19 78.79 0.41
KNK Kankakee Bancorp of IL 9.80 9.09 0.50 4.56 5.97 0.49 4.48 0.59 110.93 1.02
KYF Kentucky First Bancorp of KY 23.62 23.62 1.12 5.40 4.26 1.12 5.40 0.15 299.19 0.87
NYB New York Bancorp, Inc. of NY 5.78 5.78 1.18 19.84 10.77 1.12 18.82 1.63 45.81 1.22
PDB Piedmont Bancorp of NC 29.77 29.77 1.34 6.02 4.38 1.36 6.12 0.72 65.30 0.66
PLE Pinnacle Bank of AL 8.19 7.90 0.79 10.40 10.61 0.71 9.31 0.22 303.63 1.04
SSB Scotland Bancorp of NC 37.58 37.58 1.09 3.96 3.07 1.09 3.96 NA NA 0.52
SZB SouthFirst Bancshares of AL 14.89 14.89 0.55 3.25 4.49 0.76 4.49 0.56 52.60 0.45
SRN Southern Banc Company of AL 20.38 20.15 0.50 4.33 2.72 0.50 4.33 NA NA 0.25
SSM Stone Street Bancorp of NC 33.68 33.68 0.77 3.04 2.55 0.77 3.04 0.31 126.92 0.60
TSH Teche Holding Company of LA 17.16 17.16 1.17 7.06 6.94 1.14 6.91 0.24 362.84 1.10
FTF Texarkana Fst. Fin. Corp of AR 20.62 20.62 1.86 11.49 8.97 1.39 8.62 0.36 196.08 0.89
THR Three Rivers Fin. Corp. of MI 15.74 15.64 0.59 6.68 3.81 0.57 6.41 0.73 70.06 0.77
TBK Tolland Bank of CT* 6.25 5.96 0.61 9.90 11.49 0.44 7.25 4.14 27.24 1.62
WSB Washington SB, FSB of MD 8.08 8.08 0.94 12.56 10.36 0.69 9.25 NA NA 0.95
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 7.88 7.88 2.25 35.91 36.85 -0.16 -2.60 0.38 86.69 0.46
WFSB 1st Washington Bancorp of VA(8) 5.95 5.95 0.64 11.09 6.42 0.26 4.57 0.87 86.57 1.70
ALBK ALBANK Fin. Corp. of Albany NY 9.62 8.49 0.99 9.39 8.11 0.99 9.39 1.03 70.00 1.09
AMFC AMB Financial Corp. of IN 20.06 20.06 0.49 4.30 3.06 0.49 4.30 0.71 63.16 0.66
ASBP ASB Financial Corp. of OH 23.07 23.07 1.03 4.75 4.27 1.03 4.75 1.48 53.58 1.30
ABBK Abington Savings Bank of MA(8)* 6.50 5.69 0.36 5.29 5.53 0.24 3.48 0.37 88.30 0.58
AADV Advantage Bancorp of WI 9.77 8.47 0.90 9.33 7.38 0.81 8.40 0.56 100.02 1.04
AFCB Affiliated Comm BC, Inc of MA 10.25 10.17 0.71 6.31 7.22 0.86 7.56 1.34 57.09 1.28
ALBC Albion Banc Corp. of Albion NY 10.71 10.71 0.30 2.87 4.00 0.25 2.43 0.72 61.31 0.55
ATSB AmTrust Capital Corp. of IN 10.34 10.23 0.31 2.75 3.75 0.07 0.59 1.31 38.02 0.73
AHCI Ambanc Holding Co. of NY* 19.17 19.17 -0.03 -0.23 -0.21 -0.04 -0.35 4.22 24.58 1.64
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 7.29 130.49 6.02 139.23 NM 0.88 3.31 24.11
CAL CalFed Inc. of Los Angeles CA 10.93 140.44 6.34 140.44 11.63 0.00 0.00 0.00
CSA Coast Savings Financial of CA 15.61 142.51 7.36 144.91 18.02 0.00 0.00 0.00
CFB Commercial Federal Corp. of NE 11.13 145.35 8.79 161.79 11.19 0.40 1.04 11.53
DME Dime Savings Bank, FSB of NY* 19.29 131.46 6.68 132.93 14.11 0.00 0.00 0.00
DSL Downey Financial Corp. of CA 12.35 90.89 7.57 92.51 14.12 0.48 2.31 28.57
FRC First Republic Bancorp of CA* NM 93.94 5.31 94.06 NM 0.00 0.00 0.00
FED FirstFed Fin. Corp. of CA 24.65 95.21 4.46 96.85 22.15 0.00 0.00 0.00
GLN Glendale Fed. Bk, FSB of CA NM 105.77 5.68 114.76 18.69 0.00 0.00 0.00
GDW Golden West Fin. Corp. of CA 12.33 136.97 9.12 145.61 12.47 0.38 0.70 8.60
GWF Great Western Fin. Corp. of CA 12.37 128.94 7.45 147.24 13.57 1.00 4.21 52.08
GPT GreenPoint Fin. Corp. of NY(8)* 14.47 100.65 10.65 176.71 13.85 0.80 2.72 39.41
SFB Standard Fed. Bancorp of MI 9.72 126.98 8.83 148.85 10.77 0.76 1.99 19.39
TCB TCF Financial Corp. of MN 11.91 219.34 16.86 229.36 12.59 0.75 2.26 26.98
WES Westcorp Inc. of Orange CA 12.85 154.92 15.33 155.45 NM 0.38 2.08 26.76
AMEX Traded Companies
- ---------------------
BKC American Bank of Waterbury CT* 12.13 126.48 10.84 133.37 NM 1.36 5.55 67.33
BFD BostonFed Bancorp of MA NM 88.13 11.91 88.13 NM 0.20 1.63 NM
CFX Cheshire Fin. Corp. of NH* 12.50 119.85 11.34 134.30 15.13 0.72 5.01 62.61
CZF Citisave Fin. Corp. of LA 13.97 94.87 17.25 94.94 20.36 0.30 2.11 29.41
CBK Citizens First Fin.Corp. of IL 17.63 70.75 11.02 70.75 16.18 0.00 0.00 0.00
ESX Essex Bancorp of VA(8) 2.32 29.15 0.75 NM NM 0.00 0.00 0.00
FCB Falmouth Co-Op Bank of MA* NM 69.07 16.96 69.07 NM 0.00 0.00 0.00
GAF GA Financial Corp. of PA NM 76.71 17.21 76.71 25.00 0.00 0.00 0.00
KNK Kankakee Bancorp of IL 16.74 77.84 7.63 83.91 17.04 0.40 2.08 34.78
KYF Kentucky First Bancorp of KY 23.46 93.63 22.11 93.63 23.46 0.50 3.74 NM
NYB New York Bancorp, Inc. of NY 9.28 185.94 10.75 185.94 9.79 0.80 3.17 29.41
PDB Piedmont Bancorp of NC 22.84 94.31 28.07 94.31 22.46 0.48 3.62 NM
PLE Pinnacle Bank of AL 9.43 94.27 7.72 97.70 10.54 0.72 4.47 42.11
SSB Scotland Bancorp of NC NM 86.02 32.32 86.02 NM 0.00 0.00 0.00
SZB SouthFirst Bancshares of AL 22.27 79.13 11.78 79.13 16.12 0.50 4.08 NM
SRN Southern Banc Company of AL NM 85.43 17.41 86.38 NM 0.35 2.64 NM
SSM Stone Street Bancorp of NC NM 78.72 26.52 78.72 NM 0.44 2.61 NM
TSH Teche Holding Company of LA 14.40 91.32 15.67 91.32 14.72 0.50 3.77 54.35
FTF Texarkana Fst. Fin. Corp of AR 11.15 97.17 20.04 97.17 14.86 0.45 2.73 30.41
THR Three Rivers Fin. Corp. of MI NM 89.73 14.12 90.28 NM 0.30 2.24 58.82
TBK Tolland Bank of CT* 8.71 83.05 5.19 87.13 11.89 0.00 0.00 0.00
WSB Washington SB, FSB of MD 9.65 109.34 8.84 109.34 13.10 0.10 1.82 17.54
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 2.71 82.34 6.49 82.34 NM 0.40 1.50 4.08
WFSB 1st Washington Bancorp of VA(8) 15.57 165.76 9.87 165.76 NM 0.12 1.51 23.53
ALBK ALBANK Fin. Corp. of Albany NY 12.33 115.56 11.12 130.95 12.33 0.48 1.76 21.72
AMFC AMB Financial Corp. of IN NM 70.42 14.12 70.42 NM 0.00 0.00 0.00
ASBP ASB Financial Corp. of OH 23.44 99.73 23.01 99.73 23.44 0.30 2.00 46.88
ABBK Abington Savings Bank of MA(8)* 18.08 93.04 6.05 106.37 NM 0.40 2.60 47.06
AADV Advantage Bancorp of WI 13.55 122.43 11.97 141.31 15.04 0.32 0.94 12.75
AFCB Affiliated Comm BC, Inc of MA 13.84 88.30 9.05 89.00 11.55 0.48 2.87 39.67
ALBC Albion Banc Corp. of Albion NY 25.00 70.94 7.60 70.94 NM 0.31 1.88 46.97
ATSB AmTrust Capital Corp. of IN NM 74.10 7.66 74.89 NM 0.00 0.00 0.00
AHCI Ambanc Holding Co. of NY* NM 68.93 13.21 68.93 NM 0.00 0.00 NM
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ASBI Ameriana Bancorp of IN 11.64 11.62 0.93 7.22 7.69 0.90 7.00 0.56 50.63 0.40
AFFFZ America First Fin. Fund of CA 6.80 6.64 0.81 12.56 11.85 0.81 12.48 0.65 46.82 0.50
AMFB American Federal Bank of SC 8.21 7.58 1.29 16.11 9.84 1.41 17.57 0.50 151.69 1.27
ANBK American Nat'l Bancorp of MD 10.91 10.91 0.34 3.61 3.75 0.33 3.51 1.40 69.89 1.61
ABCW Anchor Bancorp Wisconsin of WI 6.75 6.57 0.87 12.13 8.65 0.85 11.80 0.61 214.80 1.63
ANDB Andover Bancorp, Inc. of MA* 7.60 7.60 0.87 11.60 9.28 0.91 12.17 1.60 63.49 1.46
ASFC Astoria Financial Corp. of NY 8.55 6.95 0.75 8.45 8.07 0.74 8.37 0.85 23.49 0.62
AVND Avondale Fin. Corp. of IL 10.63 10.63 0.65 6.66 7.15 0.45 4.65 0.85 82.48 1.72
BFSI BFS Bankorp, Inc. of NY 8.14 8.14 1.84 24.85 16.10 1.78 24.01 1.48 69.83 1.13
BKCT Bancorp Connecticut of CT* 10.81 10.81 1.18 10.65 7.95 1.18 10.65 1.69 74.29 2.13
BWFC Bank West Fin. Corp. of MI 19.78 19.78 0.69 3.38 3.81 0.41 1.98 0.08 112.71 0.13
BANC BankAtlantic Bancorp of FL 8.33 7.65 0.97 14.59 10.67 0.76 11.35 1.25 91.39 2.12
BKUNA BankUnited SA of FL 6.11 5.77 1.02 26.11 14.93 0.78 20.05 0.90 32.13 0.38
BKCO Bankers Corp. of NJ* 9.81 9.60 1.12 11.36 9.39 1.18 11.99 1.59 24.80 0.56
BVFS Bay View Capital Corp. of CA 6.98 6.81 -0.10 -1.46 -1.37 0.76 3.66 1.23 76.86 1.33
BFSB Bedford Bancshares of VA 16.11 16.11 1.26 7.57 7.22 1.26 7.57 1.24 43.93 0.64
BTHL Bethel Bancorp. of ME* 7.56 6.36 0.61 8.16 8.31 0.47 6.27 NA NA 1.48
SBOS Boston Bancorp of MA(8)* 12.34 12.34 1.91 21.36 16.91 0.91 10.23 0.65 18.09 0.61
BSBC Branford SB of CT* 8.69 8.69 0.76 9.05 6.15 0.76 9.05 2.31 87.06 2.77
BRFC Bridgeville SB, FSB of PA 28.51 28.51 1.24 4.21 4.29 1.24 4.21 0.25 102.85 0.70
BYFC Broadway Fin. Corp. of CA 11.42 11.42 0.40 6.29 4.90 0.45 7.06 2.40 34.37 1.05
CBCO CB Bancorp of Michigan City IN 9.16 9.16 1.36 13.92 12.00 1.36 13.92 0.84 77.80 1.45
CCFH CCF Holding Company of GA 21.23 21.23 0.86 5.17 4.92 0.82 4.91 0.63 84.80 0.90
CENF CENFED Financial Corp. of CA 5.00 4.99 0.48 9.87 9.16 0.33 6.81 1.22 54.40 0.89
CFSB CFSB Bancorp of Lansing MI 8.29 8.29 0.94 11.62 7.44 0.92 11.40 0.09 662.31 0.69
CKFB CKF Bancorp of Danville KY 27.30 27.30 1.24 4.40 3.85 1.24 4.40 1.70 10.61 0.21
CSBF CSB Financial Group Inc of IL 30.89 30.89 0.82 3.62 3.51 0.82 3.62 0.78 37.38 0.55
CFHC California Fin. Hld. Co. of CA 6.75 6.69 0.28 4.24 3.69 0.24 3.69 1.39 46.09 0.87
CBCI Calumet Bancorp of Chicago IL 16.99 16.99 1.21 7.25 8.00 1.20 7.22 1.23 82.56 1.36
CAFI Camco Fin. Corp. of OH 8.33 8.33 1.22 15.53 10.81 0.93 11.87 0.56 54.79 0.36
CMRN Cameron Fin. Corp. of MO 26.54 26.54 1.61 5.79 7.19 1.59 5.73 0.79 86.49 0.81
CAPS Capital Savings Bancorp of MO 10.43 10.43 0.95 8.92 9.72 0.95 8.92 0.20 152.91 0.38
CARV Carver FSB of New York, NY 9.63 9.16 0.20 2.06 3.94 0.25 2.66 1.13 27.64 1.88
CASB Cascade SB of Everett WA 6.22 6.22 0.56 8.94 5.21 0.29 4.68 2.40 37.69 1.26
CATB Catskill Fin. Corp. of NY* 27.79 27.79 0.96 3.44 4.61 1.10 3.96 NA NA 1.63
CNIT Cenit Bancorp of Norfolk VA 6.98 6.72 0.42 5.90 4.49 0.49 6.92 0.51 109.75 1.17
CTBK Center Banks, Inc. of NY* 7.08 7.08 0.56 8.10 9.24 0.58 8.35 1.07 115.49 1.55
CFCX Center Fin. Corp of CT(8)* 6.10 5.70 0.70 11.37 7.00 0.47 7.75 2.61 44.33 1.46
CEBK Central Co-Op. Bank of MA* 9.95 8.69 0.60 6.40 6.39 0.57 6.01 2.31 41.68 1.39
CJFC Central Jersey Fin. Corp of NJ(8) 11.78 10.95 1.11 10.71 6.15 1.06 10.20 1.91 33.63 1.30
CBSB Charter Financial Inc. of IL 21.41 20.85 1.12 6.95 5.65 1.12 6.95 0.49 149.63 1.05
COFI Charter One Financial of OH(8) 6.90 6.79 0.18 2.81 1.05 1.18 18.12 0.42 117.80 0.92
CVAL Chester Valley Bancorp of PA 9.15 9.15 0.91 10.02 8.44 0.87 9.63 1.03 92.67 1.20
CRCL Circle Financial Corp.of OH(8) 10.65 9.24 0.50 4.34 4.32 0.43 3.72 0.10 213.87 0.35
CTZN CitFed Bancorp of Dayton OH 6.70 5.81 0.68 9.99 7.66 0.55 8.16 0.85 74.34 1.06
CLAS Classic Bancshares of KY 28.78 28.78 0.44 2.82 1.91 0.40 2.55 0.51 77.33 0.62
CMSB Cmnwealth SB, MHC of PA (46.3)(8) 8.30 7.30 0.78 8.32 5.91 0.69 7.40 0.44 103.05 0.85
CBSA Coastal Bancorp of Houston TX 3.31 2.69 0.37 10.64 10.40 0.37 10.58 0.67 32.48 0.54
CFCP Coastal Fin. Corp. of SC 6.08 6.08 0.99 16.43 7.48 0.89 14.80 0.42 209.91 1.02
COFD Collective Bancorp Inc. of NJ 7.05 6.54 1.06 15.87 10.80 1.04 15.51 0.57 45.24 0.53
CMSV Commty. Svgs, MHC of FL(47.6) 11.82 11.82 0.83 6.60 6.49 0.81 6.40 1.24 44.70 1.02
CBIN Community Bank Shares of IN 11.36 11.36 0.90 8.26 7.05 0.88 8.09 0.12 219.42 0.50
CBNH Community Bankshares Inc of NH* 7.23 7.23 0.78 10.93 7.94 0.65 9.07 0.46 159.64 1.09
CFTP Community Fed. Bancorp of MS 33.10 33.10 1.17 6.28 3.16 1.14 6.13 0.34 84.38 0.53
CFFC Community Fin. Corp. of VA 13.70 13.70 1.29 9.70 7.90 1.29 9.70 0.45 139.66 0.70
CIBI Community Fin. Corp. of OH 14.36 14.36 1.00 7.71 7.87 0.95 7.33 0.73 69.05 0.68
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
ASBI Ameriana Bancorp of IN 13.00 96.94 11.28 97.09 13.40 0.56 4.31 56.00
AFFFZ America First Fin. Fund of CA 8.44 102.23 6.96 104.69 8.49 1.60 5.93 50.00
AMFB American Federal Bank of SC 10.16 156.41 12.84 169.54 9.32 0.40 2.54 25.81
ANBK American Nat'l Bancorp of MD NM 80.18 8.75 80.18 NM 0.00 0.00 0.00
ABCW Anchor Bancorp Wisconsin of WI 11.56 141.67 9.56 145.49 11.89 0.40 1.18 13.61
ANDB Andover Bancorp, Inc. of MA* 10.78 118.64 9.01 118.64 10.28 0.60 2.47 26.67
ASFC Astoria Financial Corp. of NY 12.38 104.63 8.94 128.62 12.50 0.44 1.61 19.91
AVND Avondale Fin. Corp. of IL 13.98 84.69 9.00 84.69 20.00 0.00 0.00 0.00
BFSI BFS Bankorp, Inc. of NY 6.21 136.52 11.11 136.52 6.43 0.00 0.00 0.00
BKCT Bancorp Connecticut of CT* 12.58 128.96 13.94 128.96 12.58 0.72 3.47 43.64
BWFC Bank West Fin. Corp. of MI NM 89.66 17.73 89.66 NM 0.28 2.60 68.29
BANC BankAtlantic Bancorp of FL 9.38 115.88 9.65 126.17 12.05 0.18 1.33 12.50
BKUNA BankUnited SA of FL 6.70 94.58 5.78 100.13 8.72 0.00 0.00 0.00
BKCO Bankers Corp. of NJ* 10.65 117.43 11.52 119.96 10.09 0.56 3.25 34.57
BVFS Bay View Capital Corp. of CA NM 113.71 7.94 116.64 NM 0.60 1.79 NM
BFSB Bedford Bancshares of VA 13.85 104.86 16.89 104.86 13.85 0.36 2.17 30.00
BTHL Bethel Bancorp. of ME* 12.04 94.75 7.17 112.75 15.66 0.32 2.46 29.63
SBOS Boston Bancorp of MA(8)* 5.91 103.92 12.82 103.92 12.35 0.76 1.82 10.73
BSBC Branford SB of CT* 16.25 140.69 12.22 140.69 16.25 0.00 0.00 0.00
BRFC Bridgeville SB, FSB of PA 23.31 97.31 27.74 97.31 23.31 0.32 2.33 54.24
BYFC Broadway Fin. Corp. of CA 20.41 67.89 7.75 67.89 18.18 0.20 2.00 40.82
CBCO CB Bancorp of Michigan City IN 8.33 109.25 10.01 109.25 8.33 0.00 0.00 0.00
CCFH CCF Holding Company of GA 20.34 81.14 17.23 81.14 21.43 0.40 3.33 67.80
CENF CENFED Financial Corp. of CA 10.91 102.28 5.12 102.48 15.81 0.33 1.53 16.75
CFSB CFSB Bancorp of Lansing MI 13.45 148.60 12.33 148.60 13.71 0.44 2.07 27.85
CKFB CKF Bancorp of Danville KY NM 113.31 30.93 113.31 NM 0.40 2.05 53.33
CSBF CSB Financial Group Inc of IL NM 74.15 22.90 74.15 NM 0.00 0.00 0.00
CFHC California Fin. Hld. Co. of CA NM 112.93 7.63 113.92 NM 0.44 2.11 57.14
CBCI Calumet Bancorp of Chicago IL 12.50 89.09 15.13 89.09 12.56 0.00 0.00 0.00
CAFI Camco Fin. Corp. of OH 9.25 135.12 11.25 135.12 12.11 0.46 2.34 21.70
CMRN Cameron Fin. Corp. of MO 13.92 84.06 22.31 84.06 14.06 0.28 2.07 28.87
CAPS Capital Savings Bancorp of MO 10.29 88.50 9.23 88.50 10.29 0.36 2.00 20.57
CARV Carver FSB of New York, NY NM 52.05 5.01 54.73 19.68 0.00 0.00 0.00
CASB Cascade SB of Everett WA 19.19 166.00 10.32 166.00 NM 0.00 0.00 0.00
CATB Catskill Fin. Corp. of NY* 21.68 74.65 20.75 74.65 18.87 0.00 0.00 0.00
CNIT Cenit Bancorp of Norfolk VA 22.29 120.69 8.42 125.36 19.02 0.80 2.29 50.96
CTBK Center Banks, Inc. of NY* 10.83 84.25 5.96 84.25 10.50 0.24 1.75 18.90
CFCX Center Fin. Corp of CT(8)* 14.29 147.93 9.03 158.38 20.98 0.28 1.22 17.50
CEBK Central Co-Op. Bank of MA* 15.66 94.63 9.42 108.39 16.67 0.00 0.00 0.00
CJFC Central Jersey Fin. Corp of NJ(8) 16.27 149.42 17.60 160.74 17.08 1.12 3.64 59.26
CBSB Charter Financial Inc. of IL 17.69 88.80 19.01 91.20 17.69 0.24 2.09 36.92
COFI Charter One Financial of OH(8) NM 174.55 12.05 177.37 14.72 0.92 2.61 NM
CVAL Chester Valley Bancorp of PA 11.85 114.78 10.50 114.78 12.33 0.40 2.19 25.97
CRCL Circle Financial Corp.of OH(8) 23.13 98.52 10.49 113.56 NM 0.68 2.00 46.26
CTZN CitFed Bancorp of Dayton OH 13.05 121.03 8.11 139.64 15.97 0.28 0.76 9.86
CLAS Classic Bancshares of KY NM 74.53 21.45 74.53 NM 0.00 0.00 0.00
CMSB Cmnwealth SB, MHC of PA (46.3)(8) 16.93 134.97 11.21 153.57 19.03 0.50 2.33 39.37
CBSA Coastal Bancorp of Houston TX 9.62 98.93 3.28 121.94 9.67 0.40 2.16 20.73
CFCP Coastal Fin. Corp. of SC 13.37 206.23 12.55 206.23 14.85 0.50 2.48 33.11
COFD Collective Bancorp Inc. of NJ 9.26 138.81 9.78 149.51 9.47 0.80 3.30 30.53
CMSV Commty. Svgs, MHC of FL(47.6) 15.40 99.35 11.74 99.35 15.89 0.70 4.59 70.71
CBIN Community Bank Shares of IN 14.19 106.07 12.05 106.07 14.49 0.34 2.50 35.42
CBNH Community Bankshares Inc of NH* 12.59 114.81 8.30 114.81 15.17 0.60 3.38 42.55
CFTP Community Fed. Bancorp of MS NM 94.98 31.44 94.98 NM 0.00 0.00 0.00
CFFC Community Fin. Corp. of VA 12.66 116.01 15.90 116.01 12.66 0.52 2.60 32.91
CIBI Community Fin. Corp. of OH 12.71 87.39 12.55 87.39 13.38 0.16 1.05 13.31
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CONE Conestoga Bancorp of Roslyn NY(8) 16.17 16.17 0.67 4.11 3.24 0.54 3.33 0.16 26.87 0.18
COOP Cooperative Bk.for Svgs. of NC 9.34 8.21 0.28 3.11 3.48 0.24 2.64 0.22 95.46 0.28
CNSK Covenant Bank for Svgs. of NJ* 5.05 5.05 0.62 11.55 8.08 0.62 11.55 2.04 38.62 1.43
CRZY Crazy Woman Creek Bncorp of WY 32.70 32.70 0.92 4.63 3.32 0.78 3.95 0.70 85.20 1.14
DNFC D&N Financial Corp. of MI 5.63 5.54 1.05 19.69 13.39 0.93 17.40 0.59 138.44 0.98
DSBC DS Bancor Inc. of Derby CT* 6.55 6.33 0.66 10.49 8.61 0.59 9.40 1.82 31.42 0.79
DFIN Damen Fin. Corp. of Chicago IL 24.17 24.17 0.81 5.02 3.83 0.79 4.91 0.14 92.58 0.35
DIBK Dime Financial Corp. of CT* 7.95 7.56 1.50 19.84 13.54 1.69 22.30 0.99 199.52 2.98
EBSI Eagle Bancshares of Tucker GA 6.65 6.65 0.97 13.73 9.56 0.94 13.29 0.49 138.35 0.98
EGFC Eagle Financial Corp. of CT 7.14 5.16 1.30 17.60 15.41 0.63 8.61 1.23 55.16 1.20
ETFS East Texas Fin. Serv. of TX 19.63 19.63 0.89 4.59 5.90 0.83 4.27 0.45 55.47 0.65
EBCP Eastern Bancorp of NH 7.70 7.25 0.60 8.23 8.75 0.50 6.82 1.81 23.60 0.74
ESBK Elmira SB of Elmira NY* 6.30 6.01 0.14 2.29 2.75 0.14 2.29 0.80 89.84 1.00
EFBI Enterprise Fed. Bancorp of OH 15.58 15.55 1.12 5.47 6.95 0.77 3.75 0.01 NA 0.27
EQSB Equitable FSB of Wheaton MD 5.25 5.25 0.84 16.16 14.10 0.83 16.02 0.98 22.55 0.33
FFFG F.F.O. Financial Group of FL 6.01 6.01 0.46 6.98 5.34 0.46 6.98 3.77 45.17 2.74
FCBF FCB Fin. Corp. of Neenah WI 18.46 18.46 1.03 5.31 5.59 1.01 5.21 NA NA 0.51
FFBS FFBS Bancorp of Columbus MS 19.57 19.57 1.31 6.46 4.40 1.31 6.46 0.70 76.75 0.79
FFDF FFD Financial Corp. of OH 28.03 28.03 1.04 3.69 5.10 1.04 3.69 NA NA 0.32
FFLC FFLC Bancorp of Leesburg FL 16.97 16.97 0.94 5.42 6.16 0.94 5.47 0.08 365.93 0.51
FFFC FFVA Financial Corp. of VA 16.32 15.99 1.30 7.25 6.80 1.27 7.06 0.48 132.38 1.09
FFWC FFW Corporation of Wabash IN 10.80 10.80 0.90 8.12 9.04 1.01 9.05 0.06 620.00 0.52
FFYF FFY Financial Corp. of OH 18.35 18.35 1.21 6.53 5.76 1.25 6.73 0.88 66.89 0.78
FMCO FMS Financial Corp. of NJ 6.58 6.40 0.84 13.04 9.66 0.84 13.04 1.11 49.19 0.95
FFHH FSF Financial Corp. of MN 15.97 15.97 0.62 3.34 3.96 0.62 3.34 0.09 250.67 0.39
FMLY Family Bancorp of Haverhill MA(8)* 7.76 7.10 0.96 12.66 8.29 0.86 11.34 1.19 61.53 1.42
FMCT Farmers & Mechanics Bank of CT(8)* 5.55 5.55 0.06 1.13 0.66 -0.02 -0.39 2.52 33.97 1.43
FOBC Fed One Bancorp of Wheeling WV 12.12 11.47 1.00 7.73 8.96 1.00 7.73 0.28 152.99 1.16
FFRV Fid. Fin. Bkshrs. Corp. of VA 8.51 8.50 0.99 11.83 10.80 0.97 11.66 1.16 84.92 1.20
FBCI Fidelity Bancorp of Chicago IL 12.05 12.00 0.77 5.66 5.90 0.73 5.31 0.53 20.66 0.16
FSBI Fidelity Bancorp, Inc. of PA 7.28 7.22 0.60 7.78 7.81 0.59 7.65 0.81 55.09 1.02
FFFL Fidelity FSB, MHC of FL(47.2) 10.23 10.12 0.64 6.24 5.51 0.60 5.81 0.38 78.38 0.41
FFED Fidelity Fed. Bancorp of IN 5.07 5.07 1.30 26.09 12.27 1.22 24.57 0.07 428.14 0.35
FFOH Fidelity Financial of OH 20.37 20.37 0.82 5.54 4.63 0.82 5.54 0.40 80.88 0.43
FIBC Financial Bancorp of NY 10.66 10.60 0.65 5.40 6.40 0.64 5.33 2.80 19.48 1.07
FNSC Financial Security Corp. of IL(8) 14.36 14.36 0.77 5.66 5.56 0.71 5.26 2.77 31.27 1.24
FSBS First Ashland Fin. Corp. of KY(8) 26.33 26.33 0.87 4.09 2.83 0.87 4.09 NA NA 0.17
FBSI First Bancshares of MO 16.92 16.89 0.78 4.33 5.16 0.77 4.27 0.43 83.74 0.44
FBBC First Bell Bancorp of PA 21.05 21.05 1.55 7.69 6.87 1.53 7.61 0.11 97.74 0.14
FBER First Bergen Bancorp of NJ 16.52 16.52 0.28 3.06 2.15 0.42 4.59 2.49 59.97 3.49
FCIT First Cit. Fin. Corp of MD 6.28 6.28 0.71 11.35 8.17 0.58 9.23 3.43 33.61 1.63
FFBA First Colorado Bancorp of Co 16.19 16.00 0.98 8.50 5.23 0.98 8.50 0.25 84.38 0.33
FDEF First Defiance Fin.Corp. of OH 25.39 25.39 1.15 5.36 4.93 1.13 5.26 NA NA 0.48
FESX First Essex Bancorp of MA* 7.67 7.67 0.94 13.05 11.91 0.79 11.01 0.77 108.82 1.32
FFES First FS&LA of E. Hartford CT 6.19 6.17 0.60 8.87 11.65 0.59 8.78 0.83 40.36 1.94
FSSB First FS&LA of San Bern. CA 5.64 5.39 -0.17 -2.90 -5.20 -0.35 -6.09 4.86 16.11 1.21
FFSX First FS&LA. MHC of IA (45.0) 8.41 8.37 0.63 7.77 6.29 0.58 7.15 0.17 229.25 0.53
FFML First Family Bank, FSB of FL 5.61 5.61 0.82 16.10 11.14 0.48 9.50 0.42 105.69 0.61
FFSW First Fed Fin. Serv. of OH 5.32 4.84 0.85 15.68 8.49 0.69 12.62 0.15 196.94 0.47
BDJI First Fed. Bancorp. of MN 14.38 14.38 0.70 5.24 6.54 0.70 5.24 0.23 211.89 0.98
FFBH First Fed. Bancshares of AR 15.90 15.90 0.99 6.24 6.98 0.99 6.24 0.09 278.68 0.35
FFEC First Fed. Bancshares of WI 14.32 13.74 0.96 5.83 5.38 0.94 5.69 0.13 104.41 0.19
FTFC First Fed. Capital Corp. of WI 6.85 6.45 0.91 13.51 8.59 0.67 9.91 NA NA 0.84
FFFB First Fed. Fin. Bancorp of OH 18.05 18.05 0.67 3.69 5.40 0.67 3.69 0.09 617.39 0.86
FFKY First Fed. Fin. Corp. of KY 14.04 13.10 1.65 11.51 6.00 1.44 10.03 0.45 102.40 0.53
FFBZ First Federal Bancorp of OH 7.81 7.80 1.10 14.70 9.76 1.08 14.45 0.62 144.45 1.01
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
CONE Conestoga Bancorp of Roslyn NY(8) NM 124.56 20.14 124.56 NM 0.00 0.00 0.00
COOP Cooperative Bk.for Svgs. of NC NM 87.83 8.20 99.88 NM 0.00 0.00 0.00
CNSK Covenant Bank for Svgs. of NJ* 12.37 137.30 6.94 137.30 12.37 0.00 0.00 0.00
CRZY Crazy Woman Creek Bncorp of WY NM 69.87 22.85 69.87 NM 0.00 0.00 0.00
DNFC D&N Financial Corp. of MI 7.47 132.28 7.45 134.40 8.45 0.00 0.00 0.00
DSBC DS Bancor Inc. of Derby CT* 11.62 115.78 7.59 119.92 12.97 0.24 0.77 8.92
DFIN Damen Fin. Corp. of Chicago IL NM 80.20 19.39 80.20 NM 0.24 2.09 54.55
DIBK Dime Financial Corp. of CT* 7.38 134.05 10.66 141.09 6.57 0.28 1.96 14.51
EBSI Eagle Bancshares of Tucker GA 10.46 134.34 8.93 134.34 10.81 0.52 3.25 33.99
EGFC Eagle Financial Corp. of CT 6.49 104.63 7.47 144.64 13.27 0.92 3.87 25.14
ETFS East Texas Fin. Serv. of TX 16.95 78.04 15.32 78.04 18.21 0.20 1.36 22.99
EBCP Eastern Bancorp of NH 11.43 90.63 6.98 96.27 13.79 0.72 3.00 34.29
ESBK Elmira SB of Elmira NY* NM 84.21 5.30 88.16 NM 0.64 3.82 NM
EFBI Enterprise Fed. Bancorp of OH 14.39 91.82 14.31 91.99 20.96 0.00 0.00 0.00
EQSB Equitable FSB of Wheaton MD 7.09 106.59 5.59 106.59 7.15 0.00 0.00 0.00
FFFG F.F.O. Financial Group of FL 18.73 128.90 7.75 128.90 18.73 0.00 0.00 0.00
FCBF FCB Fin. Corp. of Neenah WI 17.89 97.18 17.94 97.18 18.25 0.72 3.95 70.59
FFBS FFBS Bancorp of Columbus MS 22.75 148.02 28.96 148.02 22.75 0.50 2.20 50.00
FFDF FFD Financial Corp. of OH 19.60 72.37 20.28 72.37 19.60 0.00 0.00 0.00
FFLC FFLC Bancorp of Leesburg FL 16.23 87.02 14.77 87.02 16.09 0.40 2.16 35.09
FFFC FFVA Financial Corp. of VA 14.71 112.40 18.34 114.68 15.09 0.40 2.29 33.61
FFWC FFW Corporation of Wabash IN 11.06 88.47 9.55 88.47 9.92 0.60 3.12 34.48
FFYF FFY Financial Corp. of OH 17.35 114.81 21.07 114.81 16.85 0.60 2.58 44.78
FMCO FMS Financial Corp. of NJ 10.36 129.73 8.54 133.38 10.36 0.20 1.14 11.83
FFHH FSF Financial Corp. of MN NM 89.71 14.32 89.71 NM 0.50 4.13 NM
FMLY Family Bancorp of Haverhill MA(8)* 12.06 144.00 11.17 157.37 13.47 0.48 1.98 23.88
FMCT Farmers & Mechanics Bank of CT(8)* NM 168.52 9.36 168.52 NM 0.00 0.00 0.00
FOBC Fed One Bancorp of Wheeling WV 11.16 88.45 10.72 93.42 11.16 0.54 3.69 41.22
FFRV Fid. Fin. Bkshrs. Corp. of VA 9.26 104.08 8.86 104.17 9.40 0.20 1.60 14.81
FBCI Fidelity Bancorp of Chicago IL 16.96 98.29 11.84 98.64 18.07 0.24 1.44 24.49
FSBI Fidelity Bancorp, Inc. of PA 12.80 99.63 7.26 100.44 13.01 0.29 1.81 23.20
FFFL Fidelity FSB, MHC of FL(47.2) 18.15 109.87 11.24 111.16 19.49 0.60 4.53 NM
FFED Fidelity Fed. Bancorp of IN 8.15 197.37 10.01 197.37 8.65 0.80 7.11 57.97
FFOH Fidelity Financial of OH 21.61 79.71 16.24 79.71 21.61 0.20 2.01 43.48
FIBC Financial Bancorp of NY 15.63 87.23 9.30 87.72 15.82 0.30 2.40 37.50
FNSC Financial Security Corp. of IL(8) 17.99 98.22 14.11 98.22 19.37 0.00 0.00 0.00
FSBS First Ashland Fin. Corp. of KY(8) NM 110.84 29.19 110.84 NM 0.00 0.00 0.00
FBSI First Bancshares of MO 19.38 84.88 14.37 85.07 19.62 0.20 1.29 25.00
FBBC First Bell Bancorp of PA 14.56 97.86 20.60 97.86 14.72 0.20 1.46 21.28
FBER First Bergen Bancorp of NJ NM 69.17 11.43 69.17 NM 0.00 0.00 0.00
FCIT First Cit. Fin. Corp of MD 12.24 131.97 8.29 131.97 15.04 0.00 0.00 0.00
FFBA First Colorado Bancorp of Co 19.12 110.84 17.94 112.16 19.12 0.30 2.27 43.48
FDEF First Defiance Fin.Corp. of OH 20.28 87.97 22.34 87.97 20.67 0.28 2.60 52.83
FESX First Essex Bancorp of MA* 8.40 105.60 8.09 105.60 9.95 0.48 4.47 37.50
FFES First FS&LA of E. Hartford CT 8.59 76.27 4.72 76.51 8.67 0.60 3.53 30.30
FSSB First FS&LA of San Bern. CA NM 56.27 3.18 58.93 NM 0.00 0.00 NM
FFSX First FS&LA. MHC of IA (45.0) 15.90 119.60 10.06 120.21 17.28 0.72 2.80 44.44
FFML First Family Bank, FSB of FL 8.97 133.16 7.47 133.16 15.22 0.16 0.76 6.84
FFSW First Fed Fin. Serv. of OH 11.77 175.67 9.35 193.12 14.62 0.48 1.69 19.92
BDJI First Fed. Bancorp. of MN 15.29 73.65 10.59 73.65 15.29 0.00 0.00 0.00
FFBH First Fed. Bancshares of AR 14.32 89.40 14.22 89.40 14.32 0.00 0.00 0.00
FFEC First Fed. Bancshares of WI 18.60 108.62 15.55 113.21 19.06 0.28 1.84 34.15
FTFC First Fed. Capital Corp. of WI 11.64 145.58 9.97 154.63 15.86 0.64 2.93 34.04
FFFB First Fed. Fin. Bancorp of OH 18.53 68.34 12.34 68.34 18.53 0.00 0.00 0.00
FFKY First Fed. Fin. Corp. of KY 16.67 188.20 26.42 201.65 19.13 0.48 2.18 36.36
FFBZ First Federal Bancorp of OH 10.25 149.19 11.10 142.36 10.43 0.44 1.80 18.41
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------ ------ ------ ------ ------ ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFWM First Fin. Corp of Western MD 12.53 12.53 0.42 3.52 3.08 0.39 3.24 2.02 116.36 3.17
FFCH First Fin. Holdings Inc. of SC 6.61 6.61 0.75 11.29 8.64 0.77 11.50 1.36 55.75 0.93
FPRY First Financial Bancorp of FL(8) 6.35 6.35 0.57 8.93 6.92 0.43 6.68 NA NA 0.84
FFBI First Financial Bancorp of IL 8.87 8.87 0.69 6.63 7.00 0.72 6.93 0.40 98.60 0.55
FFHC First Financial Corp. of WI 7.33 6.96 1.28 18.96 10.46 1.24 18.40 0.52 85.22 0.67
FFHS First Franklin Corp. of OH 9.51 9.51 0.63 6.59 7.33 0.62 6.47 0.73 57.88 0.64
FGHC First Georgia Hold. Corp of GA 8.16 7.22 0.86 10.81 8.43 0.86 10.81 1.51 47.32 0.84
FSPG First Home SB, SLA of NJ 6.52 6.34 1.01 15.73 12.17 0.98 15.30 0.97 79.35 1.40
FFSL First Independence Corp. of KS 12.64 12.64 1.14 8.56 10.99 1.14 8.56 0.96 70.41 1.10
FISB First Indiana Corp. of IN 8.96 8.83 1.17 13.93 8.79 1.00 11.82 1.70 64.84 1.32
FKFS First Keystone Fin. Corp of PA 8.28 8.28 0.48 5.48 5.94 0.51 5.92 2.86 19.07 0.91
FLFC First Liberty Fin. Corp. of GA 6.83 5.74 0.96 14.60 9.89 0.76 11.54 0.88 92.83 1.12
CASH First Midwest Fin. Corp. of IA 12.55 11.70 1.22 9.29 8.30 0.97 7.38 0.39 148.22 0.81
FMBD First Mutual Bancorp of IL 25.26 25.26 0.98 4.24 4.69 0.95 4.10 0.09 471.37 0.52
FMSB First Mutual SB of Bellevue WA* 6.64 6.64 1.02 15.30 10.94 1.01 15.08 0.19 359.89 0.83
FNGB First Northern Cap. Corp of WI 12.73 12.73 0.84 6.54 6.44 0.72 5.58 0.13 358.40 0.52
FFPB First Palm Beach Bancorp of FL 7.64 7.44 0.68 8.13 7.77 0.67 8.08 0.81 48.51 0.55
FSNJ First SB of NJ, MHC (45.0) 8.13 8.13 0.04 0.52 0.56 0.37 4.27 0.98 41.68 1.18
FSBC First SB, FSB of Clovis NM 4.74 4.74 0.31 6.79 9.64 0.24 5.25 1.44 21.82 0.98
FSLA First SB, SLA MHC of NJ (37.6) 9.49 8.24 0.86 9.52 7.87 0.83 9.13 0.96 55.11 1.08
SOPN First SB, SSB, Moore Co. of NC 26.21 26.21 1.48 5.67 5.48 1.50 5.78 0.03 936.92 0.35
FWWB First Savings Bancorp of WA* 25.80 25.80 1.02 8.65 3.63 1.00 8.48 0.23 283.53 1.12
SHEN First Shenango Bancorp of PA 13.24 13.24 1.01 7.19 6.70 0.95 6.79 0.49 146.55 1.10
FSFC First So.east Fin. Corp. of SC 19.61 19.61 0.90 4.60 4.36 0.89 4.55 0.14 238.66 0.52
FSFI First State Fin. Serv. of NJ 6.84 6.49 0.63 9.28 9.26 0.49 7.25 4.97 21.02 1.28
FFDP FirstFed Bancshares of IL 9.02 8.61 0.63 6.51 6.88 0.39 4.08 0.14 145.75 0.38
FLAG Flag Financial Corp of GA 9.56 9.56 0.91 9.92 8.40 0.81 8.79 1.69 36.23 0.90
FFPC Florida First Bancorp of FL(8) 6.92 6.92 0.85 12.80 6.70 0.78 11.77 0.82 150.67 2.11
FFIC Flushing Fin. Corp. of NY* 18.72 18.72 0.58 4.55 3.02 0.56 4.36 0.90 80.61 1.78
FBHC Fort Bend Holding Corp. of TX 7.27 7.27 0.74 10.13 12.00 0.67 9.18 NA NA 1.42
FTSB Fort Thomas Fin. Corp. of KY 24.30 24.30 1.30 5.84 4.18 1.30 5.84 1.78 19.53 0.42
FKKY Frankfort First Bancorp of KY 34.52 34.52 1.36 4.94 4.47 1.08 3.91 0.10 66.67 0.09
GFSB GFS Bancorp of Grinnell IA 12.04 12.04 1.09 8.45 7.75 1.06 8.29 0.97 52.35 0.61
GUPB GFSB Bancorp of Gallup NM 23.03 23.03 1.24 5.07 5.63 1.24 5.07 NA NA 0.87
GWBC Gateway Bancorp of KY 25.00 25.00 1.05 3.92 4.76 1.05 3.92 0.19 57.04 0.46
GBCI Glacier Bancorp of MT 9.63 9.61 1.59 16.27 8.09 1.59 16.27 0.23 225.96 0.72
GLBK Glendale Co-op. Bank of MA* 16.31 16.31 0.78 4.96 6.85 0.65 4.17 NA NA 0.70
GFCO Glenway Financial Corp. of OH 9.41 9.16 0.56 5.87 6.77 0.54 5.62 NA NA 0.29
GTPS Great American Bancorp of IL 29.42 29.42 0.68 2.82 2.88 0.68 2.82 0.45 53.28 0.37
GTFN Great Financial Corp. of KY 11.35 11.17 1.00 8.15 5.77 0.81 6.62 4.16 11.85 0.67
GSBC Great Southern Bancorp of MO 10.12 9.95 1.72 17.10 9.02 1.62 16.07 2.03 106.34 2.54
GDVS Greater DV SB,MHC of PA(19.9)* 12.29 12.29 0.48 3.95 3.50 0.48 3.95 3.05 22.60 1.18
GRTR Greater New York SB of NY* 5.68 5.68 0.46 8.39 7.91 0.45 8.20 9.21 9.89 2.16
GSFC Green Street Fin. Corp. of NC 31.53 31.53 1.42 4.50 4.82 1.42 4.50 0.16 67.98 0.19
GROV GroveBank for Savings of MA* 6.24 6.23 0.81 13.33 11.67 0.77 12.57 0.80 70.34 0.78
GFED Guaranty FS&LA,MHC of MO(31.1) 14.64 14.64 1.02 7.29 4.99 0.55 3.89 0.07 NA 1.59
GSLC Guaranty Svgs & Loan FA of VA 6.19 6.19 0.68 11.24 8.36 0.42 6.90 3.14 23.56 0.94
HEMT HF Bancorp of Hemet CA 11.44 11.43 0.19 1.70 2.05 0.19 1.70 0.59 60.30 1.21
HFFC HF Financial Corp. of SD(8) 8.97 8.95 0.78 8.71 9.28 0.61 6.80 0.69 93.68 0.88
HFNC HFNC Financial Corp. of NC 34.11 34.11 0.80 3.76 1.94 0.95 4.46 1.62 64.19 1.59
HMNF HMN Financial, Inc. of MN 16.76 16.76 1.10 6.35 7.01 0.99 5.67 0.14 305.95 0.73
HALL Hallmark Capital Corp. of WI 7.82 7.82 0.57 6.40 7.60 0.51 5.73 0.09 390.48 0.60
HARB Harbor FSB, MHC of FL (45.7) 8.86 8.86 1.19 13.64 8.35 1.18 13.58 0.54 199.07 1.48
HRBF Harbor Federal Bancorp of MD 19.02 19.02 0.81 3.82 5.11 0.81 3.82 0.06 547.06 0.46
HFSA Hardin Bancorp of Hardin MO 19.24 19.24 0.64 4.18 4.09 0.64 4.18 0.11 140.43 0.29
HAAL Harleysville SA of PA 7.05 7.05 0.82 11.92 9.31 0.83 12.13 0.05 NA 0.75
<CAPTION>
Pricing Ratios Dividend Data(6)
---------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFWM First Fin. Corp of Western MD NM 110.96 13.91 110.96 NM 0.48 2.31 NM
FFCH First Fin. Holdings Inc. of SC 11.57 124.67 8.24 124.67 11.36 0.64 3.41 39.51
FPRY First Financial Bancorp of FL(8) 14.46 124.49 7.90 124.49 19.32 0.80 3.76 54.42
FFBI First Financial Bancorp of IL 14.29 96.04 8.52 96.04 13.68 0.00 0.00 0.00
FFHC First Financial Corp. of WI 9.56 168.20 12.34 177.12 9.85 0.60 2.68 25.64
FFHS First Franklin Corp. of OH 13.64 86.66 8.24 86.66 13.89 0.28 1.87 25.45
FGHC First Georgia Hold. Corp of GA 11.86 122.16 9.97 138.07 11.86 0.00 0.00 0.00
FSPG First Home SB, SLA of NJ 8.22 120.24 7.83 123.54 8.45 0.48 2.67 21.92
FFSL First Independence Corp. of KS 9.10 80.57 10.18 80.57 9.10 0.40 2.25 20.51
FISB First Indiana Corp. of IN 11.37 150.19 13.45 152.38 13.41 0.56 2.33 26.54
FKFS First Keystone Fin. Corp of PA 16.83 95.29 7.89 95.29 15.60 0.00 0.00 0.00
FLFC First Liberty Fin. Corp. of GA 10.12 129.16 8.82 153.82 12.79 0.52 2.39 24.19
CASH First Midwest Fin. Corp. of IA 12.05 108.20 13.58 116.05 15.16 0.44 1.87 22.56
FMBD First Mutual Bancorp of IL 21.31 78.50 19.83 78.50 22.03 0.28 2.15 45.90
FMSB First Mutual SB of Bellevue WA* 9.14 131.58 8.74 131.58 9.27 0.20 1.51 13.79
FNGB First Northern Cap. Corp of WI 15.53 100.13 12.74 100.13 18.18 0.60 3.75 58.25
FFPB First Palm Beach Bancorp of FL 12.87 100.69 7.69 103.42 12.95 0.40 1.84 23.67
FSNJ First SB of NJ, MHC (45.0) NM 81.19 6.60 81.19 21.77 0.50 3.48 NM
FSBC First SB, FSB of Clovis NM 10.38 69.97 3.31 69.97 13.41 0.00 0.00 0.00
FSLA First SB, SLA MHC of NJ (37.6) 12.70 112.66 10.69 129.74 13.24 0.40 2.54 32.26
SOPN First SB, SSB, Moore Co. of NC 18.25 101.73 26.66 101.73 17.89 0.60 3.29 60.00
FWWB First Savings Bancorp of WA* NM 95.87 24.73 95.87 NM 0.20 1.37 37.74
SHEN First Shenango Bancorp of PA 14.93 105.39 13.95 105.39 15.81 0.48 2.23 33.33
FSFC First So.east Fin. Corp. of SC 22.91 103.96 20.39 103.96 23.21 0.48 2.69 61.54
FSFI First State Fin. Serv. of NJ 10.80 97.01 6.64 102.37 13.83 0.22 2.12 22.92
FFDP FirstFed Bancshares of IL 14.55 96.27 8.68 100.82 23.19 0.40 2.50 36.36
FLAG Flag Financial Corp of GA 11.90 116.17 11.11 116.17 13.44 0.34 2.72 32.38
FFPC Florida First Bancorp of FL(8) 14.92 179.33 12.42 179.33 16.22 0.24 2.14 32.00
FFIC Flushing Fin. Corp. of NY* NM 91.26 17.08 91.26 NM 0.00 0.00 0.00
FBHC Fort Bend Holding Corp. of TX 8.33 82.48 6.00 82.48 9.20 0.28 1.58 13.15
FTSB Fort Thomas Fin. Corp. of KY 23.93 123.34 29.97 123.34 23.93 0.25 1.49 35.71
FKKY Frankfort First Bancorp of KY 22.40 85.58 29.54 85.58 NM 0.36 3.03 67.92
GFSB GFS Bancorp of Grinnell IA 12.90 107.09 12.89 107.09 13.15 0.30 1.48 19.11
GUPB GFSB Bancorp of Gallup NM 17.76 78.99 18.19 78.99 17.76 0.40 2.96 52.63
GWBC Gateway Bancorp of KY 21.02 89.37 22.34 89.37 21.02 0.40 2.88 60.61
GBCI Glacier Bancorp of MT 12.36 190.62 18.35 190.96 12.36 0.58 2.67 32.95
GLBK Glendale Co-op. Bank of MA* 14.60 69.59 11.35 69.59 17.37 0.00 0.00 0.00
GFCO Glenway Financial Corp. of OH 14.78 84.30 7.93 86.58 15.46 0.68 3.36 49.64
GTPS Great American Bancorp of IL NM 76.12 22.40 76.12 NM 0.40 2.81 NM
GTFN Great Financial Corp. of KY 17.34 140.02 15.89 142.32 21.33 0.48 1.79 30.97
GSBC Great Southern Bancorp of MO 11.09 182.85 18.50 185.94 11.80 0.70 2.55 28.23
GDVS Greater DV SB,MHC of PA(19.9)* NM 112.87 13.87 112.87 NM 0.36 3.60 NM
GRTR Greater New York SB of NY* 12.64 102.18 5.80 102.18 12.93 0.00 0.00 0.00
GSFC Green Street Fin. Corp. of NC 20.76 93.40 29.44 93.40 20.76 0.00 0.00 0.00
GROV GroveBank for Savings of MA* 8.57 106.64 6.65 106.87 9.09 0.72 2.84 24.32
GFED Guaranty FS&LA,MHC of MO(31.1) 20.03 133.72 19.57 133.72 NM 0.64 5.51 NM
GSLC Guaranty Svgs & Loan FA of VA 11.96 120.78 7.47 120.78 19.47 0.10 1.19 14.29
HEMT HF Bancorp of Hemet CA NM 74.71 8.55 74.77 NM 0.00 0.00 0.00
HFFC HF Financial Corp. of SD(8) 10.77 90.09 8.08 90.36 13.81 0.33 2.17 23.40
HFNC HFNC Financial Corp. of NC NM 116.12 39.61 116.12 NM 0.00 0.00 0.00
HMNF HMN Financial, Inc. of MN 14.27 91.90 15.41 91.90 15.96 0.00 0.00 0.00
HALL Hallmark Capital Corp. of WI 13.16 81.61 6.38 81.61 14.71 0.00 0.00 0.00
HARB Harbor FSB, MHC of FL (45.7) 11.98 153.46 13.59 153.46 12.03 1.20 4.66 55.81
HRBF Harbor Federal Bancorp of MD 19.58 83.09 15.81 83.09 19.58 0.40 3.05 59.70
HFSA Hardin Bancorp of Hardin MO 24.48 77.51 14.91 77.51 24.48 0.40 3.40 NM
HAAL Harleysville SA of PA 10.74 122.30 8.63 122.30 10.56 0.40 2.18 23.39
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HARS Harris SB, MHC of PA (23.1) 12.07 11.31 0.69 5.54 4.29 0.68 5.47 0.75 66.68 0.92
HFFB Harrodsburg 1st Fin Bcrp of KY 28.66 28.66 1.05 4.73 3.27 1.05 4.73 0.60 45.62 0.40
HHFC Harvest Home Fin. Corp. of OH 18.65 18.65 0.89 4.74 5.31 0.89 4.74 0.20 75.00 0.28
HAVN Haven Bancorp of Woodhaven NY 6.30 6.26 0.67 10.24 7.88 0.66 10.11 1.17 50.83 1.48
HVFD Haverfield Corp. of OH 8.30 8.27 0.65 8.20 6.61 0.62 7.71 0.78 103.98 0.95
HTHR Hawthorne Fin. Corp. of CA 3.79 3.76 -0.21 -5.46 -6.94 -0.27 -7.03 11.39 17.41 2.44
HSBK Hibernia SB of Quincy MA* 6.51 6.51 0.68 9.99 9.79 0.54 7.95 0.42 146.75 1.03
HBNK Highland Federal Bank of CA 7.83 7.83 0.22 2.87 2.69 0.21 2.81 1.98 84.53 2.22
HIFS Hingham Inst. for Sav. of MA* 10.04 10.04 1.11 10.78 10.36 1.11 10.78 0.34 204.87 1.00
HNFC Hinsdale Financial Corp. of IL 7.97 7.72 0.62 8.20 6.32 0.59 7.88 0.13 277.71 0.39
HBFW Home Bancorp of Fort Wayne IN 16.42 16.42 0.86 5.00 5.78 0.86 5.00 NA NA 0.60
HBBI Home Building Bancorp of IN 14.13 14.13 0.45 3.17 3.34 0.45 3.17 0.23 446.39 1.48
HOMF Home Fed Bancorp of Seymour IN 8.29 7.97 1.20 15.06 11.67 1.04 13.07 0.47 102.67 0.58
HFMD Home Federal Corporation of MD(8) 8.61 8.50 1.18 14.27 9.30 1.16 13.98 4.75 35.71 2.59
HOFL Home Financial Corp. of FL(8) 25.51 25.51 1.71 6.69 6.09 1.63 6.37 0.06 499.44 1.43
HPBC Home Port Bancorp, Inc. of MA* 11.26 11.26 1.75 15.23 12.08 1.76 15.32 0.65 216.13 1.75
HMCI Homecorp, Inc. of Rockford IL 6.07 6.07 0.37 6.28 6.40 0.25 4.26 3.24 15.53 0.65
LOAN Horizon Bancorp, Inc of TX* 8.65 8.35 1.54 17.77 11.53 1.20 13.90 0.42 127.82 0.78
HZFS Horizon Fin'l. Services of IA 11.57 11.57 0.46 3.70 4.65 0.43 3.44 1.57 28.85 0.67
HRZB Horizon Financial Corp. of WA* 16.19 16.19 1.53 9.53 8.76 1.53 9.53 NA NA 0.82
IBSF IBS Financial Corp. of NJ 20.39 20.39 1.10 5.11 5.07 1.12 5.18 0.07 198.42 0.66
ISBF ISB Financial Corp. of LA 19.37 19.36 1.26 6.94 6.13 1.26 6.94 NA NA 0.91
IFSB Independence FSB of DC 6.48 5.57 0.55 8.92 13.75 0.26 4.22 2.68 7.66 0.38
INCB Indiana Comm. Bank, SB of IN 14.98 14.98 0.68 4.41 4.89 0.68 4.41 NA NA 0.61
IFSL Indiana Federal Corp. of IN 9.82 9.13 1.02 10.77 7.66 0.96 10.08 1.41 65.46 1.20
INBI Industrial Bancorp of OH 19.12 19.12 1.48 8.08 6.91 1.48 8.08 0.40 107.81 0.54
IWBK Interwest SB of Oak Harbor WA 6.88 6.68 1.08 14.86 8.62 1.00 13.71 0.59 59.11 0.62
IPSW Ipswich SB of Ipswich MA* 6.32 6.32 1.39 22.24 13.30 1.21 19.44 2.23 46.20 1.37
IROQ Iroquois Bancorp of Auburn NY* 6.08 6.08 0.86 14.60 11.03 0.86 14.51 1.60 46.24 1.00
JSBF JSB Financial, Inc. of NY 21.82 21.82 1.47 6.73 6.61 1.55 7.13 NA NA 0.61
JXVL Jacksonville Bancorp of TX 16.70 16.70 0.79 6.76 5.56 0.79 6.76 0.86 54.59 0.69
JXSB Jcksnville SB,MHC of IL(43.3%) 11.79 11.79 0.43 3.82 3.43 0.35 3.10 0.52 90.42 0.60
JEBC Jefferson Bancorp of Gretna LA(8) 13.36 13.36 1.00 7.78 5.47 1.00 7.78 0.46 54.63 1.08
JSBA Jefferson Svgs Bancorp of MO 7.02 5.75 0.60 8.20 5.85 0.59 8.04 0.97 48.62 0.66
JOAC Joachim Bancorp of MO 29.24 29.24 0.65 3.14 2.29 0.65 3.14 0.01 NA 0.31
KSAV KS Bancorp of Kenly NC 15.17 15.15 1.14 6.94 8.39 1.15 7.03 0.73 41.55 0.37
KSBK KSB Bancorp of Kingfield ME* 6.85 6.30 0.79 12.18 12.14 0.76 11.67 1.73 40.97 1.04
KFBI Klamath First Bancorp of OR 27.73 27.73 1.34 6.14 4.67 1.34 6.14 0.11 134.99 0.20
LBFI L&B Financial of S. Springs TX(8) 17.14 17.14 1.07 5.78 5.72 1.05 5.71 0.50 120.17 1.35
LSBI LSB Bancorp of Lafayette IN 10.66 10.66 0.82 6.96 7.88 0.78 6.58 0.19 295.51 0.65
LVSB Lakeview SB of Paterson NJ 9.95 7.64 1.15 10.31 10.73 0.69 6.19 1.89 34.35 1.75
LARK Landmark Bancshares of KS 17.20 17.20 0.91 5.28 6.16 0.79 4.60 0.37 97.05 0.64
LARL Laurel Capital Group of PA 10.68 10.68 1.36 13.21 11.59 1.31 12.75 0.70 142.16 1.31
LSBX Lawrence Savings Bank of MA* 7.56 7.56 1.12 14.66 14.18 1.13 14.85 1.98 62.75 2.73
LFCT Leader Fin. Corp of Memphis TN(8) 8.03 8.03 1.41 17.25 8.88 1.37 16.87 16.94 4.30 1.10
LFED Leeds FSB, MHC of MD (35.3) 16.36 16.36 1.03 6.35 5.67 1.03 6.35 0.01 NA 0.24
LXMO Lexington B&L Fin. Corp. of MO 29.42 29.42 1.28 4.34 6.20 1.26 4.27 1.15 35.02 0.49
LBCI Liberty Bancorp of Chicago IL 9.53 9.50 0.56 5.51 6.07 0.56 5.51 0.12 421.89 0.70
LIFB Life Bancorp of Norfolk VA 12.73 12.26 0.85 5.95 6.30 0.88 6.22 0.73 107.84 1.73
LFBI Little Falls Bancorp of NJ 15.22 14.00 0.22 2.42 1.82 0.16 1.75 1.56 20.85 0.94
LOGN Logansport Fin. Corp. of IN 26.77 26.77 1.41 5.71 5.53 1.40 5.63 0.37 79.86 0.44
LONF London Financial Corp. of OH 20.86 20.86 0.57 4.73 3.52 0.57 4.73 0.21 239.74 0.69
LISB Long Island Bancorp of NY 10.69 10.69 0.95 8.77 6.11 0.89 8.20 NA NA 1.45
MAFB MAF Bancorp of IL 5.54 5.54 0.88 15.21 12.82 0.90 15.65 0.46 104.05 0.63
MBLF MBLA Financial Corp. of MO(8) 14.54 14.54 0.70 4.81 4.17 0.70 4.81 0.33 83.20 0.51
MFBC MFB Corp. of Mishawaka IN 19.31 19.31 0.69 3.41 4.50 0.68 3.36 0.05 325.00 0.25
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
HARS Harris SB, MHC of PA (23.1) 23.29 126.39 15.25 134.92 23.61 0.58 3.41 NM
HFFB Harrodsburg 1st Fin Bcrp of KY NM 105.04 30.11 105.04 NM 0.40 2.67 NM
HHFC Harvest Home Fin. Corp. of OH 18.84 88.74 16.55 88.74 18.84 0.40 3.08 57.97
HAVN Haven Bancorp of Woodhaven NY 12.70 129.74 8.17 130.52 12.87 0.60 2.12 26.91
HVFD Haverfield Corp. of OH 15.13 121.54 10.09 121.95 16.07 0.54 3.00 45.38
HTHR Hawthorne Fin. Corp. of CA NM 75.49 2.86 75.96 NM 0.00 0.00 NM
HSBK Hibernia SB of Quincy MA* 10.21 97.64 6.35 97.64 12.83 0.28 1.93 19.72
HBNK Highland Federal Bank of CA NM 106.10 8.31 106.10 NM 0.00 0.00 0.00
HIFS Hingham Inst. for Sav. of MA* 9.66 100.86 10.12 100.86 9.66 0.32 2.29 22.07
HNFC Hinsdale Financial Corp. of IL 15.82 123.76 9.86 127.68 16.45 0.00 0.00 0.00
HBFW Home Bancorp of Fort Wayne IN 17.29 89.58 14.71 89.58 17.29 0.20 1.34 23.26
HBBI Home Building Bancorp of IN NM 95.06 13.43 95.06 NM 0.30 1.70 50.85
HOMF Home Fed Bancorp of Seymour IN 8.57 120.63 10.00 125.46 9.87 0.50 1.83 15.72
HFMD Home Federal Corporation of MD(8) 10.75 145.07 12.50 147.06 10.97 0.16 1.49 16.00
HOFL Home Financial Corp. of FL(8) 16.41 107.75 27.49 107.75 17.24 0.80 5.87 NM
HPBC Home Port Bancorp, Inc. of MA* 8.28 127.45 14.35 127.45 8.23 0.60 4.62 38.22
HMCI Homecorp, Inc. of Rockford IL 15.63 95.06 5.77 95.06 23.03 0.00 0.00 0.00
LOAN Horizon Bancorp, Inc of TX* 8.67 135.90 11.75 140.71 11.08 0.16 1.49 12.90
HZFS Horizon Fin'l. Services of IA 21.53 83.07 9.61 83.07 23.13 0.32 2.06 44.44
HRZB Horizon Financial Corp. of WA* 11.42 104.41 16.90 104.41 11.42 0.32 2.55 29.09
IBSF IBS Financial Corp. of NJ 19.72 103.47 21.10 103.47 19.44 0.24 1.71 33.80
ISBF ISB Financial Corp. of LA 16.33 97.74 18.93 97.80 16.33 0.32 2.00 32.65
IFSB Independence FSB of DC 7.27 59.88 3.88 69.69 15.38 0.22 2.75 20.00
INCB Indiana Comm. Bank, SB of IN 20.43 89.19 13.36 89.19 20.43 0.35 2.56 52.24
IFSL Indiana Federal Corp. of IN 13.06 136.90 13.44 147.29 13.95 0.72 3.53 46.15
INBI Industrial Bancorp of OH 14.48 105.42 20.16 105.42 14.48 0.30 2.53 36.59
IWBK Interwest SB of Oak Harbor WA 11.59 164.05 11.28 168.90 12.57 0.48 2.00 23.19
IPSW Ipswich SB of Ipswich MA* 7.52 148.89 9.41 148.89 8.60 0.20 1.86 13.99
IROQ Iroquois Bancorp of Auburn NY* 9.06 124.25 7.55 124.25 9.12 0.32 2.21 20.00
JSBF JSB Financial, Inc. of NY 15.12 101.28 22.10 101.28 14.28 1.20 3.62 54.79
JXVL Jacksonville Bancorp of TX 18.00 79.43 13.27 79.43 18.00 0.50 4.71 NM
JXSB Jcksnville SB,MHC of IL(43.3%) NM 104.40 12.31 104.40 NM 0.40 2.86 NM
JEBC Jefferson Bancorp of Gretna LA(8) 18.28 137.14 18.33 137.14 18.28 0.30 1.36 24.79
JSBA Jefferson Svgs Bancorp of MO 17.11 135.49 9.51 165.39 17.45 0.32 1.23 21.05
JOAC Joachim Bancorp of MO NM 86.57 25.32 86.57 NM 0.50 4.08 NM
KSAV KS Bancorp of Kenly NC 11.92 87.55 13.28 87.68 11.76 0.60 3.33 39.74
KSBK KSB Bancorp of Kingfield ME* 8.24 94.30 6.46 102.47 8.59 0.20 0.91 7.49
KFBI Klamath First Bancorp of OR 21.39 94.77 26.28 94.77 21.39 0.26 1.84 39.39
LBFI L&B Financial of S. Springs TX(8) 17.47 104.84 17.97 104.84 17.66 0.40 2.46 43.01
LSBI LSB Bancorp of Lafayette IN 12.70 90.48 9.65 90.48 13.43 0.32 1.97 25.00
LVSB Lakeview SB of Paterson NJ 9.32 102.55 10.21 133.55 15.53 0.25 1.22 11.36
LARK Landmark Bancshares of KS 16.22 89.44 15.38 89.44 18.60 0.40 2.62 42.55
LARL Laurel Capital Group of PA 8.63 107.90 11.52 107.90 8.94 0.32 2.17 18.71
LSBX Lawrence Savings Bank of MA* 7.05 95.49 7.22 95.49 6.96 0.00 0.00 0.00
LFCT Leader Fin. Corp of Memphis TN(8) 11.26 176.97 14.21 176.97 11.52 0.72 1.58 17.82
LFED Leeds FSB, MHC of MD (35.3) 17.63 108.70 17.78 108.70 17.63 0.64 4.65 NM
LXMO Lexington B&L Fin. Corp. of MO 16.13 70.08 20.62 70.08 16.39 0.00 0.00 0.00
LBCI Liberty Bancorp of Chicago IL 16.46 93.02 8.86 93.28 16.46 0.60 2.51 41.38
LIFB Life Bancorp of Norfolk VA 15.87 95.79 12.19 99.44 15.18 0.44 3.12 49.44
LFBI Little Falls Bancorp of NJ NM 69.07 10.51 75.11 NM 0.10 1.01 55.56
LOGN Logansport Fin. Corp. of IN 18.09 88.77 23.76 88.77 18.33 0.40 2.91 52.63
LONF London Financial Corp. of OH NM 70.90 14.79 70.90 NM 0.00 0.00 0.00
LISB Long Island Bancorp of NY 16.37 144.88 15.49 144.88 17.51 0.40 1.33 21.74
MAFB MAF Bancorp of IL 7.80 115.97 6.42 115.97 7.58 0.32 1.32 10.29
MBLF MBLA Financial Corp. of MO(8) 24.00 116.11 16.88 116.11 24.00 0.40 1.67 40.00
MFBC MFB Corp. of Mishawaka IN 22.22 74.99 14.48 74.99 22.58 0.00 0.00 0.00
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MLFB MLF Bancorp of Villanova PA 7.95 7.75 0.70 8.06 7.83 0.62 7.15 0.59 125.65 1.64
MSBB MSB Bancorp of Middletown NY* 9.69 9.52 0.53 5.65 5.15 0.57 6.05 NA NA 0.57
MSBF MSB Financial Corp. of MI 22.64 22.64 1.93 7.88 9.07 1.76 7.21 0.60 100.59 0.69
MGNL Magna Bancorp of MS 9.77 9.18 1.76 18.10 8.80 1.66 17.10 4.18 16.96 1.01
MARN Marion Capital Holdings of IN 23.99 23.99 1.40 5.77 5.93 1.40 5.77 0.93 120.08 1.42
MFCX Marshalltown Fin. Corp. of IA(8) 15.33 15.33 0.33 2.14 1.87 0.33 2.14 NA NA 0.20
MFSL Maryland Fed. Bancorp of MD 8.22 8.08 0.75 9.08 9.51 0.65 7.94 0.48 81.70 0.45
MASB MassBank Corp. of Reading MA* 10.16 10.16 1.04 10.42 9.86 1.02 10.20 0.33 87.49 1.00
MFLR Mayflower Co-Op. Bank of MA* 9.87 9.65 0.84 7.86 6.44 0.79 7.37 1.58 59.62 1.49
MDBK Medford Savings Bank of MA* 8.88 8.06 1.02 11.63 10.00 1.00 11.41 0.55 135.58 1.38
MERI Meritrust FSB of Thibodaux LA 7.44 7.44 1.01 13.99 8.50 1.01 13.99 0.23 131.08 0.62
MWBX Metro West of MA* 7.47 7.47 1.25 17.15 9.95 1.25 17.15 2.43 38.37 1.37
MSEA Metropolitan Bancorp of WA 6.54 5.92 0.71 10.67 10.21 0.77 11.51 NA NA 1.76
MCBS Mid Continent Bancshares of KS 12.53 12.50 1.37 9.90 9.46 1.16 8.37 0.21 59.97 0.25
MIFC Mid Iowa Financial Corp. of IA 9.03 9.01 0.83 8.92 8.48 0.80 8.59 0.15 142.62 0.44
MCBN Mid-Coast Bancorp of ME 9.06 9.06 0.56 6.32 6.96 0.51 5.80 1.10 36.89 0.51
MIDC Midconn Bank of Kensington CT* 9.45 7.88 0.34 3.56 4.00 0.32 3.45 2.04 24.62 0.72
MWBI Midwest Bancshares, Inc. of IA 6.94 6.94 0.99 14.20 14.41 0.96 13.86 0.27 175.00 0.85
MWFD Midwest Fed. Fin. Corp of WI 9.34 8.92 1.19 12.30 7.69 0.96 9.88 0.26 294.77 1.06
MFFC Milton Fed. Fin. Corp. of OH 19.98 19.98 1.13 4.93 6.14 1.05 4.56 0.40 54.24 0.35
MIVI Miss. View Hold. Co. of MN 18.86 18.86 1.32 6.75 8.44 1.25 6.40 0.14 888.89 2.07
MBBC Monterey Bay Bancorp of CA 14.98 14.80 0.19 1.27 1.52 0.23 1.55 0.60 71.38 0.60
MORG Morgan Financial Corp. of CO 14.66 14.66 0.97 6.43 6.53 0.93 6.18 0.28 60.61 0.24
MFSB Mutual Bancompany of MO(8) 11.70 11.70 0.20 1.83 1.59 0.23 2.10 NA NA NA
MSBK Mutual SB, FSB of Bay City MI 5.46 5.46 0.01 0.21 0.37 -0.09 -1.71 0.11 215.12 0.83
NHTB NH Thrift Bancshares of NH 7.69 7.69 0.57 7.35 8.41 0.59 7.70 1.39 56.18 0.96
NHSL NHS Financial, Inc. of CA(8) 8.43 8.42 0.17 1.97 1.75 0.16 1.86 2.05 57.88 1.36
NSLB NS&L Bancorp of Neosho MO 23.49 23.49 0.93 4.27 4.58 0.87 3.98 0.18 40.95 0.15
NMSB Newmil Bancorp. of CT* 11.14 11.14 2.04 19.29 21.78 2.03 19.16 2.88 61.88 3.42
NFSL Newnan SB, FSB of Newnan GA 11.58 11.50 1.85 17.54 10.63 1.62 15.29 0.67 128.82 1.07
NASB North American SB of MO 7.35 7.05 1.33 18.45 12.26 1.27 17.61 3.36 26.33 1.05
NBSI North Bancshares of Chicago IL 17.34 17.34 0.57 3.03 3.43 0.52 2.75 NA NA 0.36
FFFD North Central Bancshares of IA 28.87 28.87 1.48 7.67 5.91 1.39 7.19 0.13 743.80 1.18
NEIB Northeast Indiana Bncrp of IN 20.34 20.34 1.10 5.50 5.96 1.10 5.50 0.25 272.13 0.74
NSBK Northside SB of Bronx NY* 7.74 7.67 1.14 15.51 10.29 0.98 13.39 0.51 84.90 1.67
NWEQ Northwest Equity Corp. of WI 13.73 13.73 1.08 6.99 8.39 1.03 6.67 0.92 54.33 0.61
NWSB Northwest SB, MHC of PA(29.9) 10.67 10.54 1.05 9.37 6.21 1.05 9.37 0.98 70.63 0.94
NSSY Norwalk Savings Society of CT* 7.98 7.98 0.75 8.92 7.81 0.64 7.63 3.01 27.48 1.20
NSSB Norwich Financial Corp. of CT* 10.58 9.54 0.84 7.50 7.23 0.84 7.50 1.92 113.80 3.44
NTMG Nutmeg FS&LA of CT 5.98 5.98 0.63 10.78 10.48 0.38 6.52 NA NA 0.56
OHSL OHSL Financial Corp. of OH 12.42 12.42 0.96 7.50 7.60 0.93 7.30 0.26 97.54 0.36
OSBF OSB Fin. Corp. of Oshkosh WI 12.59 12.59 0.17 1.33 1.58 0.30 2.31 0.14 258.58 0.56
OFCP Ottawa Financial Corp. of MI 10.92 8.75 0.92 4.93 4.40 0.92 4.93 0.38 95.16 0.45
PFFB PFF Bancorp of Pomona CA 14.39 14.23 0.10 1.37 0.87 0.10 1.37 2.29 42.84 1.23
PVFC PVF Capital Corp. of OH 6.71 6.71 1.13 17.84 11.16 0.99 15.71 NA NA NA
PCCI Pacific Crest Capital of CA* 7.90 7.90 1.09 20.44 11.63 0.88 16.48 6.49 26.06 2.56
PALM Palfed, Inc. of Aiken SC 8.45 8.04 0.66 8.56 6.56 0.56 7.20 4.14 31.72 1.69
PSSB Palm Springs SB of CA(8) 6.09 6.09 0.62 10.84 7.71 0.33 5.78 4.09 15.83 0.75
PBCI Pamrapo Bancorp, Inc. of NJ 15.50 15.35 1.42 9.06 7.95 1.42 9.06 3.05 24.34 1.26
PVSA Parkvale Financial Corp of PA 7.42 7.39 1.05 14.79 11.15 0.98 13.82 0.18 850.40 2.28
PBIX Patriot Bank Corp. of PA 17.29 17.29 0.56 3.99 3.20 0.57 4.08 0.23 243.20 0.88
PEEK Peekskill Fin. Corp. of NY 30.67 30.67 1.06 4.96 3.74 1.11 5.19 0.83 31.67 1.32
PFSB PennFed Fin. Services of NJ 8.97 7.11 0.73 7.10 8.32 0.79 7.70 0.96 26.31 0.44
PWBC PennFirst Bancorp of PA 7.85 7.15 0.61 7.47 7.41 0.60 7.40 0.64 63.45 1.45
PBKB People's SB of Brockton MA* 4.93 4.67 0.73 12.13 7.50 0.53 8.69 1.27 76.25 1.93
PFDC Peoples Bancorp of Auburn IN 15.26 15.26 1.45 9.62 8.40 1.44 9.56 0.33 97.48 0.41
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
MLFB MLF Bancorp of Villanova PA 12.77 105.74 8.40 108.45 14.39 0.76 3.20 40.86
MSBB MSB Bancorp of Middletown NY* 19.42 103.80 10.06 105.64 18.11 0.60 3.72 72.29
MSBF MSB Financial Corp. of MI 11.03 89.45 20.25 89.45 12.05 0.50 2.96 32.68
MGNL Magna Bancorp of MS 11.36 193.16 18.87 205.64 12.03 0.60 1.71 19.48
MARN Marion Capital Holdings of IN 16.87 96.60 23.18 96.60 16.87 0.80 3.86 65.04
MFCX Marshalltown Fin. Corp. of IA(8) NM 113.06 17.33 113.06 NM 0.00 0.00 0.00
MFSL Maryland Fed. Bancorp of MD 10.52 95.51 7.85 97.14 12.03 0.64 2.25 23.62
MASB MassBank Corp. of Reading MA* 10.15 103.01 10.46 103.01 10.37 0.88 2.68 27.16
MFLR Mayflower Co-Op. Bank of MA* 15.53 117.91 11.63 120.61 16.57 0.40 2.71 42.11
MDBK Medford Savings Bank of MA* 10.00 111.75 9.93 123.21 10.19 0.68 3.16 31.63
MERI Meritrust FSB of Thibodaux LA 11.76 155.75 11.59 155.75 11.76 0.60 1.76 20.76
MWBX Metro West of MA* 10.05 160.31 11.97 160.31 10.05 0.10 2.43 24.39
MSEA Metropolitan Bancorp of WA 9.80 99.34 6.49 109.75 9.08 0.00 0.00 0.00
MCBS Mid Continent Bancshares of KS 10.57 104.64 13.11 104.82 12.50 0.40 2.16 22.86
MIFC Mid Iowa Financial Corp. of IA 11.79 100.32 9.06 100.48 12.25 0.08 1.28 15.09
MCBN Mid-Coast Bancorp of ME 14.38 88.89 8.05 88.89 15.67 0.50 2.62 37.59
MIDC Midconn Bank of Kensington CT* 25.00 88.25 8.34 105.89 NM 0.60 3.75 NM
MWBI Midwest Bancshares, Inc. of IA 6.94 96.88 6.72 96.88 7.11 0.52 2.02 14.02
MWFD Midwest Fed. Fin. Corp of WI 13.01 155.59 14.54 162.94 16.19 0.15 0.95 12.30
MFFC Milton Fed. Fin. Corp. of OH 16.29 86.32 17.25 86.32 17.63 0.48 3.73 60.76
MIVI Miss. View Hold. Co. of MN 11.84 81.64 15.40 81.64 12.50 0.00 0.00 0.00
MBBC Monterey Bay Bancorp of CA NM 84.85 12.71 85.89 NM 0.00 0.00 0.00
MORG Morgan Financial Corp. of CO 15.31 97.15 14.24 97.15 15.91 0.24 1.96 30.00
MFSB Mutual Bancompany of MO(8) NM 114.10 13.35 114.10 NM 0.00 0.00 0.00
MSBK Mutual SB, FSB of Bay City MI NM 58.43 3.19 58.43 NM 0.00 0.00 0.00
NHTB NH Thrift Bancshares of NH 11.89 85.90 6.61 85.90 11.34 0.50 5.07 60.24
NHSL NHS Financial, Inc. of CA(8) NM 111.15 9.37 111.37 NM 0.16 1.47 NM
NSLB NS&L Bancorp of Neosho MO 21.81 82.39 19.35 82.39 23.40 0.50 3.89 NM
NMSB Newmil Bancorp. of CT* 4.59 86.87 9.67 86.87 4.62 0.20 2.96 13.61
NFSL Newnan SB, FSB of Newnan GA 9.40 153.58 17.79 154.66 10.79 0.40 2.03 19.05
NASB North American SB of MO 8.16 142.26 10.45 148.20 8.54 0.63 2.07 16.84
NBSI North Bancshares of Chicago IL NM 93.09 16.14 93.09 NM 0.40 2.54 74.07
FFFD North Central Bancshares of IA 16.92 80.17 23.15 80.17 18.03 0.25 2.27 38.46
NEIB Northeast Indiana Bncrp of IN 16.79 84.41 17.17 84.41 16.79 0.30 2.55 42.86
NSBK Northside SB of Bronx NY* 9.72 142.72 11.04 144.08 11.26 1.00 2.76 26.81
NWEQ Northwest Equity Corp. of WI 11.92 84.78 11.64 84.78 12.50 0.36 3.51 41.86
NWSB Northwest SB, MHC of PA(29.9) 16.10 145.60 15.54 147.43 16.10 0.30 2.55 41.10
NSSY Norwalk Savings Society of CT* 12.81 111.68 8.92 111.68 14.98 0.00 0.00 0.00
NSSB Norwich Financial Corp. of CT* 13.84 100.97 10.68 111.88 13.84 0.40 2.95 40.82
NTMG Nutmeg FS&LA of CT 9.54 100.69 6.03 100.69 15.76 0.00 0.00 0.00
OHSL OHSL Financial Corp. of OH 13.15 96.50 11.99 96.50 13.50 0.76 3.78 49.67
OSBF OSB Fin. Corp. of Oshkosh WI NM 85.71 10.79 85.71 NM 0.64 2.67 NM
OFCP Ottawa Financial Corp. of MI 22.74 109.72 11.98 136.87 22.74 0.32 1.95 44.44
PFFB PFF Bancorp of Pomona CA NM 78.52 11.30 79.44 NM 0.00 0.00 0.00
PVFC PVF Capital Corp. of OH 8.96 147.06 9.86 147.06 10.18 0.00 0.00 0.00
PCCI Pacific Crest Capital of CA* 8.60 104.44 8.25 104.44 10.67 0.00 0.00 0.00
PALM Palfed, Inc. of Aiken SC 15.24 123.89 10.47 130.21 18.12 0.08 0.64 9.76
PSSB Palm Springs SB of CA(8) 12.96 134.14 8.17 134.14 24.33 0.12 0.87 11.21
PBCI Pamrapo Bancorp, Inc. of NJ 12.58 116.21 18.01 117.30 12.58 0.90 4.50 56.60
PVSA Parkvale Financial Corp of PA 8.97 123.87 9.20 124.46 9.59 0.52 2.00 17.93
PBIX Patriot Bank Corp. of PA NM 84.81 14.66 84.81 NM 0.24 1.83 57.14
PEEK Peekskill Fin. Corp. of NY NM 81.09 24.87 81.09 NM 0.36 3.06 NM
PFSB PennFed Fin. Services of NJ 12.02 87.78 7.88 110.82 11.10 0.00 0.00 0.00
PWBC PennFirst Bancorp of PA 13.50 100.97 7.93 110.84 13.64 0.36 2.67 36.00
PBKB People's SB of Brockton MA* 13.34 125.41 6.18 132.48 18.62 0.28 2.84 37.84
PFDC Peoples Bancorp of Auburn IN 11.91 111.32 16.99 111.32 11.98 0.56 2.77 32.94
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PBCT Peoples Bank, MHC of CT(32.3)* 8.00 8.00 1.11 14.66 8.49 0.89 11.81 1.66 65.45 1.65
PHBK Peoples Heritage Fin Grp of ME* 8.38 7.20 1.21 14.20 10.57 1.19 14.00 1.24 130.41 2.11
PBNB Peoples Sav. Fin. Corp. of CT* 10.81 10.00 0.85 7.91 8.78 0.89 8.26 0.44 86.77 0.64
PERM Permanent Bancorp of IN 11.14 10.98 0.32 2.72 3.37 0.32 2.72 1.85 31.59 1.07
PMFI Perpetual Midwest Fin. of IA 9.64 9.64 0.41 4.10 4.29 0.41 4.10 0.53 136.14 0.93
PCBC Perry Co. Fin. Corp. of MO 20.86 20.86 1.00 5.36 5.03 1.00 5.36 0.04 31.25 0.10
PHFC Pittsburgh Home Fin. of PA 16.43 16.43 0.65 3.98 5.21 0.65 3.98 1.53 34.96 0.93
PFSL Pocahnts Fed, MHC of AR (46.4) 5.95 5.95 0.56 9.43 8.34 0.58 9.66 0.26 146.44 1.14
POBS Portsmouth Bank Shrs Inc of NH(8)* 25.06 25.06 2.29 9.01 7.64 1.93 7.56 0.21 122.90 0.83
PKPS Poughkeepsie SB of NY 8.50 8.50 1.94 24.70 23.43 2.56 32.53 2.68 36.80 1.34
PETE Primary Bank of NH* 6.34 6.31 -0.04 -0.64 -0.65 -0.04 -0.56 1.81 47.18 1.48
PSAB Prime Bancorp, Inc. of PA 9.44 8.83 1.02 10.92 9.14 0.91 9.69 0.60 105.04 1.05
PFNC Progress Financial Corp. of PA 5.52 5.48 0.86 19.19 12.96 0.67 14.93 1.33 44.33 0.94
PSBK Progressive Bank, Inc. of NY* 8.86 8.86 0.98 10.51 9.25 1.01 10.82 1.09 97.07 1.52
PULB Pulaski SB, MHC of MO (29.0) 12.63 12.63 0.84 6.93 4.95 0.79 6.55 0.67 37.37 0.31
PULS Pulse Bancorp of S. River NJ 11.89 11.89 1.17 10.07 7.77 1.18 10.14 1.45 38.35 1.88
QCFB QCF Bancorp of Virginia MN 21.81 21.81 1.52 7.75 8.83 1.52 7.75 NA NA NA
QCBC Quaker City Bancorp of CA 9.88 9.82 0.50 4.91 5.85 0.48 4.74 2.31 57.33 1.54
QCSB Queens County SB of NY* 16.98 16.98 1.72 9.78 7.12 1.77 10.10 0.75 120.88 1.09
RCSB RCSB Financial, Inc. of NY* 7.29 7.05 0.80 10.95 9.48 0.79 10.77 0.83 76.65 1.27
RARB Raritan Bancorp. of Raritan NJ* 7.24 7.06 0.81 10.82 9.35 0.80 10.65 0.48 155.58 1.32
REDF RedFed Bancorp of Redlands CA 5.63 5.63 -0.47 -8.41 -11.02 -0.45 -8.09 4.50 31.29 1.76
RELY Reliance Bancorp of NY 8.86 5.98 0.88 6.79 7.29 0.85 6.49 0.85 29.31 0.54
RELI Reliance Bancshares Inc of WI* 56.23 56.23 1.47 2.62 3.68 1.47 2.62 NA NA 0.49
RFED Roosevelt Fin. Grp. Inc. of MO 4.86 4.59 0.63 13.98 7.01 0.85 18.94 0.40 59.09 0.57
RVSB Rvrview SB,FSB MHC of WA(40.3) 11.02 9.75 1.30 11.97 8.07 1.17 10.78 0.26 119.16 0.51
SCCB S. Carolina Comm. Bnshrs of SC 28.46 28.46 1.36 4.54 4.85 1.36 4.54 NA NA 0.89
SBFL SB Fing. Lakes MHC of NY(33.0) 11.52 11.52 -0.54 -4.46 -3.25 -0.20 -1.63 1.68 29.38 1.02
SFED SFS Bancorp of Schenectady NY 14.05 14.05 0.63 4.91 6.17 0.63 4.91 0.71 52.95 0.59
SGVB SGV Bancorp of W. Covina CA 9.78 9.78 0.11 1.12 1.39 0.11 1.12 1.84 13.07 0.31
SISB SIS Bank of Sprinfield MA* 7.42 7.42 1.26 17.35 13.28 1.28 17.65 1.11 116.01 2.54
SJSB SJS Bancorp of St. Joseph MI 11.67 11.67 0.63 5.03 4.24 0.61 4.91 0.29 144.27 0.67
SWCB Sandwich Co-Op. Bank of MA* 8.60 8.03 0.85 10.27 9.60 0.79 9.63 1.34 64.69 1.31
SFBM Security Bancorp of MT 8.93 7.68 0.69 7.99 8.44 0.51 5.94 0.14 235.42 0.71
SECP Security Capital Corp. of WI 16.88 16.88 0.89 5.11 4.88 0.92 5.28 0.12 964.94 1.53
SFSL Security First Corp. of OH 8.71 8.47 1.18 13.57 11.43 1.23 14.21 0.44 208.07 1.02
SHFC Seven Hills Fin. Corp. of OH(8) 21.21 21.21 0.36 1.69 1.94 0.34 1.58 0.22 51.02 0.14
SMFC Sho-Me Fin. Corp. of MO 11.98 11.98 0.83 6.18 6.86 0.82 6.12 NA NA 0.75
SOBI Sobieski Bancorp of S. Bend IN 18.49 18.49 0.42 2.27 3.18 0.42 2.27 NA NA 0.41
SOSA Somerset Savings Bank of MA(8)* 5.46 5.46 0.32 6.25 6.80 0.32 6.25 9.74 15.15 1.88
SMBC Southern Missouri Bncrp of MO 16.40 16.40 0.88 5.01 5.29 0.82 4.69 0.97 39.01 0.66
SWBI Southwest Bancshares of IL 12.00 12.00 1.19 8.94 8.37 1.19 8.90 0.25 87.66 0.31
SVRN Sovereign Bancorp of PA 4.07 2.63 0.70 16.67 11.02 0.63 15.04 0.55 74.40 0.68
STFR St. Francis Cap. Corp. of WI 10.43 9.96 1.30 11.85 10.69 0.89 8.08 0.04 906.03 0.76
SPBC St. Paul Bancorp, Inc. of IL 9.24 9.21 0.88 9.69 8.43 0.86 9.44 0.74 125.05 1.35
STND Standard Fin. of Chicago IL 12.31 12.30 0.87 6.21 6.81 0.79 5.61 0.14 189.20 0.49
SFFC StateFed Financial Corp. of IA 20.11 20.11 1.18 5.80 6.44 1.18 5.80 NA NA 0.38
SFIN Statewide Fin. Corp. of NJ 11.10 11.06 0.52 5.43 4.31 0.64 6.66 1.26 41.78 1.47
STSA Sterling Financial Corp. of WA 4.18 3.35 0.33 7.72 6.24 0.32 7.56 0.63 82.62 0.87
SSBK Strongsville SB of OH 8.28 8.10 1.00 11.90 8.85 0.85 10.06 0.49 46.78 0.31
SFSB SuburbFed Fin. Corp. of IL 7.14 7.10 0.51 7.04 8.06 0.44 6.04 0.27 82.72 0.51
SBCN Suburban Bancorp. of OH 13.00 13.00 0.40 2.98 3.53 0.57 4.33 0.20 794.18 2.06
SCSL Suncoast S&LA of Hollywood FL 2.81 2.80 0.33 11.53 12.09 -0.41 -14.33 0.31 47.77 0.19
THRD TF Financial Corp. of PA 14.31 14.31 0.92 5.57 6.48 0.89 5.39 0.35 82.72 0.53
ROSE TR Financial Corp. of NY 6.23 6.23 0.86 12.76 10.23 0.68 10.08 0.92 49.56 0.91
TPNZ Tappan Zee Fin. Corp. of NY 19.48 19.48 0.80 6.07 4.24 0.74 5.61 1.77 32.15 1.26
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(x) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PBCT Peoples Bank, MHC of CT(32.3)* 11.77 158.43 12.67 158.43 14.62 0.80 3.58 42.11
PHBK Peoples Heritage Fin Grp of ME* 9.46 124.69 10.44 144.95 9.60 0.68 3.36 31.78
PBNB Peoples Sav. Fin. Corp. of CT* 11.39 89.36 9.66 96.61 10.90 0.92 4.49 51.11
PERM Permanent Bancorp of IN NM 81.78 9.11 82.98 NM 0.20 1.27 37.74
PMFI Perpetual Midwest Fin. of IA 23.29 95.13 9.17 95.13 23.29 0.30 1.76 41.10
PCBC Perry Co. Fin. Corp. of MO 19.89 92.89 19.38 92.89 19.89 0.30 1.71 34.09
PHFC Pittsburgh Home Fin. of PA 19.20 76.36 12.55 76.36 19.20 0.00 0.00 0.00
PFSL Pocahnts Fed, MHC of AR (46.4) 11.99 108.14 6.43 108.14 11.71 0.80 5.42 65.04
POBS Portsmouth Bank Shrs Inc of NH(8)* 13.08 118.75 29.76 118.75 15.58 0.60 4.33 56.60
PKPS Poughkeepsie SB of NY 4.27 92.27 7.84 92.27 3.24 0.10 1.90 8.13
PETE Primary Bank of NH* NM 96.00 6.09 96.38 NM 0.00 0.00 NM
PSAB Prime Bancorp, Inc. of PA 10.94 114.12 10.77 122.02 12.32 0.68 3.86 42.24
PFNC Progress Financial Corp. of PA 7.72 121.36 6.70 122.31 9.92 0.00 0.00 0.00
PSBK Progressive Bank, Inc. of NY* 10.81 111.53 9.88 111.53 10.50 0.80 2.71 29.30
PULB Pulaski SB, MHC of MO (29.0) 20.21 136.32 17.22 136.32 21.38 0.80 5.42 NM
PULS Pulse Bancorp of S. River NJ 12.87 126.45 15.03 126.45 12.77 0.70 4.00 51.47
QCFB QCF Bancorp of Virginia MN 11.33 81.41 17.76 81.41 11.33 0.00 0.00 0.00
QCBC Quaker City Bancorp of CA 17.11 82.44 8.15 82.92 17.74 0.00 0.00 0.00
QCSB Queens County SB of NY* 14.05 136.06 23.10 136.06 13.61 1.00 2.10 29.50
RCSB RCSB Financial, Inc. of NY* 10.54 115.46 8.42 119.44 10.72 0.48 1.87 19.75
RARB Raritan Bancorp. of Raritan NJ* 10.70 117.90 8.54 120.92 10.86 0.60 2.89 30.93
REDF RedFed Bancorp of Redlands CA NM 80.84 4.55 80.84 NM 0.00 0.00 NM
RELY Reliance Bancorp of NY 13.71 93.31 8.27 138.32 14.34 0.46 2.94 40.35
RELI Reliance Bancshares Inc of WI* NM 71.16 40.01 71.16 NM 0.00 0.00 0.00
RFED Roosevelt Fin. Grp. Inc. of MO 14.26 182.64 8.88 193.27 10.52 0.62 3.22 45.93
RVSB Rvrview SB,FSB MHC of WA(40.3) 12.40 140.06 15.43 158.23 13.76 0.20 1.33 16.53
SCCB S. Carolina Comm. Bnshrs of SC 20.63 98.21 27.96 98.21 20.63 0.60 3.64 75.00
SBFL SB Fing. Lakes MHC of NY(33.0) NM 140.35 16.17 140.35 NM 0.40 2.50 NM
SFED SFS Bancorp of Schenectady NY 16.22 71.94 10.11 71.94 16.22 0.00 0.00 0.00
SGVB SGV Bancorp of W. Covina CA NM 72.19 7.06 72.19 NM 0.00 0.00 0.00
SISB SIS Bank of Sprinfield MA* 7.53 117.11 8.69 117.11 7.40 0.00 0.00 0.00
SJSB SJS Bancorp of St. Joseph MI 23.58 115.99 13.53 115.99 24.13 0.40 1.93 45.45
SWCB Sandwich Co-Op. Bank of MA* 10.42 102.77 8.84 110.01 11.11 1.00 5.00 52.08
SFBM Security Bancorp of MT 11.84 92.13 8.22 107.03 15.94 0.64 3.16 37.43
SECP Security Capital Corp. of WI 20.48 103.46 17.46 103.46 19.82 0.60 0.98 20.07
SFSL Security First Corp. of OH 8.75 113.30 9.87 116.52 8.36 0.44 3.35 29.33
SHFC Seven Hills Fin. Corp. of OH(8) NM 88.84 18.84 88.84 NM 0.36 2.25 NM
SMFC Sho-Me Fin. Corp. of MO 14.58 90.73 10.87 90.73 14.72 0.00 0.00 0.00
SOBI Sobieski Bancorp of S. Bend IN NM 72.61 13.43 72.61 NM 0.00 0.00 0.00
SOSA Somerset Savings Bank of MA(8)* 14.70 88.02 4.80 88.02 14.70 0.00 0.00 0.00
SMBC Southern Missouri Bncrp of MO 18.91 95.72 15.70 95.72 20.21 0.50 3.39 64.10
SWBI Southwest Bancshares of IL 11.95 120.96 14.52 120.96 12.00 1.08 3.98 47.58
SVRN Sovereign Bancorp of PA 9.07 143.36 5.83 221.38 10.05 0.08 0.78 7.08
STFR St. Francis Cap. Corp. of WI 9.35 109.40 11.42 114.56 13.72 0.40 1.58 14.81
SPBC St. Paul Bancorp, Inc. of IL 11.86 112.02 10.35 112.40 12.17 0.40 1.73 20.51
STND Standard Fin. of Chicago IL 14.68 94.21 11.59 94.26 16.26 0.32 2.12 31.07
SFFC StateFed Financial Corp. of IA 15.53 88.25 17.75 88.25 15.53 0.40 2.50 38.83
SFIN Statewide Fin. Corp. of NJ 23.23 92.14 10.23 92.42 18.94 0.00 0.00 0.00
STSA Sterling Financial Corp. of WA 16.03 127.71 5.34 159.29 16.39 0.00 0.00 0.00
SSBK Strongsville SB of OH 11.30 128.79 10.66 131.58 13.36 0.48 2.26 25.53
SFSB SuburbFed Fin. Corp. of IL 12.41 85.28 6.09 85.78 14.46 0.32 1.83 22.70
SBCN Suburban Bancorp. of OH NM 86.66 11.27 86.66 19.48 0.60 4.00 NM
SCSL Suncoast S&LA of Hollywood FL 8.27 92.87 2.61 93.29 NM 0.00 0.00 0.00
THRD TF Financial Corp. of PA 15.43 88.25 12.63 88.25 15.93 0.32 2.21 34.04
ROSE TR Financial Corp. of NY 9.78 126.73 7.90 126.73 12.38 0.64 2.42 23.62
TPNZ Tappan Zee Fin. Corp. of NY 23.56 88.77 17.29 88.77 NM 0.20 1.63 38.46
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of June 14, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Financial Institution Equity/ Equity/ Reported Earnings Core Earnings NPAs Resvs/ Resvs/
- --------------------- ---------------------- ---------------
Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
------- ------- ------ ------- ------- ------- ------- ------- ------ ------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PTAS The Potters S&L Co. of OH 9.73 9.73 0.54 5.69 7.08 0.53 5.59 2.49 72.71 3.96
THIR Third Financial Corp. of OH(8) 18.15 18.15 1.40 7.87 5.93 1.26 7.03 0.23 325.62 0.91
TSBS Trenton SB, FSB MHC of NJ(35.0 19.04 18.61 1.81 11.21 7.37 1.20 7.47 0.48 69.57 0.55
TRIC Tri-County Bancorp of NY 17.83 17.83 0.94 4.70 5.30 0.91 4.56 0.18 318.32 1.45
THBC Troy Hill Bancorp of PA 22.20 22.20 1.40 6.20 7.85 1.27 5.65 2.95 30.03 1.09
TWIN Twin City Bancorp of TN 13.76 13.76 1.07 7.77 7.56 0.93 6.74 0.46 39.79 0.26
UFRM United FS&LA of Rocky Mount NC 8.28 8.28 0.87 11.37 9.13 0.77 9.97 0.66 178.39 1.90
UBMT United SB, FA of MT 23.53 23.53 1.50 6.68 7.23 1.49 6.63 NA NA 0.25
VABF Va. Beach Fed. Fin. Corp of VA 6.57 6.57 0.23 3.94 4.34 0.01 0.12 1.76 36.50 0.93
VAFD Valley FSB of Sheffield AL(8) 8.09 8.09 0.32 4.06 3.41 0.31 3.95 0.79 42.34 0.43
VFFC Virginia First Savings of VA 7.72 7.44 1.19 16.32 11.61 0.98 13.45 2.89 31.46 1.01
WBCI WFS Bancorp of Wichita KS(8) 11.41 11.40 0.47 4.13 3.76 0.51 4.51 NA NA 0.72
WHGB WHG Bancshares of MD 20.59 20.59 0.64 5.18 3.27 0.64 5.18 0.35 42.31 0.23
WSFS WSFS Financial Corp. of DE* 5.87 5.79 2.17 42.73 25.47 1.29 25.28 3.27 59.85 3.01
WVFC WVS Financial Corp. of PA* 15.12 15.12 1.23 8.09 7.86 1.38 9.04 0.45 178.29 1.35
WLDN Walden Bancorp of MA* 9.37 8.02 0.96 10.85 8.43 1.07 12.02 0.75 158.52 1.89
WRNB Warren Bancorp of Peabody MA* 8.95 8.95 1.64 19.67 12.48 1.56 18.79 2.05 62.35 2.12
WFSL Washington FS&LA of Seattle WA 12.13 11.54 1.75 13.70 8.74 1.67 13.12 0.60 41.03 0.35
WAMU Washington Mutual Inc. of WA* 6.23 5.54 0.91 15.07 8.85 0.90 15.01 0.51 125.59 1.04
WAYN Wayne S&L Co., MHC of OH(46.7) 9.20 9.20 0.58 6.36 4.58 0.54 5.96 1.35 26.40 0.43
WCFB Webster CityFSB,MHC of IA(45.2 22.28 22.28 1.10 5.00 3.78 1.10 5.00 1.08 37.62 0.74
WBST Webster Financial Corp. of CT 5.16 3.92 0.51 10.33 6.96 0.55 11.05 1.44 89.48 1.86
WEFC Wells Fin. Corp. of Wells MN 14.95 14.95 0.81 6.24 6.26 0.79 6.07 0.39 70.55 0.32
WCBI WestCo Bancorp of IL 15.65 15.65 1.32 8.47 6.94 1.31 8.41 0.58 49.47 0.41
WSTR WesterFed Fin. Corp. of MT 13.28 13.28 0.76 5.73 6.89 0.72 5.38 0.07 468.93 0.55
WOFC Western Ohio Fin. Corp. of OH 18.20 17.14 1.10 4.22 4.73 0.83 3.18 0.34 78.86 0.44
WFCO Winton Financial Corp. of OH(8) 7.89 7.68 0.93 12.26 7.70 0.76 10.02 0.53 64.84 0.41
FFWD Wood Bancorp of OH 14.59 14.59 1.17 8.14 8.43 1.14 7.88 0.18 192.22 0.46
WCHI Workingmens Cap. Hldgs of IN(8) 12.24 12.24 0.91 7.59 5.35 0.90 7.45 0.23 72.95 0.19
YFCB Yonkers Fin. Corp. of NY 19.39 19.39 0.89 4.59 6.40 0.98 5.05 1.63 26.77 1.09
YFED York Financial Corp. of PA 8.78 8.78 0.98 11.40 9.78 0.85 9.95 2.24 26.68 0.68
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------ -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
PTRS The Potters S&L Co. of OH 14.13 78.16 7.61 78.16 14.38 0.24 1.48 20.87
THIR Third Financial Corp. of OH(8) 16.86 128.15 23.25 128.15 18.86 0.68 2.13 35.98
TSBS Trenton SB, FSB MHC of NJ(35.0 13.57 128.61 24.48 131.58 20.36 0.35 2.46 33.33
TRIC Tri-County Bancorp of WY 18.88 89.16 15.90 89.16 19.47 0.50 2.70 51.02
THBC Troy Hill Bancorp of PA 12.75 77.70 17.25 77.70 13.98 0.40 3.08 39.22
TWIN Twin City Bancorp of TN 13.22 101.91 14.03 101.91 15.24 0.64 4.00 52.89
UFRM United FS&LA of Rocky Mount NC 10.96 117.47 9.72 117.47 12.50 0.20 2.50 27.40
UBMT United SB, FA of MT 13.83 90.71 21.34 90.71 13.93 0.88 4.82 66.67
VABF Va. Beach Fed. Fin. Corp of VA 23.03 89.01 5.85 89.01 NM 0.16 2.17 50.00
VAFD Valley FSB of Sheffield AL(8) NM 122.42 9.90 122.42 NM 0.60 1.88 55.05
VFFC Virginia First Savings of VA 8.61 129.84 10.03 134.78 10.45 0.10 0.78 6.76
WBCI WFS Bancorp of Wichita KS(8) NM 107.12 12.22 107.17 24.33 0.40 1.75 46.51
WHGB WHG Bancshares of MD NM 77.46 15.95 77.46 NM 0.00 0.00 0.00
WSFS WSFS Financial Corp. of DE* 3.93 143.95 8.44 145.91 6.64 0.00 0.00 0.00
WVFC WVS Financial Corp. of PA* 12.73 99.14 14.99 99.14 11.40 0.40 1.93 24.54
WLDN Walden Bancorp of MA* 11.87 104.28 9.77 121.91 10.71 0.64 3.41 40.51
WRNB Warren Bancorp of Peabody MA* 8.01 146.37 13.10 146.37 8.39 0.44 3.52 28.21
WFSL Washington FS&LA of Seattle WA 11.44 153.13 18.58 160.93 11.94 0.88 4.09 46.81
WAMU Washington Mutual Inc. of WA* 11.31 153.23 9.55 172.31 11.35 0.88 2.97 33.59
WAYN Wayne S&L Co., MHC of OH(46.7) 21.84 135.44 12.46 135.44 23.31 0.84 4.05 NM
WCFB Webster CityFSB,MHC of IA(45.2 NM 130.81 29.15 130.81 NM 0.80 5.93 NM
WBST Webster Financial Corp. of CT 14.38 118.46 6.11 155.83 13.43 0.64 2.23 32.00
WEFC Wells Fin. Corp. of Wells MN 15.97 85.82 12.83 85.82 16.43 0.00 0.00 0.00
WCBI WestCo Bancorp of IL 14.41 119.65 18.72 119.65 14.51 0.45 2.08 30.00
WSTR WesterFed Fin. Corp. of MT 14.52 80.87 10.74 80.87 15.45 0.34 2.37 34.34
WOFC Western Ohio Fin. Corp. of OH 21.14 92.30 16.80 98.02 NM 1.00 4.30 NM
WFCO Winton Financial Corp. of OH(8) 12.98 129.56 10.22 133.14 15.88 0.42 3.11 40.38
FFWD Wood Bancorp of OH 11.86 93.81 13.69 93.81 12.25 0.36 1.95 23.08
WCHI Workingmens Cap. Hldgs of IN(8) 18.69 137.46 16.83 137.46 19.05 0.36 1.80 33.64
YFCB Yonkers Fin. Corp. of NY 15.63 71.77 13.92 71.77 14.21 0.00 0.00 0.00
YFED York Financial Corp. of PA 10.22 110.84 9.73 110.84 11.72 0.60 3.56 36.36
</TABLE>
<PAGE>
EXHIBIT IV-2
Historical Stock Price Indices
<PAGE>
Historical Stock Price Indices(1)
<TABLE>
<CAPTION>
SNL SNL
NASDAQ Thrift Bank
Year/Qtr. Ended DJIA S&P 500 Composite Index Index
--------------- ---- ------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
1991: Quarter 1 2881.1 375.2 482.3 125.5 66.0
Quarter 2 2957.7 371.2 475.9 130.5 82.0
Quarter 3 3018.2 387.9 526.9 141.8 90.7
Quarter 4 3168.0 417.1 586.3 144.7 103.1
1992: Quarter 1 3235.5 403.7 603.8 157.0 113.3
Quarter 2 3318.5 408.1 563.6 173.3 119.7
Quarter 3 3271.7 417.8 583.3 167.0 117.1
Quarter 4 3301.1 435.7 677.0 201.1 136.7
1993: Quarter 1 3435.1 451.7 690.1 228.2 151.4
Quarter 2 3516.1 450.5 704.0 219.8 147.0
Quarter 3 3555.1 458.9 762.8 258.4 154.3
Quarter 4 3754.1 466.5 776.8 252.5 146.2
1994: Quarter 1 3625.1 445.8 743.5 241.6 143.1
Quarter 2 3625.0 444.3 706.0 269.6 152.6
Quarter 3 3843.2 462.6 764.3 279.7 149.2
Quarter 4 3834.4 459.3 752.0 244.7 137.6
1995: Quarter 1 4157.7 500.7 817.2 278.4 152.1
Quarter 2 4556.1 544.8 933.5 313.5 171.7
Quarter 3 4789.1 584.4 1,043.5 362.3 195.3
Quarter 4 5117.1 615.9 1,052.1 376.5 207.6
1996: Quarter 1 5587.1 645.5 1,101.4 382.1 225.1
As of June 7, 1996 5697.1 673.3 1,229.8 385.1 228.8
</TABLE>
(1) End of period data.
Source: SNL Securities; Wall Street Journal.
<PAGE>
EXHIBIT IV-3
Historical Thrift Stock Indices
<PAGE>
MONTHLY MARKET REPORT
INDEX VALUES
<TABLE>
<CAPTION>
INDEX VALUES PERCENT CHANGE SINCE
----------------------------------------- -----------------------------------
05/31/96 04/30/96 12/29/95 06/01/95 04/30/96 12/29/95 06/01/95
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
All Pub. Traded Thrifts 383.0 380.3 376.5 309.5 0.7 1.7 23.7
MHC Index 429.2 459.0 485.5 349.5 -6.5 -6.4 22.8
INSURANCE INDICES
- -------------------------------------------------------------------------------------------------------------
SAIF Thrifts 358.8 356.1 356.4 293.6 0.7 0.7 22.2
BIF Thrifts 455.6 452.6 436.9 357.2 0.6 4.3 27.5
STOCK EXCHANGE INDICES
- -------------------------------------------------------------------------------------------------------------
AMEX Thrifts 135.1 134.1 137.7 121.9 0.7 -1.8 10.8
NYSE Thrifts 256.2 249.9 257.6 212.6 2.5 -0.6 20.5
OTC Thrifts 459.9 460.3 449.5 368.8 -0.1 2.3 24.7
GEOGRAPHICAL INDICES
- -------------------------------------------------------------------------------------------------------------
New England Thrifts 321.6 320.2 316.1 255.7 0.4 1.7 25.7
Mid-Atlantic Thrifts 746.6 745.4 720.1 596.6 0.2 3.7 25.1
Southwest Thrifts 262.5 253.4 241.7 193.0 3.6 8.6 36.0
Midwest Thrifts 967.3 981.7 951.5 775.3 -1.5 1.7 24.8
Southeast Thrifts 385.2 381.8 367.2 300.1 0.9 4.9 28.4
Western Thrifts 375.7 363.8 380.4 315.6 3.3 -1.2 19.0
ASSET SIZE INDICES
- -------------------------------------------------------------------------------------------------------------
Less than $250M 545.4 545.4 538.4 454.5 0.0 1.3 20.0
$250M to $500M 687.7 690.9 680.3 570.0 -0.5 1.1 20.6
$500M to $1B 436.1 430.0 431.4 357.1 1.4 1.1 22.1
$1B to $5B 431.6 431.3 421.7 341.9 0.1 2.4 26.2
Over $5B 236.8 231.7 233.5 192.5 2.2 1.4 23.0
COMPARATIVE INDICES
- -------------------------------------------------------------------------------------------------------------
Dow Jones industrials 5643.2 5569.1 5117.1 4473.4 1.3 10.3 26.1
S&P 500 669.1 654.2 615.9 533.5 2.3 8.6 25.4
</TABLE>
All SNL indices are market-value weighted; i.e., an institution's effect on an
is proportionate to that institution's market capitalization. All SNL thrift
indices, except for the SNL MHC index, began at 100 on March 30, 1984. The SNL
MHC index began at 201,082 on Dec 31. 1992 the level of the SNL Thrift index on
that date on March 30. 1984 the S&P 500 closed at 159.2 and the Dow Jones
industries stood at 1164.9.
New England: CT, ME, MA, NH, RI, VT; Middle Atlantic: DE, DC, PA, MD, NJ
NY, PR; Southeast: AL, AR, FL, GA, MS, NC, SC, TN, VA, WV, WV; Midwest:
IA, IL, IN, KS, KY, MI, MN, MO, ND, NE, OH, SD, WI; Southeast: CO, LA, NM,
OK, TX, UT;Western: AZ, AK, CA, HI, ID, MT, NV, OR, WA, WY.
SOURCE: SNL SECURITIES
JUNE 1996
<PAGE>
EXHIBIT IV-4
Regional Acquisition Activity
<PAGE>
RP Financial, LC.
----------------------------------------------------------------------
EXHIBIT IV - 4
COMPLETED AND PENDING ACQUISITIONS OF MISSOURI THRIFTS, 1995-PRESENT
----------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS TARGET COMPANY'S FINANCIAL DATA
AT COMPLETION DATE
- ------------------------------------------------------------------------------------------------------------------------------------
DATE ANNOUNCED/ TARGET/STATE POOLING/ EQUITY/ T.T. T.T. NPAs(1) RESERVES
COMPLETED ACQUIROR/STATE PURCHASE ASSETS ASSETS ROAA ROAE ASSESTS NPAs
--------- -------------- -------- ------ ------ ---- ---- ------- ----
($000) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/09/96 Mutual Bancompany Pooling $54,913 11.31% 0.22% 2.16% 0.21% 159.32%
Pending Roosevelt Financial Group/MO
03/22/96 Sentinel Fin. Corp., Kansas City Pooling $161,879 6.35% 0.40% 6.59% 0.01% NM
Pending Roosevelt Fin. Group/MO
06/09/95 St. Francois Fin. Corp. Purchase $39,751 18.53% 0.75% 4.16% 0.31% 179.72%
Pending New Era Bancorp/MO
06/16/95 Kirksville Bancshares, Kirksville Pooling $136,205 15.25% 0.99% 6.46% 0.08% 1052.83%
12/29/95 Roosevelt Financial Group/MO
04/13/95 WSB Bancorp Purchase $95,676 18.98% 0.80% 4.33% 0.06% 514.75%
10/23/95 Roosevelt Financial Group/MO
07/13/94 UNSL Financial Corp. Pooling $488,416 8.03% 0.90% 10.62% 1.47% 51.02%
01/06/95 Mercantile Bancorp/MO
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Acquisition Terms Control Premium Acquisition Pricing
At Completion Date
- --------------------------------------------------------------------------------------------------------------------
Offer
Price/
Total Offer Cash One Day
DATE ANNOUNCED/ Deal Price/ Debt Pre-Offer
COMPLETED Value Share Stock Price P/B P/TB P/A P/E
--------- ----- ------- ----- ----- --- ---- --- ---
(SMII) ($) (x) (%) (%) (%) (%)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/09/96 $7.7 $23.00 Stock 1.97 124% 124% 14.00% NM
Pending
03/22/96 $13.5 $26.33 Stock NOT TRADED 117% 117% 8.90% 19.70
Pending
06/09/95 $10.8 $24.00 Cash NOT TRADED 127% 127% 28.70% NM
Pending
06/16/95 $28.5 $40.13 Stock NOT TRADED 137% 137% 20.92% 21.16
12/29/95
04/13/95 $26.2 $22.75 Cash 1.08 128% 128% 27.38% 31.20
10/23/95
07/13/94 $61.2 $37.51 Stock 1.13 150% 150% 12.53% 14.46
01/06/95
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) NPAs consist of REO, non-accruing loans, and loans 90+
days delinquent. JUNE 7, 1996
Source: SNL Securities; American Banker.
<PAGE>
EXHIBIT IV-7
Pro Forma Analysis Sheet
<PAGE>
RP Financial, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-7
PRO FORMA ANALYSIS SHEET -- PAGE 1
Community Bank of MO
Prices as of June 14, 1996
<TABLE>
<CAPTION>
Comparable All MO All SAIF
Companies Companies Companies
------------- ------------- -------------
Price Multiple: Symbol Subject(1) Mean Median Mean Median Mean Median
- -------------- ------ ---------- ----- ------ ----- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Price-earnings ratio = P/E 14.86x 15.63x 15.06x 16.15x 16.62x 14.29x 14.29x
Price-core earnings = P/CORE 19.53x 16.00x 15.13x 16.26x 16.39x 15.14x 15.42x
Price-book ratio = P/B 63.26x 89.51% 88.37% 105.46% 88.50% 104.98% 99.35%
Price-tng book ratio = P/TB 63.26x 89.53% 88.37% 108.77% 88.50% 108.21% 102.42%
Price-assets ratio = P/A 11.07x 15.20% 15.03% 15.94% 15.70% 13.13% 11.84%
Valuation Parameters
- --------------------
Pre-Conv Earnings (Y) $ 526,000 Est ESOP Borrowings (E) $ 840,000
Pre-Conv Book Value (B) $ 7,883,000 Cost of ESOP Borrowings (S) 0.00% (4)
Pre-Conv Assets (A) $ 86,168,000 Amort of ESOP Borrowings (T) 10 Years
Reinvestment Rate(2) (R) 3.23% MRP Amount (M) $ 420,000
Est Conversion Exp(3) (X) 525,000 MRP Expense (N) $ 84,000
Proceeds Not Reinvested (Z) $
1,260,000
</TABLE>
Calculation of Pro Forma Value After Conversion
- -----------------------------------------------
1. V = P/E (Y-R(X+Z)-ES-(1-TAX)E/T-(1-TAX)N)) V = $ 10,497,867
-------------------------------------------------
1-(P/E)R
2. V = P/B (B-X-E-M) V = $10,499,714
---------------------------
1-P/B
3. V = P/A (A-X-M-E) V = $ 10,503,990
---------------------------
1-P/A
<TABLE>
<CAPTION>
Total Price Total
Conclusion Shares Per Share Value
- ---------- ------ --------- --------
<S> <C> <C> <C>
Appraised Value 1,050,000 $10.00 $ 10,500,000
RANGE:
- -----
- - Minimum 892,500 $10.00 $ 8,925,000
- - Maximum 1,207,500 $10.00 $ 12,075,000
- - Superrange 1,388,625 $10.00 $ 13,886,250
</TABLE>
(1) Pricing ratios shown reflect the midpoint appraised value.
(2) Net return assumes a reinvestment rate of 5.38 percent, and a tax rate of
40.00 percent.
(3) Conversion expenses reflect estimated expenses as presented in offering
document.
(4) Assumes a borrowings cost of 0.00 percent and a tax rate of 40.00 percent.
<PAGE>
RP Financial, Inc.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-7
PRO FORMA ANALYSIS SHEET -- PAGE 2
Community Bank of MO
Prices as of June 14, 1996
<TABLE>
<CAPTION>
Mean Pricing Median Pricing
----------------- -----------------
Valuation Approach Subject Peers (Disc) Peers (Disc)
- ------------------ ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
P/E Price-earnings 14.86x 15.63x -4.92% 15.06x -1.31%
P/CORE Price-core earnings 19.53x 16.00x 22.11% 15.13x 29.14%
P/B Price-book 63.26% 89.51% -29.32% 88.37% -28.42%
P/TB Price-tang. book 63.26% 89.53% -29.34% 88.37% -28.42%
P/A Price-assets 11.07% 15.20% -27.21% 15.03% -26.38%
Average Premium (Discount) -13.73% -11.08%
</TABLE>
<PAGE>
EXHIBIT IV-8
Pro Forma Effect of Conversion Proceeds
<PAGE>
RP Financial, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Community Bank of MO
At the Minimum of the Range
<TABLE>
<S> <C>
1. Conversion Proceeds
Pro-forma market value ------------------------------ $ 8,925,000
Less: Estimated offering expenses --------------- 525,000
-----------
Net Conversion Proceeds ----------------------------- $ 8,400,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ----------------------------- $ 8,400,000
Less: Held in Non-Earning Assets(5)(1) ---------- 1,071,000
-----------
Net Proceeds Reinvested ----------------------------- $ 7,329,000
Estimated net incremental rate of return ------------ 3.23 %
-----------
Earnings Increase ----------------------------------- $ 236,580
Less: Estimated cost of ESOP borrowings(1) ------ 0
Less: Amortization of ESOP borrowings(2) -------- 42,840
Less: MRP Expense(4)----------------------------- 42,840
-----------
Net Earnings Increase ------------------------------- $ 150,900
</TABLE>
<TABLE>
<S> <C> <C>
3. Pro-Forma Earnings (rounded)
Period Before Conversion After Conversion
------ ----------------- ----------------
12 Months ended March 31, 1996 $ 526,000 $ 676,900
12 Months ended March 31, 1996 (Core) $ 357,000 $ 507,900
</TABLE>
<TABLE>
<S> <C> <C> <C>
4. Pro-Forma Net Worth (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
March 31, 1996 $ 7,883,000 $ 7,329,000 (3)(4) $ 15,212,000
5. Pro-Forma Net Assets (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
March 31, 1996 $ 86,168,000 $ 7,329,000 $ 93,497,000
<S>
</TABLE>
NOTE: Shares for calculating per share amounts: 892,500
(1) Estimated ESOP borrowings of $ 714,000 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 40.00
percent. ESOP financed by holding company - excluded from reinvestment and
total assets.
(2) ESOP borrowings are amortized over 10 years, amortization is tax-effected.
(3) ESOP borrowings of $ 714,000 are omitted from net worth.
(4) $ 357,000 purchased by the MRP with an estimated pre-tax expense of $ 71,400
and a tax rate of 40.00 percent.
(5) Stock purchased by MRP does not generate reinvestment income.
<PAGE>
RP Financial, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Community Bank of MO
At the Midpoint of the Range
<TABLE>
<S> <C>
1. Conversion Proceeds
Pro-forma market value .............................. $ 10,500,000
Less: Estimated offering expenses ............... 525,000
-----------
Net Conversion Proceeds ............................. $ 9,975,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ............................. $ 9,975,000
Less: Held in Non-Earning Assets(5)(1) .......... 1,260,000
-----------
Net Proceeds Reinvested ............................. $ 8,715,000
Estimated net incremental rate of return ............ 3.23 %
-----------
Earnings Increase ................................... $ 281,320
Less: Estimated cost of ESOP borrowings(1) ...... 0
Less: Amortization of ESOP borrowings(2) ........ 50,400
Less: MRP Expense(4) ............................ 50,400
-----------
Net Earnings Increase ............................... $ 180,520
</TABLE>
3. Pro-Forma Earnings (rounded)
<TABLE>
Period Before Conversion After Conversion
------ ----------------- ----------------
<S> <C> <C>
12 Months ended March 31, 1996 $ 526,000 $ 706,520
12 Months ended March 31, 1996 (Core) $ 357,000 $ 537,520
</TABLE>
4. Pro-Forma Net Worth (rounded)
<TABLE>
<CAPTION>
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
<S> <C> <C> <C>
March 31, 1996 $ 7,883,000 $ 8,715,000 (3)(4) $ 16,598,000
5. Pro-Forma Net Assets (rounded)
<CAPTION>
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
<S> <C> <C> <C>
March 31, 1996 $ 86,168,000 $ 8,715,000 $ 94,883,000
</TABLE>
NOTE: Shares for calculating per share amounts: 1,050,000
(1) Estimated ESOP borrowings of $ 840,000 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 40.00
percent. ESOP financed by holding company - excluded from reinvestment and
total assets.
(2) ESOP borrowings are amortized over 10 years, amortization is tax-effected.
(3) ESOP borrowings of $ 840,000 are omitted from net worth.
(4) $ 420,000 purchased by the MRP with an estimated pre-tax expense of $ 84,000
and a tax rate of 40.00 percent.
(5) Stock purchased by MRP does not generate reinvestment income.
<PAGE>
RP Financial, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Community Bank of MO
At the Maximum of the Range
<TABLE>
<S> <C>
1. Conversion Proceeds
Pro-forma market value .............................. $ 12,075,000
Less: Estimated offering expenses ............... 525,000
-----------
Net Conversion Proceeds ............................. $ 11,550,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ............................. $ 11,550,000
Less: Held in Non-Earning Assets(5)(1) .......... 1,449,000
-----------
Net Proceeds Reinvested ............................. $ 10,101,000
Estimated net incremental rate of return ............ 3.23 %
-----------
Earnings Increase ................................... $ 326,060
Less: Estimated cost of ESOP borrowings(1) ...... 0
Less: Amortization of ESOP borrowings(2) ........ 57,960
Less: MRP Expense(4) ............................ 57,960
-----------
Net Earnings Increase ............................... $ 210,140
</TABLE>
3. Pro-Forma Earnings (rounded)
<TABLE>
Period Before Conversion After Conversion
------ ----------------- ----------------
<S> <C> <C>
12 Months ended March 31, 1996 $ 526,000 $ 736,140
12 Months ended March 31, 1996 (Core) $ 357,000 $ 567,140
</TABLE>
4. Pro-Forma Net Worth (rounded)
<TABLE>
<CAPTION>
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
<S> <C> <C> <C>
March 31, 1996 $ 7,883,000 $ 10,101,000 (3)(4) $ 17,984,000
5. Pro-Forma Net Assets (rounded)
<CAPTION>
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
<S> <C> <C> <C>
March 31, 1996 $ 86,168,000 $ 10,101,000 $ 96,269,000
</TABLE>
NOTE: Shares for calculating per share amounts: 1,207,500
(1) Estimated ESOP borrowings of $ 966,000 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 40.00
percent. ESOP financed by holding company - excluded from reinvestment and
total assets.
(2) ESOP borrowings are amortized over 10 years, amortization is tax-effected.
(3) ESOP borrowings of $ 966,000 are omitted from net worth.
(4) $ 483,000 purchased by the MRP with an estimated pre-tax expense of $ 96,600
and a tax rate of 40.00 percent.
(5) Stock purchased by MRP does not generate reinvestment income.
<PAGE>
RP Financial, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-8
PRO FORMA EFFECT OF CONVERSION PROCEEDS
Community Bank of MO
At the Superrange Maximum
<TABLE>
<S> <C>
1. Conversion Proceeds
Pro-forma market value .............................. $ 13,886,250
Less: Estimated offering expenses ............... 525,000
-----------
Net Conversion Proceeds ............................. $ 13,361,250
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ............................. $ 13,361,250
Less: Held in Non-Earning Assets(5)(1) .......... 1,666,350
-----------
Net Proceeds Reinvested ............................. $ 11,694,900
Estimated net incremental rate of return ............ 3.23 %
-----------
Earnings Increase ................................... $ 377,511
Less: Estimated cost of ESOP borrowings(1) ...... 0
Less: Amortization of ESOP borrowings(2) ........ 66,654
Less: MRP Expense(4)............................. 66,654
-----------
Net Earnings Increase ............................... $ 244,203
</TABLE>
3. Pro-Forma Earnings (rounded)
<TABLE>
Period Before Conversion After Conversion
------ ----------------- ----------------
<S> <C> <C>
12 Months ended March 31, 1996 $ 526,000 $ 770,203
12 Months ended March 31, 1996 (Core) $ 357,000 $ 601,203
</TABLE>
4. Pro-Forma Net Worth (rounded)
<TABLE>
<CAPTION>
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
<S> <C> <C> <C>
March 31, 1996 $ 7,883,000 $ 11,694,900 (3)(4) $ 19,577,900
5. Pro-Forma Net Assets (rounded)
<CAPTION>
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
<S> <C> <C> <C>
March 31, 1996 $ 86,168,000 $ 11,694,900 $ 97,862,900
</TABLE>
NOTE: Shares for calculating per share amounts: 1,388,625
(1) Estimated ESOP borrowings of $ 1,110,900 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 40.00
percent. ESOP financed by holding company - excluded from reinvestment and
total assets.
(2) ESOP borrowings are amortized over 10 years, amortization is tax-effected.
(3) ESOP borrowings of $ 1,110,900 are omitted from net worth.
(4) $ 555,450 purchased by the MRP with an estimated pre-tax expense of
$ 111,090 and a tax rate of 40.00 percent.
(5) Stock purchased by MRP does not generate reinvestment income.
<PAGE>
EXHIBIT IV-9
Peer Group Core Earnings Analysis
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Core Earnings Analysis
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1996
Estimated
Net Income Less: Net Tax Effect Less: Extd Core Income Estimated
to Common Gains(Loss) @ 34% Items to Common Shares Core EPS
---------- ----------- ---------- ---------- ---------- ---------- -------
($000) ($000) $000) ($000) ($000) ($000) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Comparable Group
- ----------------
CMRN Cameron Fin. Corp. of MO 2,761 -55 19 0 2,725 2,850 0.96
CAPS Capital Savings Bancorp of MO 1,820 0 0 0 1,820 1,039 1.75
FBSI First Bancshares of MO 1,042 -26 9 0 1,025 1,302 0.79
FFSL First Independence Corp. of KS 1,138 0 0 0 1,138 583 1.95
GFSB GFS Bancorp of Grinnell IA 811 -28 10 0 793 515 1.54
NSLB NS&L Bancorp of Neosho MO 527 -55 19 0 491 888 0.55
PCBC Perry Co. Fin. Corp. of MO(1) 756 0 0 0 756 856 0.88
SMFC Sho-Me Fin. Corp. of MO 1,966 -30 10 0 1,946 1,821 1.07
SMBC Southern Missouri Bncrp of MO 1,337 -126 43 0 1,254 1,724 0.73
SFFC StateFed Financial Corp. of IA 847 0 0 0 847 823 1.03
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
Source: Audited and unaudited financial statements, corporate reports and
offering circulars, and RP Financial, Inc. calculations. The information
provided in this table has been obtained from sources we believe are
reliable, but we cannot guarantee the accuracy or completeness of such
information.
Copyright (c) 1995 by RP Financial, LC.
<PAGE>
EXHIBIT V-1
RP Financial, LC.
Firm Qualifications Statement
<PAGE>
FIRM QUALIFICATION
STATEMENT
RP Financial provides financial and management consulting and valuation services
to the financial services industry nationwide, with special emphasis on
federally-insured financial institutions. RP Financial establishes long-term
client relationships through its wide array of services, emphasis on quality and
timeliness, hands-on involvement by our principals and senior consulting staff,
and careful structuring of strategic plans and transactions. RP Financial's
staff draws from backgrounds in financial institution consulting, regulatory
agencies and investment banking, thereby providing our clients with considerable
resources.
STRATEGIC AND CAPITAL PLANNING
RP Financial's strategic and capital planning services are designed to provide
effective workable plans with quantifiable results. Through a program referred
to as SAFE, Strategic Alternatives Financial Evaluations, RP Financial analyzes
strategic actions which will enhance shareholder value or otherwise achieve
desired results. Our planning services involve conducting situation analyses
and establishing mission statements, strategic goals and objectives, with
overall emphasis on enhancement of franchise value, capital management and
planning, earnings improvement and operational issues. Our planning services
include the development of strategies in the following areas: capital formation
and management, interest rate risk management, development of investment and
liquidity portfolio targets, development of loan and servicing portfolio targets
and development of funding composition targets. Our proprietary financial
simulation model provides the basis for evaluating the financial impact of
alternative strategies as well as assessing the feasibility and compatibility of
such strategies with regulations and accounting guidelines.
MERGER AND ACQUISITION SERVICES
RP Financial's merger and acquisition (M&A) services include targeting
candidates and potential acquirors, assessing acquisition merit, conducting
detailed due diligence, negotiating and structuring transactions, preparing
merger business plans and financial simulations, rendering fairness opinions and
assisting in implementing post-acquisition strategies. Through our financial
simulations, in-house data bases of public and non-public banks and savings
institutions, valuation expertise and regulatory and accounting knowledge, RP
Financial's M&A consulting focuses on structuring transactions to enhance
shareholder returns.
VALUATION SERVICES
RP Financial's extensive valuation practice includes valuations for a variety of
purposes including mergers and acquisitions, mutual-to-stock conversions, ESOPs,
subsidiary and related industry companies, mark-to-market transactions, loan and
servicing portfolios, non-traded securities, deposit portfolios and core
deposits. Our principals and staff are highly experienced in performing
valuation appraisals which conform with regulatory guidelines and appraisal
industry standards. RP Financial is the nation's leading valuation firm for
mutual-to-stock conversions of thrift institutions.
OTHER CONSULTING SERVICES AND DATA BASES
RP Financial offers a variety of other services including branching strategies,
feasibility studies and special research studies, which are complemented by our
quantitative and computer skills. RP Financial's consulting services are aided
by its in-house data base resources for commercial banks and savings
institutions and proprietary valuation and financial simulation models.
RP Financial's Key Personnel (Years of Relevant Experience)
Ronald S. Riggins, Managing Director (16)
William E. Pommerening, Managing Director (11)
Gregory E. Dunn, Senior Vice President (15)
James P. Hennessey, Senior Vice President (10)
James J. Oren, Vice President (8)
Timothy M. Biddle, Vice President (7)
Alan P. Carruthers, Senior Consultant-Community Banking (14)
<PAGE>
Exhibit 99.3
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
1001 North Jesse James Road
Excelsior Springs, Missouri 64024
(816) 630-6711
____________________________________
NOTICE OF SPECIAL MEETING OF MEMBERS
____________________________________
Notice is hereby given that a Special Meeting of Members (the "Special
Meeting") of Community Bank of Excelsior Springs, A Savings Bank (the "Bank"),
will be held at the main office of the Bank located at 1001 North Jesse James
Road, Excelsior Springs, Missouri, on September ___, 1996 at 4:30 p.m.,
Excelsior Springs, Missouri time. The purpose of this Special Meeting is to
consider and vote upon:
A plan to convert the Bank from a federally chartered mutual savings bank
to a federally chartered stock savings bank, including the adoption of a
federal stock savings bank charter and bylaws, with the concurrent sale
of all the Bank's common stock to CBES Bancorp, Inc., a Delaware
corporation (the "Holding Company"), and sale by the Holding Company of
shares of its common stock; and
such other business as may properly come before this Special Meeting or any
adjournment thereof. Management is not aware of any such other business.
The members who shall be entitled to notice of and to vote at the
Special Meeting and any adjournment thereof are depositors and certain borrowers
of the Bank at the close of business on _______, 1996 who continue to be members
as of the date of the Special Meeting. In the event there are not sufficient
votes for approval of the Plan of Conversion at the time of the Special Meeting,
the Special Meeting may be adjourned from time to time in order to permit
further solicitation of proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Robert E. McCrorey
Chairman of the Board
Excelsior Springs, Missouri
August ___, 1996
________________________________________________________________________________
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR APPROVAL OF THE PLAN OF CONVERSION BY COMPLETING THE
ENCLOSED PROXY CARD AND RETURNING IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
YOUR VOTE IS VERY IMPORTANT.
________________________________________________________________________________
<PAGE>
SUMMARY OF PROPOSED CONVERSION
This summary does not purport to be complete and is qualified in its
entirety by the more detailed information contained in the remainder of this
Proxy Statement and the accompanying Prospectus.
Under its present "mutual" form of organization, the Bank has no
stockholders. Its deposit account holders and certain borrowers are members of
the Bank and have voting rights in that capacity. In the unlikely event of
liquidation, the Bank's deposit account holders would have the sole right to
receive any assets of the Bank remaining after payment of its liabilities
(including the claims of all deposit account holders to the withdrawal value of
their deposits). Under the Plan of Conversion (the "Plan of Conversion") to be
voted on at the Special Meeting, the Bank would be converted into a federally
chartered savings bank organized in stock form, and all of the Bank's common
stock would be sold concurrently to the Holding Company (the "Conversion"). The
Holding Company will offer and sell its common stock (the "Common Stock") in an
offering (1) to depositors with an account balance of $50 or more on March 31,
1995 ("Eligible Account Holders"), (2) tax-qualified employee stock benefit
plans of the Bank ("Tax-Qualified Employee Plans"), (3) depositors of the Bank
with an account balance of $50 or more as of June 30, 1996 ("Supplemental
Eligible Account Holders"), (4) depositors of the Bank as of _______, 1996,
other then Eligible or Supplemental Eligible Account Holders and certain
borrowers as of both ________, 1995 and _______, 1996, who continue to be
borrowers as of the date of this Special Meeting ("Other Members") and (5)
directors, officers and employees of the Bank (the "Subscription Offering").
Notwithstanding the foregoing, to the extent orders for shares exceed the
maximum of the appraisal range, Tax-Qualified Employee Plans shall be afforded a
first priority to purchase shares sold above the maximum of the appraisal range.
It is anticipated that Tax-Qualified Employee Plans will purchase 8% of the
Common Stock sold in the Conversion.
Concurrent with or following completion of the Subscription Offering, to
the extent the Common Stock is not all sold to the persons in the foregoing
categories, the Holding Company may offer Common Stock to members of the general
public to whom a prospectus (the "Prospectus") has been delivered ("Other
Subscribers"), with first preference to natural persons residing in Ray and Clay
Counties, Missouri ("the Community Offering"). The Subscription Offering and
the Community Offering are referred to collectively as the "Subscription and
Community Offering." Voting and liquidation rights with respect to the Bank
would thereafter be held by the Holding Company, except to the limited extent of
the liquidation account (the "Liquidation Account") that will be established for
the benefit of Eligible Account Holders and Supplemental Eligible Account
Holders of the Bank and voting and liquidation rights in the Holding Company
would be held only by those persons who become stockholders of the Holding
Company through purchase of shares of its Common Stock. See "Description of the
Plan of Conversion - Principal Effects of Conversion - Liquidation Rights of
Depositor Members."
THE CONVERSION WILL NOT AFFECT THE BALANCE, INTEREST RATE OR FEDERAL
INSURANCE PROTECTION OF ANY SAVINGS DEPOSIT, AND NO PERSON WILL BE OBLIGATED TO
PURCHASE ANY STOCK IN THE CONVERSION.
Business Purposes Net Conversion proceeds are expected to increase the
for Conversion capital of the Bank, which will support the expansion of
its financial services to the public. The conversion to
stock form and the use of a holding company structure are
also expected to enhance its ability to expand through
possible mergers and acquisitions (although no such
transactions are contemplated at this time) and will
facilitate its future access to the capital markets. The
Bank will continue to be subject to comprehensive
regulation and examination by the Office of Thrift
Supervision, Department of Treasury ("OTS") and the
Federal Deposit Insurance Corporation ("FDIC").
Subscription and As part of the Conversion, Common Stock is being offered
Community Offering for sale in the Subscription Offering, in the priorities
summarized below, to the Bank's (1) Eligible Account
Holders, (2) Tax-Qualified Employee Plans, (3)
Supplemental Eligible Account Holders (4) Other Members,
and (5) employees, officers and directors. In addition, in
the Community Offering, Other Subscribers may purchase
Common Stock to the extent shares are available after
satisfaction of subscriptions in the Subscription
Offering, with a preference first to natural persons
residing in Ray and Clay Counties, Missouri.
i
<PAGE>
Subscription Rights Each Eligible Account Holder has been
of Eligible Account given non-transferable rights to subscribe for the greater
Holders of $100,000 of Common Stock, one-tenth of one percent of
the total number of shares offered in the Subscription and
Community Offering or 15 times the product (rounded down
to the whole next number) obtained by multiplying the
total number of shares to be issued by a fraction of which
the numerator is the amount of qualifying deposits of such
subscriber and the denominator is the total qualifying
deposits of all account holders in this category on the
qualifying date.
Subscription Rights The Bank's Tax-Qualified Employee Plans have been given
of Tax-Qualified non-transferable rights to subscribe, individually and in
Employee Plans the aggregate, for up to 10% of the total number of
shares sold in the Conversion after satisfaction of
subscriptions of Eligible Account Holders. Notwithstanding
the foregoing, to the extent orders for shares exceed the
maximum of the appraisal range, Tax-Qualified Employee
Plans shall be afforded a first priority to purchase
shares sold above the maximum of the appraisal range. It
is anticipated that Tax-Qualified Employee Plans will
purchase 8% of the Common Stock sold in the Conversion.
Subscription Rights After satisfaction of subscriptions of Eligible Account
of Supplemental Holders and Tax-Qualified Employee Plans, each
Eligible Account Supplemental Eligible Account Holder (other than directors
Holders and officers of the Bank) has been given non-transferable
rights to subscribe for the greater of $100,000 of Common
Stock, one-tenth of one percent of the total number of
shares offered in the Conversion or 15 times the product
(rounded down to the whole next number) obtained by
multiplying the total number of shares to be issued by a
fraction of which the numerator is the amount of
qualifying deposits of such subscriber and the denominator
is the total qualifying deposits of all account holders in
this category on the qualifying date. The subscription
rights of each Supplemental Eligible Account Holder shall
be reduced to the extent of such person's subscription
rights as an Eligible Account Holder.
Subscription Rights Each Other Member has been given non-transferable rights
of Other Members to subscribe for up to $100,000 of Common Stock or
one-tenth of one percent of the total Conversion after
satisfaction of the subscriptions of the Bank's Eligible
Account Holders, Tax-Qualified Employee Plans and
Supplemental Eligible Account Holders.
Subscription Rights Each individual employee, officer and director of the
of Bank Personnel Bank has been given the right to subscribe for up to
$100,000 of Common Stock after satisfaction of the
subscriptions of Eligible Account Holders, Tax-Qualified
Employee Plans, Supplemental Eligible Account Holders and
Other Members. Total shares subscribed for by the
employees, officers and directors in this category may not
exceed 25% of the total shares offered in the Conversion.
Purchase No person, together with associates, and persons acting
Limitations in concert, may purchase more than $200,000 of Common
Stock offered in the Conversion based on the Estimated
Valuation Range (as calculated without giving effect to
any increase in such range subsequent to the date hereof).
The aggregate purchases of directors and executive
officers and their associates may not exceed 34% of the
total number of shares offered in the Conversion. These
purchase limitations do not apply to the Bank's Tax-
Qualified Employee Plans.
Expiration Date of All subscriptions for Common Stock must be received by
Subscription and 3:00 p.m., Excelsior Springs, Missouri time on
Community Offerings September ___, 1996.
ii
<PAGE>
How to Subscribe For information on how to subscribe for Common Stock
for Shares being offered in the Conversion, please read the
Prospectus and the stock order form and instructions
accompanying this Proxy Statement. Subscriptions will not
become effective until the Plan of Conversion has been
approved by the Bank's members and all of the Common Stock
offered in the Conversion has been subscribed for or sold
in the Subscription and Community Offering or through such
other means as may be approved by the OTS.
Price of Common All sales of Common Stock in the Subscription and
Stock Community Offering will be made at the same price per
share which is currently expected to be $10.00 per share
on the basis of an independent appraisal of the pro forma
market value of the Bank and the Holding Company upon
Conversion. On the basis of a preliminary appraisal by RP
Financial, LC. which has been reviewed by the OTS, a
minimum of 892,500 and a maximum of 1,207,500 shares will
be offered in the Conversion. See "The Conversion- Stock
Pricing and Number of Shares to be Issued" in the
Prospectus.
Tax Consequences The Bank has received an opinion from its special counsel,
Luse Lehman Gorman Pomerenk & Schick, P.C., stating that
the Conversion is a nontaxable reorganization under
Section 368(a)(1)(F) of the Internal Revenue Code. The
Bank has also received an opinion from KPMG Peat Marwick
LLP stating that the Conversion will not be a taxable
transaction for Missouri income tax purposes.
Required Vote Approval of the Plan of Conversion will require the
affirmative vote of a majority of all votes eligible to be
cast at the Special Meeting.
YOUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR
---
THE PLAN OF CONVERSION
iii
<PAGE>
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
PROXY STATEMENT
SPECIAL MEETING OF MEMBERS TO BE HELD ON SEPTEMBER ___, 1996
PURPOSE OF MEETING
This Proxy Statement is being furnished to you in connection with the
solicitation on behalf of the Board of Directors of Community Bank of Excelsior
Springs, A Savings Bank (the "Bank") of the proxies to be voted at the Special
Meeting of Members (the "Special Meeting") of the Bank to be held at the Bank's
main office located at 1001 N. Jesse James Road, Excelsior Springs, Missouri, on
September ___, 1996 at 4:30 p.m. Excelsior Springs, Missouri time, and at any
adjournments thereof. The Special Meeting is being held for the purpose of
considering and voting upon a Plan of Conversion under which the Bank would be
converted (the "Conversion") from its present mutual form of organization into a
federally chartered savings bank organized in stock form, the concurrent sale of
all the common stock of the stock savings bank to CBES Bancorp, Inc. (the
"Holding Company"), a Delaware corporation, and the sale by the Holding Company
of shares of its common stock (the "Common Stock") and such other business as
may properly come before the meeting and any adjournment thereof.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE BANK RECOMMENDS THAT YOU VOTE TO APPROVE
THE PLAN OF CONVERSION.
The Bank is currently organized in "mutual" rather than "stock" form,
meaning that it has no stockholders and no authority under its federal mutual
charter to issue capital stock. The Bank's Board of Directors has adopted the
Plan of Conversion providing for the Conversion. The sale of Common Stock of
the Holding Company, which was recently formed to become the holding company of
the Bank, will substantially increase the Bank's net worth. The Holding Company
will exchange 50% of the net proceeds from the sale of the Common Stock for the
common stock of the Bank to be issued upon Conversion. The Holding Company
expects to retain the balance of the net proceeds, as its initial capitalization
of which the Holding Company intends to lend funds to the ESOP to fund its
purchase of Common Stock. This increased capital will support the expansion of
the Bank's financial services to the public. The Board of Directors of the Bank
also believes that the conversion to stock form and the use of a holding company
structure will enhance the Bank's ability to expand through possible mergers and
acquisitions (although no such transactions are contemplated at this time) and
will facilitate its future access to the capital markets.
The Board of Directors of the Bank believes that the Conversion will
further benefit the Bank by enabling it to attract and retain key personnel
through prudent use of stock-related incentive compensation and benefit plans.
The Board of Directors of the Holding Company intends to adopt a stock option
and incentive plan and a recognition and retention plan, subject to approval of
Holding Company stockholders following completion of the Conversion. See
"Management - Benefit Plans" in the accompanying Prospectus.
Voting in favor of the Plan of Conversion will not obligate any person to
purchase any Common Stock.
THE OFFICE OF THRIFT SUPERVISION ("OTS") HAS APPROVED THE PLAN OF
CONVERSION SUBJECT TO THE APPROVAL OF THE BANK'S MEMBERS AND THE SATISFACTION OF
CERTAIN OTHER CONDITIONS. HOWEVER, SUCH APPROVAL DOES NOT CONSTITUTE A
RECOMMENDATION OR ENDORSEMENT OF THE PLAN OF CONVERSION BY THE OTS.
<PAGE>
INFORMATION RELATING TO VOTING AT THE SPECIAL MEETING
The Board of Directors of the Bank has fixed _______, 1996 as the voting
record date ("Voting Record Date") for the determination of members entitled to
notice of the Special Meeting. All Bank depositors and certain borrowers are
members of the Bank under its current charter. All Bank members of record as of
the close of business on the Voting Record Date and borrowers as of both
________, 1995 and _______, 1996 who continue to be members as of the date of
the Special Meeting will be entitled to vote at the Special Meeting or any
adjournment thereof.
Each depositor (including IRA and Keogh account beneficiaries) will be
entitled at the Special Meeting to cast one vote for each $100, or fraction
thereof, of the aggregate withdrawal value of all of such depositor's accounts
in the Bank as of the Voting Record Date, up to a maximum of 1,000 votes. In
general, accounts held in different ownership capacities will be treated as
separate memberships for purposes of applying the 1,000 vote limitation. For
example, if two persons hold a $100,000 account in their joint names and each of
the persons also holds a separate account for $100,000 in his own name, each
person would be entitled to 1,000 votes for each separate account and they would
together be entitled to cast 1,000 votes on the basis of the joint account.
Where no proxies are received from IRA and Keogh account beneficiaries, after
due notification, the Bank, as trustee of these accounts, is entitled to vote
these accounts in favor of the Plan of Conversion.
Each borrower member of the Bank as of both ________, 1995 and _______,
1996 who continues to be a borrower as of the date of the Special Meeting will
be entitled to cast one vote as a borrower member, in addition to any votes he
or she may be entitled to cast as a depositor.
Approval of the Plan of Conversion requires the affirmative vote of a
majority of the total outstanding votes of the Bank's members eligible to be
cast at the Special Meeting. As of _______, 1996, the Bank had approximately
_____ members who were entitled to cast a total of approximately _______ votes
at the Special Meeting.
Bank members may vote at the Special Meeting or any adjournment thereof
in person or by proxy. Any member giving a proxy will have the right to revoke
the proxy at any time before it is voted by giving written notice to the
Secretary of the Bank, provided that such written notice is received by the
Secretary prior to the Special Meeting or any adjournment thereof, or upon
request if the member is present and chooses to vote in person.
All properly executed proxies received by the Board of Directors of the
Bank will be voted in accordance with the instructions indicated thereon by the
members giving such proxies. If no instructions are given, such proxies will be
voted in favor of the Plan of Conversion. If any other matters are properly
presented at the Special Meeting and may properly be voted on, the proxies
solicited hereby will be voted on such matters in accordance with the best
judgment of the proxy holders named thereon. Management is not aware of any
other business to be presented at the Special Meeting.
If a proxy is not executed and is returned or the member does not vote in
person, the Bank is prohibited by OTS regulations from using a previously
executed proxy to vote for the Conversion. As a result, failure to vote may have
the same effect as a vote against the Plan of Conversion.
To the extent necessary to permit approval of the Plan of Conversion,
proxies may be solicited by officers, directors or regular employees of the
Bank, in person, by telephone or through other forms of communication and, if
necessary, the Special Meeting may be adjourned to a later date. Such persons
will be reimbursed by the Bank for their expenses incurred in connection with
such solicitation. The Bank will bear all costs of this solicitation. The
proxies solicited hereby will be used only at the Special Meeting and at any
adjournment thereof.
2
<PAGE>
DESCRIPTION OF THE PLAN OF CONVERSION
The Plan of Conversion to be presented for approval at the Special
Meeting provides for the Conversion to be accomplished through adoption of
amended charter and bylaws for the Bank to authorize the issuance of capital
stock along with the concurrent formation of a holding company. As part of the
Conversion, the Plan of Conversion provides for the subscription offering (the
"Subscription Offering") of the Common Stock to the Bank's (i) Eligible Account
Holders (deposit account holders with an account balance of $50 or more as of
March 31, 1995); (ii) Tax-Qualified Employee Plans, (iii) Supplemental Eligible
Account Holders (deposit account holders with an account balance of $50 or more
as of June 30, 1996); (iv) Other Members (deposit account holders and borrowers
eligible to vote at the Special Meeting who are not Eligible Account Holders or
Supplemental Eligible Account Holders); and (v) the Bank's employees, officers
and directors. Notwithstanding the foregoing, to the extent orders for shares
exceed the maximum of the appraisal range, Tax-Qualified Employee Plans shall be
afforded a first priority to purchase shares sold above the maximum of the
appraisal range. It is anticipated that Tax-Qualified Employee Plans will
purchase 8% of the Common Stock sold in the Conversion. Concurrently with or
following completion of the Subscription Offering, members of the general
public, with a preference first to natural persons residing in Ray and Clay
Counties, Missouri, will be afforded the opportunity to purchase the Common
Stock not subscribed for in the Subscription Offering (the "Community Offering"
and when referred to with the Subscription Offering, the "Subscription and
Community Offering").
THE SUBSCRIPTION OFFERING HAS COMMENCED AS OF THE DATE OF MAILING OF THIS
PROXY STATEMENT. A PROSPECTUS EXPLAINING THE TERMS OF THE SUBSCRIPTION AND
COMMUNITY OFFERING, INCLUDING HOW TO ORDER AND PAY FOR SHARES AND DESCRIBING THE
BUSINESS OF THE BANK AND THE HOLDING COMPANY, ACCOMPANIES THIS PROXY STATEMENT
AND SHOULD BE READ BY ALL PERSONS WHO WISH TO CONSIDER SUBSCRIBING FOR COMMON
STOCK. THE SUBSCRIPTION AND COMMUNITY OFFERING EXPIRES AT 3:00 P.M. EXCELSIOR
SPRINGS, MISSOURI TIME ON SEPTEMBER ___, 1996 UNLESS EXTENDED BY THE BANK AND
THE HOLDING COMPANY.
The federal conversion regulations require that all stock offered in a
conversion must be sold in order for the conversion to become effective. The
conversion regulations require that the offering be completed within 45 days
after completion of the Subscription Offering period unless extended by the Bank
and the Holding Company with the approval of the OTS. This 45-day period
expires October ___, 1996 unless the Subscription Offering is extended. If this
is not possible, an occurrence that is currently not anticipated, the Board of
Directors of the Bank and the Holding Company will consult with the OTS to
determine an appropriate alternative method of selling all unsubscribed shares
offered in the Conversion. The Plan of Conversion provides that the Conversion
must be completed within 24 months after the date of the Special Meeting.
The Subscription and Community Offering or any other sale of the
unsubscribed shares will be made as soon as practicable after the date of the
Special Meeting. No sales of shares may be completed, either in the
Subscription and Community Offering or otherwise, unless the Plan of Conversion
is approved by the members of the Bank.
The commencement and completion of the Subscription and Community
Offering, however, is subject to market conditions and other factors beyond the
Bank's control. Due to adverse conditions in the stock market in the past, a
number of converting thrift institutions encountered significant delays in
completing their stock offerings or were not able to complete them at all. No
assurance can be given as to the length of time after approval of the Plan of
Conversion at the Special Meeting that will be required to complete the
Subscription and Community Offering or other sale of the Common Stock to be
offered in the Conversion. If delays are experienced, significant changes may
occur in the estimated pro forma market value of the Holding Company's Common
Stock, together with corresponding changes in the offering price and the net
proceeds realized by the Bank and the Holding Company from the sale of the
Common Stock. The Bank and the Holding Company may also incur substantial
additional printing, legal, accounting and other expenses in completing the
Conversion.
3
<PAGE>
The following is a brief summary of the Conversion and is qualified in
its entirety by reference to the Plan of Conversion, a complete copy of which is
attached hereto. The Bank's federal stock charter and bylaws that will become
effective upon completion of the Conversion are available from the Bank upon
request. A copy of the Holding Company's certificate of incorporation and
bylaws are also available from the Bank upon request.
PRINCIPAL EFFECTS OF CONVERSION
Depositors. The Conversion will not change the amount, interest rate,
withdrawal rights or federal insurance protection of deposit accounts, or affect
deposit accounts in any way other than with respect to voting and liquidation
rights as discussed below.
Borrowers. The rights and obligations of borrowers under their loan
agreements with the Bank will remain unchanged by the Conversion. The principal
amount, interest rate and maturity date of loans will remain as they were
contractually fixed prior to the Conversion.
Voting Rights of Members. Under the Bank's current federal mutual
charter, depositors and certain borrowers have voting rights as members of the
Bank with respect to the election of directors and certain other affairs of the
Bank. After the Conversion, exclusive voting rights with respect to all such
matters will be vested in the Holding Company as the sole stockholder of the
Bank. Depositors and borrowers will no longer have any voting rights, except to
the extent that they become stockholders of the Holding Company through the
purchase of its Common Stock. Voting rights in the Holding Company will be held
exclusively by its stockholders.
Liquidation Rights of Depositor Members. Currently, in the unlikely
event of liquidation of the Bank, any assets remaining after satisfaction of all
creditors' claims in full (including the claims of all depositors to the
withdrawal value of their accounts) would be distributed pro rata among the
depositors of the Bank, with the pro rata share of each being the same
proportion of all such remaining assets as the withdrawal value of each
depositor's account is of the total withdrawal value of all accounts in the Bank
at the time of liquidation. After the Conversion, the assets of the Bank would
first be applied, in the event of liquidation, against the claims of all
creditors (including the claims of all depositors to the withdrawal value of
their accounts). Any remaining assets would then be distributed to the persons
who qualified as Eligible Account Holders or Supplemental Eligible Account
Holders under the Plan of Conversion to the extent of their interests in a
"Liquidation Account" that will be established at the time of the completion of
the Conversion and then to the Holding Company as the sole stockholder of the
Bank's outstanding common stock. The Bank's depositors who did not qualify as
Eligible Account Holders or Supplemental Eligible Account Holders would have no
right to share in any residual net worth of the Bank in the event of liquidation
after the Conversion, but would continue to have the right as creditors of the
Bank to receive the full withdrawal value of their deposits prior to any
distribution to the Holding Company as the Bank's sole stockholder. In addition,
the Bank's deposit accounts will continue to be insured by the Federal Deposit
Insurance Corporation ("FDIC") to the maximum extent permitted by law, currently
up to $100,000 per insured account. The Liquidation Account will initially be
established in an amount equal to the net worth of the Bank as of the date of
the Bank's latest statement of financial condition contained in the final
prospectus used in connection with the Conversion. Each Eligible Account Holder
and/or Supplemental Eligible Account Holder will receive an initial interest in
the Liquidation Account in the same proportion as the balance in all of his
qualifying deposit accounts was of the aggregate balance in all qualifying
deposit accounts of all Eligible Account Holders and Supplemental Eligible
Account Holders on March 31, 1995 or June 30, 1996, respectively. For accounts
in existence on both dates, separate subaccounts shall be determined on the
basis of the qualifying deposits in such accounts on the record dates. However,
if the amount in the qualifying deposit account on any annual closing date of
the Bank is less than the lowest amount in such deposit account on the
Eligibility Record Date and/or Supplemental Eligibility Record Date, and any
subsequent annual closing date, this interest in the Liquidation Account will be
reduced by an amount proportionate to such reduction in the related deposit
account and will not thereafter be increased despite any subsequent increase in
the related deposit account.
The Bank. Under federal law, the stock savings bank resulting from
the Conversion will be deemed to be a continuation of the mutual bank rather
than a new entity and will continue to have all of the rights, privileges,
properties, assets and liabilities of the Bank prior to the Conversion. The
Conversion will enable the Bank to issue capital stock, but will not change the
general objectives, purposes or types of business currently conducted by the
Bank, and no assets of the Bank will be distributed in order to effect the
Conversion, other than to pay the expenses incident thereto. After the
Conversion, the Bank will remain subject to examination and regulation by the
OTS and
4
<PAGE>
will continue to be a member of the Federal Home Loan Bank System. The
Conversion will not cause any change in the executive officers or directors of
the Bank.
Tax Consequences. Consummation of the Conversion is expressly
conditioned upon prior receipt of either a ruling of the United States Internal
Revenue Service ("IRS") or an opinion letter of the Bank's counsel with respect
to federal taxation, and either a ruling of the Missouri taxation authorities or
an opinion letter with respect to Missouri taxation, to the effect that the
Conversion will not be a taxable transaction to the Holding Company, the Bank or
the Bank's deposit account holders receiving subscription rights.
The Bank has received an opinion of its special counsel, Luse Lehman
Gorman Pomerenk & Schick, P.C., to the effect that (i) the Conversion will
qualify as a reorganization under Section 368(a)(1)(F) of the Internal Revenue
Code of 1986, as amended, and no gain or loss will be recognized to the Bank in
either its mutual form or its stock form by reason of the proposed Conversion,
(ii) no gain or loss will be recognized to the Bank upon the receipt of money
from the Holding Company for stock of the Bank; and no gain or loss will be
recognized to the Holding Company upon the receipt of money for Common Stock of
the Holding Company; (iii) the assets of the Bank in either its mutual or its
stock form will have the same basis before and after the Conversion; (iv) the
holding period of the assets of the Bank will include the period during which
the assets were held by the Bank in its mutual form prior to conversion; (v)
gain, if any, will be realized by the Eligible Account Holders and Supplemental
Eligible Account Holders of the Bank, upon the constructive issuance to them of
withdrawable deposit accounts of the Bank immediately after the proposed
Conversion, interests in the Liquidation Account, and on the receipt or
distribution to them of the nontransferable Subscription Rights to purchase
Holding Company Common Stock (any such gain will be recognized by such account
holder, but only to the extent, if any, of an amount not in excess of the fair
market value of the Subscription Rights and Liquidation Account interests
received); (vi) the basis of the account holder's savings accounts in the Bank
after the Conversion will be the same as the basis of his or her savings
accounts in the Bank prior to the Conversion; (vii) the basis of each account
holder's interest in the Liquidation Account will be zero; (viii) the basis of
the Holding Company Common Stock to its shareholders will be the Purchase Price
thereof and a shareholder's holding period for Holding Company Common Stock
acquired through the exercise of Subscription Rights shall begin on the date on
which the Subscription Rights are exercised; (ix) the Bank, immediately after
Conversion, will succeed to the bad debt reserve accounts of the Bank, in mutual
form, and the bad debt reserves will have the same character in the hands of the
Bank after Conversion as if no distribution or transfer had occurred; and (x)
the creation of the liquidation account will have no effect on the Bank's
taxable income, deductions or addition to reserve for bad debts either in its
mutual or stock form.
The opinion from Luse Lehman Gorman Pomerenk & Schick, P.C., is based,
among other things, on certain assumptions, including the assumptions that the
exercise price of the Subscription Rights to purchase Holding Company Common
Stock will be approximately equal to the fair market value of that stock at the
time of the completion of the proposed Conversion. With respect to the
Subscription Rights, the Bank has received an opinion of RP Financial, LC. (the
"Appraiser Opinion") which, based on certain assumptions, concludes that the
Subscription Rights to be received by Eligible Account Holders, Supplemental
Eligible Account Holders and other eligible subscribers do not have any economic
value at the time of distribution or at the time the Subscription Rights are
exercised, whether or not a public offering takes place.
The Bank has also received an opinion of Luse Lehman Gorman Pomerenk &
Schick, P.C., to the effect that, based in part on the Appraiser Opinion, no
taxable income will be realized by a stock subscriber as a result of the
exercise of non-transferable Subscription Rights to purchase shares of Holding
Company Common Stock or upon the lapse of such rights.
If it is subsequently established that the subscription rights received
by such persons have an ascertainable fair market value, or in the case of
employees, directors and officers are compensatory in nature, then, in such
event, the subscription rights will be taxable to the recipient in the amount of
their fair market value. In this regard, the subscription rights may be taxed
partially or entirely at ordinary income tax rates.
With respect to Missouri taxation, the Bank has received an opinion from
KPMG Peat Marwick LLP to the effect that, assuming the Conversion does not
result in any federal taxable income, gain or loss to the Bank in its mutual or
stock form, the Holding Company, the account holders, borrowers, officers,
directors and employees and Tax-Qualified Employee Plans of the Bank, the
Conversion should not result in any Missouri income tax liability to such
entities or persons.
5
<PAGE>
Unlike a private letter ruling, the opinions of Luse Lehman Gorman
Pomerenk & Schick, P.C., and KPMG Peat Marwick LLP as well as the Appraiser
Opinion, have no binding effect or official status, and no assurance can be
given that the conclusions reached in any of those opinions would be sustained
by a court if contested by the IRS or the Missouri tax authorities.
APPROVAL, INTERPRETATION, AMENDMENT AND TERMINATION
Under the Plan of Conversion, the letter from the OTS giving approval
thereto, and applicable regulations, consummation of the Conversion is subject
to the satisfaction of the following conditions: (a) approval of the Plan of
Conversion by members of the Bank casting at least a majority of the votes
eligible to be cast at the Special Meeting; (b) sale of all of the Common Stock
to be offered in the Conversion; and (c) receipt of favorable rulings or
opinions of counsel as to the federal and Missouri tax consequences of the
Conversion.
The Plan of Conversion may be substantively amended by the Boards of
Directors of the Bank and the Holding Company with the concurrence of the OTS.
If the Plan of Conversion is amended, proxies which have been received prior to
such amendment will not be resolicited unless otherwise required by the OTS.
Also, as required by the federal regulations, the Plan of Conversion provides
that the transactions contemplated thereby may be terminated by the Board of
Directors of the Bank alone at any time prior to the Special Meeting and may be
terminated by the Board of Directors of the Bank at any time thereafter with the
concurrence of the OTS, notwithstanding approval of the Plan of Conversion by
the members of the Bank at the Special Meeting. All interpretations by the Bank
and the Holding Company of the Plan of Conversion and of the Order Forms and
related materials for the Subscription and Community Offering will be final,
except as regards or affects the OTS.
JUDICIAL REVIEW
Section 5(i)(2)(B) of the Home Owners' Loan Act, as amended, 12 U.S.C.
(S)1464(i)(2)(B) and Section 563b.8(u) of the Rules and Regulations promulgated
thereunder (12 C.F.R. Section 563b.8(u)) provide: (i) that persons aggrieved by
a final action of the OTS which approves, with or without conditions, or
disapproves a plan of conversion, may obtain review of such final action only by
filing a written petition in the United States Court of Appeals for the circuit
in which the principal office or residence of such person is located, or in the
United States Court of Appeals for the District of Columbia, requesting that the
final action of the OTS be modified, terminated or set aside, and (ii) that such
petition must be filed within 30 days after publication of notice of such final
action in the Federal Register, or 30 days after the date of mailing of the
notice and proxy statement for the meeting of the converting institution's
members at which the conversion is to be voted on, whichever is later. The
notice of the Special Meeting of the Bank's members to vote on the Plan of
Conversion described herein is included at the beginning of this Proxy
Statement. The statute and regulation referred to above should be consulted for
further information.
ADDITIONAL INFORMATION
The information contained in the accompanying Prospectus, including a
more detailed description of the Plan of Conversion, consolidated financial
statements of the Bank and a description of the capitalization and business of
the Bank and the Holding Company, including the Bank's directors and executive
officers and their compensation, the anticipated use of the net proceeds from
the sale of the Common Stock and a description of the Common Stock, is intended
to help you evaluate the Conversion and is incorporated by this reference.
6
<PAGE>
YOUR VOTE IS VERY IMPORTANT TO US. PLEASE TAKE A MOMENT NOW TO COMPLETE
AND RETURN YOUR PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY STILL
ATTEND THE SPECIAL MEETING AND VOTE IN PERSON EVEN THOUGH YOU HAVE VOTED YOUR
PROXY. FAILURE TO SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE
CONVERSION.
If you have any questions, please call our Stock Information Center at
(816) ________.
IMPORTANT: YOU MAY BE ENTITLED TO VOTE IN MORE THAN ONE CAPACITY. PLEASE
SIGN, DATE AND PROMPTLY RETURN EACH PROXY CARD YOU RECEIVE.
________________
THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER WILL BE MADE ONLY BY THE PROSPECTUS.
THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR
GUARANTEED.
7
<PAGE>
Exhibit 99.4
CBES BANCORP, INC.
PROPOSED HOLDING COMPANY FOR
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
EXCELSIOR SPRINGS, MISSOURI
PROPOSED MARKETING MATERIALS
6-19-96
<PAGE>
Marketing Materials for
CBES Bancorp, Inc.
Excelsior Springs, Missouri
Table of Contents
-----------------
I. Press Releases
A. Explanation
B. Schedule
C. Distribution List
D. Press Release Examples
II. Advertisements
A. Explanation
B. Schedule
C. Advertisement Examples
III. Question and Answer Brochure
A. Explanation
B. Method of Distribution
C. Example
IV. Officer and Director Brochure
A. Explanation
B. Method of Distribution
C. Example
V. IRA Mailing
A. Explanation
B. Quantity
C. IRA Mailing Example
VI. Counter Cards and Lobby Posters
A. Explanation
B. Quantity
VII. Statement Stuffers
A. Explanation
B. Quantity - Method of Distribution
C. Example
VIII. Invitations
A. Explanation
B. Quantity - Method of Distribution
C. Examples
<PAGE>
IX. Letters
A. Explanation
B. Method of Distribution
C. Examples
X. Proxy Reminder
A. Explanation
B. Example
<PAGE>
I. Press Releases
A. Explanation
In an effort to assure that all customers, community members and other
interested investors receive prompt accurate information in a simultaneous
manner, Trident advises the Savings Bank to forward press releases to area
newspapers, radio stations, etc. at various points during the conversion
process.
Only press releases approved by Conversion Counsel and the OTS will be
forwarded for publication in any manner.
B. Schedule
1. OTS Approval of Conversion
2. Close of Stock Offering
<PAGE>
C. Distribution List
National Distribution List
--------------------------
National Thrift News Wall Street Journal
- -------------------- -------------------
212 West 35th Street World Financial Center
13th Floor 200 Liberty
New York, New York 10001 New York, NY 10004
Richard Chang
American Banker SNL Securities
- --------------- --------------
One State Street Plaza Post Office Box 2124
New York, New York 10004 Charlottesville, Virginia 22902
Michael Weinstein
Barrons Investors Business Daily
- ------- ------------------------
Dow Jones & Company 12655 Beatrice Street
Barrons Statistical Information Post Office Box 661750
200 Burnett Road Los Angeles, California 90066
Chicopee, Massachusetts 01020
New York Times
- --------------
229 West 43rd Street
New York, NY 10036
<PAGE>
Local Media List
----------------
(To be provided)
Newspaper
- ---------
Radio
- -----
<PAGE>
D. Press Release Examples
PRESS RELEASE FOR IMMEDIATE RELEASE
---------------------
For More Information Contact:
Larry E. Hermreck
(816) 630-6711
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
---------------------------------------------------
CONVERSION TO STOCK FORM APPROVED
---------------------------------
Excelsior Springs, Missouri (August __, 1996) - Larry E. Hermreck, Chief
Executive Officer of Community Bank of Excelsior Springs, A Savings Bank
("Community Bank" or the "Bank"), Excelsior Springs, Missouri, announced that
Community Bank has received approval from the Office of Thrift Supervision to
convert from a federally chartered mutual savings bank to a federally chartered
stock savings bank. In connection with the Conversion, Community Bank has
formed a holding company, CBES Bancorp, Inc., to hold all of the outstanding
capital stock of Community Bank.
CBES Bancorp, Inc. is offering up to 1,207,500 shares of its common stock,
subject to adjustment, at a price of $10.00 per, share. Certain account holders
and borrowers of the Bank will have an opportunity to subscribe for stock
through a Subscription Offering that closes on September __, 1996. Shares that
are not subscribed for during the Subscription Offering may be offered to the
general public in a Community Offering, with first preference given to natural
persons and trusts of natural persons residing in Clay and Ray Counties,
Missouri. The Subscription and Community Offerings will be managed by Trident
Securities, Inc. of Raleigh, North Carolina. Copies of the Prospectus relating
to the offerings and describing the Plan of Conversion will be mailed to
customers on or about August __, 1996.
As a result of the Conversion, Community Bank will be structured in the
stock form as are all commercial banks and an increasing number of savings
institutions and will be a
<PAGE>
subsidiary of CBES Bancorp, Inc. According to Mr. Hermreck, "Our day to day
operations will not change as a result of the Conversion and deposits will
continue to be insured by the FDIC up to the applicable legal limits."
Customers with questions concerning the stock offering should call
Community Bank's Stock Information Center at (816) ________, or visit one of
Community Bank's offices.
<PAGE>
PRESS RELEASE FOR IMMEDIATE RELEASE
---------------------
For More Information Contact:
Larry E. Hermreck
(816) 630-6711
COMMUNITY BANK COMPLETES INITIAL STOCK OFFERING
-----------------------------------------------
Excelsior Springs, Missouri - (September __, 1996) Larry E. Hermreck, Chief
Executive Officer of Community Bank of Excelsior Springs, A Savings Bank
("Community Bank"), announced today that CBES Bancorp, Inc., the proposed
holding company for Community Bank, has completed its initial stock offering in
connection with Community Bank's conversion from mutual to stock form. A total
of __________ shares were sold at the price of $10.00 per share.
On September __, 1996, Community Bank's Plan of Conversion was approved by
Community Bank's voting members at a special meeting of members.
Mr. Hermreck said that the Officers and Board of Directors of CBES Bancorp,
Inc. and Community Bank wished to express their thanks for the response to the
stock offering and that Community Bank looks forward to serving the needs of its
customers and new stockholders as a community-based stock institution. The
stock is anticipated to commence trading today, September __, 1996 on the Nasdaq
SmallCap Market under the symbol "CBES". Trident Securities, Inc. of Raleigh,
North Carolina managed the stock offering.
<PAGE>
II. Advertisements
A. Explanation
The intended use of the attached advertisement "A" is to notify Community
Bank's customers and members of the local community that the conversion
offering is underway.
The intended use of advertisement "B" is to remind Community Bank's
customers of the closing date of the subscription offering.
B. Media Schedule
1. Advertisement A - To be run immediately following OTS approval and run
weekly for the first three weeks.
2. Advertisement B - To be run during the last week of the subscription
offering.
Trident may feel it is necessary to run more ads in order to remind
customers and community members of the close of the Subscription and
Community Offerings.
Alternatively, Trident may, depending upon the response from the customer
base, choose to run fewer ads or no ads at all.
These ads will run in the local newspapers.
The ad size will be as shown or smaller.
<PAGE>
- --------------------------------------------------------------------------------
This announcement is neither an offer to sell nor a solicitation of an offer
to buy these securities. The offer is made only by the prospectus. These
shares have not been approved or disapproved by the Securities and Exchange
Commission, the Office of Thrift Supervision or the Federal Deposit Insurance
Corporation, nor has such commission, office or corporation passed upon the
accuracy or adequacy of the prospectus. Any representation to the contrary is
unlawful.
NEW ISSUE ____________, 1996
1,207,500 SHARES
These shares are being offered pursuant
to a Plan of Conversion whereby
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
Excelsior Springs, Missouri, will
convert from a federal mutual savings bank to a
federal capital stock savings bank
and become a wholly owned subsidiary of
CBES BANCORP, INC.
COMMON STOCK
____________
PRICE $10.00 PER SHARE
____________
TRIDENT SECURITIES, INC.
For a copy of the prospectus call (816) ________.
Copies of the prospectus may be obtained in any State in which this
announcement is circulated from Trident Securities, Inc.
or such other brokers and dealers as may legally
offer these securities in such state.
THE STOCK WILL NOT BE INSURED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY.
- --------------------------------------------------------------------------------
<PAGE>
Advertisement (B)
- --------------------------------------------------------------------------------
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
SEPTEMBER __, 1996 IS THE DEADLINE TO
ORDER STOCK OF CBES BANCORP, INC.
Customers of Community Bank of Excelsior Springs, A Savings Bank
and members of the general public have the opportunity
to invest in Community Bank by subscribing for
common stock in its proposed holding company
CBES BANCORP, INC.
A prospectus relating to these securities is
available at our office or by calling our
Stock Information Center at (816) ________.
This announcement is neither an offer to sell nor a
solicitation of an offer to buy the stock of
CBES Bancorp, Inc. The offer is made only by the
prospectus. The shares of common stock are not
deposits or savings accounts and will not be insured
by the Federal Deposit Insurance Corporation
or any other government agency.
Copies of the Prospectus may be obtained in any State in which this announcement
is circulated from Trident Securities, Inc. or such other brokers and dealers
as may legally offer these securities in such state.
- --------------------------------------------------------------------------------
<PAGE>
III. Question and Answer Brochure
A. Explanation
The Question and Answer brochure is an essential marketing piece in any
conversion. It serves to answer some of the most commonly asked questions
in "plain, everyday language". Although most of the answers are taken
verbatim from the Prospectus, it saves the individual from searching for
the answer to a simple question.
B. Method of Distribution
There are four primary methods of distribution of the Question and Answer
brochure. However, regardless of the method the brochures are always
accompanied by a Prospectus.
1. A Question and Answer brochure is sent out in the initial mailing to
all members of the Bank.
2. Question and Answer brochures are available in Community Bank's
offices.
3. Question and Answer brochures are distributed in information packets
at community meetings.
4. Question and Answer brochures are sent out in a standard information
packet to all interested investors who phone the Stock Information
Center requesting information.
<PAGE>
QUESTIONS AND ANSWERS
REGARDING
THE PLAN OF CONVERSION
On May 14, 1996, the Board of Directors of Community Bank of Excelsior
Springs, A Savings Bank ("Community Bank" or the "Bank") unanimously adopted the
Plan of Conversion, pursuant to which Community Bank will convert from a
federally-chartered mutual savings bank to a federally-chartered stock savings
bank. In addition, all of Community Bank's outstanding capital stock will be
issued to the holding company, CBES Bancorp, Inc. (the "Holding Company"),
which was organized by Community Bank to own Community Bank as a subsidiary.
This brochure is provided to answer general questions you might have about
the Conversion. Following the Conversion, Community Bank will continue to
provide financial services to its depositors, borrowers and other customers as
it has in the past and will operate with its existing management and employees.
The Conversion will not affect the terms, balances, interest rates or existing
federal insurance coverage on Community Bank's deposits or the terms or
conditions of any loans to existing borrowers under their individual contract
arrangements with Community Bank.
For complete information regarding the conversion, see the Prospectus and
the Proxy Statement dated August __, 1996. Copies of each of the Prospectus and
the Proxy Statement may be obtained by calling the Stock Information Center at
(816) ________.
THIS INFORMATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY CBES BANCORP, INC. COMMON STOCK. OFFERS TO BUY OR TO SELL MAY
BE MADE ONLY BY THE PROSPECTUS. PLEASE READ THE PROSPECTUS PRIOR TO MAKING AN
INVESTMENT DECISION.
THE SHARES OF CBES BANCORP, INC. COMMON STOCK BEING OFFERED IN THE
SUBSCRIPTION AND DIRECT COMMUNITY OFFERINGS ARE NOT SAVINGS OR DEPOSIT ACCOUNTS
AND ARE NOT INSURED BY THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE>
CBES BANCORP, INC.
(THE PROPOSED HOLDING COMPANY FOR
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK)
Questions and Answers Regarding the Subscription and Community Offerings
MUTUAL TO STOCK CONVERSION
--------------------------
1. Q. WHAT IS A "CONVERSION"?
A. Conversion is a change in the legal form of organization. Community
Bank currently operates as a federally chartered mutual savings bank
with no stockholders. Through the Conversion, Community Bank will
become a federally chartered stock savings bank, and the stock of its
holding company, CBES Bancorp, Inc. will be held by stockholders who
purchase stock in the Subscription, Direct Community and Syndicated
Community Offerings or in the open market following the Offerings.
2. Q. WHY IS COMMUNITY BANK CONVERTING?
A. Community Bank, as a mutual savings bank, does not have stockholders
and has no authority to issue capital stock. By converting to the
stock form of organization, the Bank will be structured in the form
used by commercial banks, most business entities and a growing number
of savings institutions. The Conversion will be important to the
future growth and performance of the Bank by providing a larger
capital base from which the Bank may operate, the ability to attract
and retain qualified management through stock-based employee benefit
plans, enhanced ability to diversify into other financial services
related activities and expanded ability to render services to the
public.
The Board of Directors and management of Community Bank believe that
the stock form of organization is preferable to the mutual form of
organization for a financial institution. The Board and management
recognize the decline in the number of mutual thrifts from over 12,500
mutual institutions in 1929 to just over 800 mutual thrifts today.
Community Bank believes that converting to the stock form of
organization will allow Community Bank to more effectively compete
with local community banks, thrifts, and with statewide and regional
banks, which are in stock form. Community Bank believes that by
combining its existing quality service and products with a local
ownership base the Bank's customers and community members who become
stockholders will be inclined to do more business with Community Bank.
<PAGE>
Furthermore, because Community Bank competes with local and regional
banks not only for customers, but also for employees, Community Bank
believes that the stock form of organization will better afford
Community Bank the opportunity to attract and retain employees,
management and directors through various stock benefit plans which are
not available to mutual savings institutions.
3. Q. IS COMMUNITY BANK'S MUTUAL TO STOCK CONVERSION BENEFICIAL TO THE
COMMUNITIES THAT THE BANK SERVES?
A. Management believes that the structure of the Subscription, Community
and Syndicated Community Offerings is in the best interest of the
various communities that Community Bank serves because following the
Conversion it is anticipated that a significant portion of the Common
Stock will be owned by local residents desiring to share in the
ownership of a local community financial institution. Management
desires that a significant portion of the shares of common stock sold
in the Offerings will be sold to residents of the Bank's "Local
Community," which is comprised of Clay and Ray Counties of Missouri.
4. Q. WHAT EFFECT WILL THE CONVERSION HAVE ON DEPOSIT ACCOUNTS AND
LOANS?
A. Terms and balances of accounts in Community Bank and interest rates
paid on such accounts will not be affected by the Conversion.
Insurable accounts will continue to be insured by the Federal Deposit
Insurance Corporation ("FDIC") up to the maximum amount permitted by
law. The Conversion also will not affect the terms or conditions of
any loans to existing borrowers or the rights and obligations of these
borrowers under their individual contractual arrangements with
Community Bank.
5. Q. WILL THE CONVERSION CAUSE ANY CHANGES IN COMMUNITY BANK'S
PERSONNEL?
A. No. Both before and after the Conversion, Community Bank's business
of accepting deposits, making loans and providing financial services
will continue without interruption with the same board of directors,
management and staff.
6. Q. WHAT APPROVALS MUST BE RECEIVED BEFORE THE CONVERSION BECOMES
EFFECTIVE?
A. First, the Board of Directors of Community Bank must adopt the Plan of
Conversion, which occurred on May 14, 1996. Second, the Office of
Thrift Supervision must approve the applications required to effect
the Conversion. These approvals have been obtained. Third, the Plan
of Conversion must be approved by a majority of all votes eligible to
be cast by Community Bank's voting members. A Special Meeting of
voting members will be held on September __, 1996, to consider and
vote upon the Plan of Conversion.
<PAGE>
THE HOLDING COMPANY
-------------------
7. Q. WHAT IS A HOLDING COMPANY?
A. A holding company is a company that owns another entity. Concurrent
with the Conversion, Community Bank will become a subsidiary of CBES
Bancorp, Inc., a company organized by Community Bank to acquire all of
the capital stock of Community Bank to be outstanding after the
Conversion.
8. Q. IF I DECIDE TO BUY STOCK IN THIS OFFERING, WILL I OWN STOCK IN THE
HOLDING COMPANY OR COMMUNITY BANK?
A. You will own stock in CBES Bancorp, Inc.. However, CBES Bancorp,
Inc., as a holding company, will own all of the outstanding capital
stock of Community Bank.
9. Q. WHY DID THE BOARD OF DIRECTORS FORM THE HOLDING COMPANY?
A. The Board of Directors believes that the Conversion of Community Bank
and the formation of the holding company will result in a stronger
financial institution with the ability to provide additional
flexibility to diversify the Bank's business activities through
existing or newly-formed subsidiaries, although there are no current
arrangements or understandings with respect to such diversification.
The holding company will also be able to use stock-based incentive
programs to attract and retain executive and other personnel for
itself and its subsidiaries.
ABOUT BECOMING A STOCKHOLDER
----------------------------
10. Q. WHAT ARE THE SUBSCRIPTION, DIRECT COMMUNITY AND SYNDICATED COMMUNITY
OFFERINGS?
A. Under the Plan of Conversion adopted by Community Bank, the Holding
Company is offering shares of stock in the Subscription Offering to
certain current and former customers of the Bank and to the Bank's
Employee Stock Ownership Plan ("ESOP"). Shares which are not
subscribed for in the Subscription Offering, if any, may be offered to
the general public in a Direct Community Offering with preference
given to natural persons who are residents of the Bank's Local
Community. These Offerings are consistent with the Board's objective
of CBES Bancorp, Inc. being a locally owned financial institution.
The Subscription and Direct Community Offerings are being managed by
Trident Securities, Inc. It is anticipated that any shares not
subscribed for in either the Subscription or Direct Community
Offerings may be offered for sale in a Syndicated Community Offering,
which is an offering on a best efforts basis by a selling group of
broker-dealers, managed by Trident Securities, Inc.
11. Q. MUST I PAY A COMMISSION TO BUY STOCK IN CONJUNCTION WITH THE
SUBSCRIPTION, DIRECT COMMUNITY AND SYNDICATED COMMUNITY OFFERINGS?
A. No. You will not pay a commission to buy the stock if the stock is
purchased in the Subscription, Direct Community or Syndicated
Community Offerings.
<PAGE>
12. Q. HOW MANY SHARES OF CBES BANCORP, INC. STOCK WILL BE ISSUED IN THE
CONVERSION?
A. It is currently expected that between 892,500 shares and 1,207,500
shares of common stock will be sold at a price of $10.00 per share.
Under certain circumstances the number of shares may be increased to
1,388,600.
13. Q. HOW WAS THE PRICE DETERMINED?
A. The aggregate price of the common stock was determined by RP
Financial, Inc., an independent appraisal firm specializing in the
thrift industry, and was approved by the Office of Thrift Supervision.
The price is based on the pro forma market value of Community Bank and
the Holding Company as determined by the independent evaluation.
14. Q. WHO IS ENTITLED TO BUY STOCK IN THE CONVERSION?
A. The shares of CBES Bancorp, Inc. to be issued in the Conversion are
being offered in the Subscription Offering in the following order of
priority to: (i) depositors with $50.00 or more on deposit at the
Bank as of March 31, 1995 ("Eligible Account Holders"), (ii) the
Bank's ESOP, (iii) depositors with $50.00 or more on deposit at the
Bank as of June 30, 1996 ("Supplemental Eligible Account Holders"),
and (iv) depositors of the Bank as of _______, 1996 ("Voting Record
Date") and borrowers of the Bank with loans outstanding as of
_________, 1996 which continue to be outstanding as of the Voting
Record Date ("Other Members"), subject to the priorities and purchase
limitations set forth in the Plan of Conversion. Subject to the prior
rights of holders of subscription rights, Common Stock not subscribed
for in the Subscription Offering may be offered in the Direct
Community Offering to certain members of the general public, with
preference given to natural persons and trusts of natural persons
residing in the Local Community. Shares, if any, not subscribed for
in the Subscription or Direct Community Offerings may be offered to
the general public in the Syndicated Community Offering.
15. Q. ARE THE SUBSCRIPTION RIGHTS TRANSFERABLE?
A. No. Subscription rights granted to Community Bank's Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members in
the Conversion are not transferable. Persons violating such
prohibition, directly or indirectly, may lose their right to purchase
stock in the Conversion and be subject to other possible sanctions.
IT IS THE RESPONSIBILITY OF EACH SUBSCRIBER QUALIFYING AS AN ELIGIBLE
ACCOUNT HOLDER, SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER OR OTHER MEMBER
TO LIST COMPLETELY ALL ACCOUNT NUMBERS FOR QUALIFYING SAVINGS ACCOUNTS
OR LOANS AS OF THE QUALIFYING DATE ON THE STOCK ORDER FORM.
16. Q. WHAT ARE THE MINIMUM AND MAXIMUM NUMBERS OF SHARES THAT I CAN PURCHASE
IN THE CONVERSION?
A. The minimum number of shares is 25. The maximum number of shares that
may be purchased in the Conversion by any person currently is 10,000.
The maximum number of shares that may be purchased in the Conversion
by any
<PAGE>
person other than the ESOP, together with any associate or group of
persons acting in concert currently is 20,000 shares.
17. Q. ARE THE BOARD OF DIRECTORS AND MANAGEMENT OF COMMUNITY BANK BUYING A
SIGNIFICANT AMOUNT OF THE STOCK OF THE HOLDING COMPANY?
A. Directors and executive officers of the Bank are expected to subscribe
for 110,000 shares. The purchase price paid by directors and
executive officers will be the same $10.00 per share price as that
paid by all other persons who order stock in the Subscription, Direct
Community and Syndicated Community Offerings.
18. Q. HOW DO I SUBSCRIBE FOR SHARES OF STOCK?
A. To subscribe for shares of stock in the Subscription Offering, you
should send or deliver a stock order form together with full payment
(or appropriate instructions for withdrawal from permitted deposit
accounts as described below) to Community Bank in the postage-paid
envelope provided, so that the stock order form and payment or
withdrawal authorization instructions are received prior to the close
of the Subscription Offering, which will terminate at noon, Central
Time, on September __, 1996, unless extended. Payment for shares may
be made in cash (if made in person) or by check or money order.
Subscribers who have deposit accounts with Community Bank may include
instructions on the stock order form requesting withdrawal from such
deposit account(s) to purchase shares of CBES Bancorp, Inc.
Withdrawals from certificates of deposit may be made without incurring
an early withdrawal penalty. If shares remain available for sale
after the expiration of the Subscription Offering, they may be offered
in the Direct Community Offering, which will begin as soon as
practicable after the end of the Subscription Offering. Persons who
wish to order stock in the Direct Community Offering should return
their stock order form as soon as possible after the Direct Community
Offering begins because it may terminate at any time after it begins.
Members of the general public should contact the Stock Information
Center at (816) ________ for additional information.
19. Q. MAY I USE FUNDS IN A RETIREMENT ACCOUNT TO PURCHASE STOCK?
A. Yes. If you are interested in using funds held in your retirement
account at Community Bank, the Stock Information Center can assist you
in transferring those funds to a self-directed IRA, if necessary, and
directing the trustee to purchase the stock. This process may be done
without an early withdrawal penalty and generally without a negative
tax consequence to your retirement account. Due to the additional
paperwork involved, IRA transfers must be completed by September __,
1996. For additional information, call the Stock Information Center
at (816) __________.
20. Q. WILL I RECEIVE INTEREST ON FUNDS I SUBMIT FOR A STOCK PURCHASE?
A. Yes. Community Bank will pay interest at its passbook rate from the
date the funds are received until completion of the stock offering or
termination of the Conversion. All funds authorized for withdrawal
from deposit accounts with Community Bank will continue to earn
interest at the contractual rate until the
<PAGE>
date of the completion of the Conversion.
21. Q. MAY I OBTAIN A LOAN FROM COMMUNITY BANK TO PAY FOR SHARES PURCHASED IN
THE CONVERSION?
A. No. Federal regulations prohibit Community Bank from making loans for
this purpose. However, federal regulations do not prohibit you from
obtaining a loan from another source for the purpose of purchasing
stock in the Conversion.
22. Q. IF I BUY STOCK IN THE CONVERSION, HOW WOULD I GO ABOUT BUYING
ADDITIONAL SHARES OR SELLING SHARES IN THE AFTERMARKET?
A. CBES Bancorp, Inc., as a newly organized company, has never issued
capital stock, and consequently there is no established market for its
common stock at this time. CBES Bancorp, Inc. has received approval
to have the Common Stock quoted on the Nasdaq SmallCap Market under
the symbol "CBES."
23. Q. WHAT IS THE HOLDING COMPANY'S DIVIDEND POLICY?
A. The Board of Directors of the Holding Company may consider a policy of
paying cash dividends. Dividends will be subject to determination and
declaration by the Board of Directors, which will take into account a
number of factors, including the operating results and financial
condition of the Holding Company, net worth and capital requirements
and regulatory restrictions on the payment of dividends by the Bank to
the Holding Company upon which dividends paid by the Holding Company
eventually will be primarily dependent. There can be no assurance
that dividends will in fact be paid on the Common Stock or that, if
paid, such dividends will not be reduced or eliminated in future
periods.
24. Q. WILL THE FDIC INSURE THE SHARES OF THE HOLDING COMPANY?
A. No. The shares of CBES Bancorp, Inc. are not savings deposits or
savings accounts and are not insured by the FDIC or any other
government agency.
25. Q. IF I SUBSCRIBE FOR SHARES AND LATER CHANGE MY MIND, WILL I BE ABLE TO
GET A REFUND?
A. No. Your order cannot be canceled or withdrawn once it has been
received by Community Bank without the consent of Community Bank.
ABOUT VOTING "FOR" THE PLAN OF CONVERSION
-----------------------------------------
26. Q. AM I ELIGIBLE TO VOTE AT THE SPECIAL MEETING OF MEMBERS TO BE HELD TO
CONSIDER THE PLAN OF CONVERSION?
A. You are eligible to vote at the Special Meeting of Members to be held
on September __, 1996 if you were a member of Community Bank at the
close of business on the Voting Record Date for the Special Meeting
(August __, 1996) and continue as such until the Special Meeting. If
you were a member on the Voting Record Date, you should have received
a proxy statement and a proxy card with which to vote.
<PAGE>
27. Q. HOW MANY VOTES DO I HAVE?
A. Each account holder is entitled to one vote for each $100, or fraction
thereof, on deposit in such account(s). Each borrower member is
entitled to cast one vote in addition to the number of votes, if any,
he or she is entitled to cast as an account holder. No member may
cast more than 1,000 votes.
28. Q. IF I VOTE "AGAINST" THE PLAN OF CONVERSION AND IT IS APPROVED, WILL I
BE PROHIBITED FROM BUYING STOCK DURING THE SUBSCRIPTION OFFERING?
A. No. Voting against the Plan of Conversion in no way restricts you
from purchasing CBES Bancorp, Inc. stock in the Subscription Offering.
29. Q. DID THE BOARD OF DIRECTORS OF COMMUNITY BANK UNANIMOUSLY ADOPT THE
CONVERSION?
A. Yes. Community Bank's Board of Directors unanimously adopted the Plan
of Conversion and urges that all members vote "FOR" approval of such
Plan.
30. Q. WHAT HAPPENS IF COMMUNITY BANK DOES NOT GET ENOUGH VOTES TO APPROVE
THE PLAN OF CONVERSION?
A. The Conversion would not take place, and Community Bank would remain a
mutual savings institution.
31. Q. AS A QUALIFYING DEPOSITOR OR BORROWER OF COMMUNITY BANK, AM I REQUIRED
TO VOTE?
A. No. However, failure to return your proxy card or otherwise vote will
have the same effect as a vote AGAINST the Plan of Conversion.
32. Q. WHAT IS A PROXY CARD?
A. A proxy card gives you the ability to vote without attending the
Special Meeting in person. You may attend the meeting and vote, even
if you have returned your proxy card, if you choose to do so.
However, if you are unable to attend, you still are represented by
proxy. Previously executed proxies will not be used to vote for
approval of the Plan of Conversion, even if the respective members do
not execute another proxy or attend the Special Meeting and vote in
person.
33. Q. HOW CAN I GET FURTHER INFORMATION CONCERNING THE STOCK OFFERING?
A. You may call the Stock Information Center at (816) ________ for
further information or to request a copy of the Prospectus, a stock
order form, a proxy statement or a proxy card.
<PAGE>
THIS INFORMATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY CBES BANCORP, INC. COMMON STOCK. SUCH OFFERS AND SOLICITATIONS
MAY BE MADE ONLY BY MEANS OF THE PROSPECTUS. COPIES OF THE PROSPECTUS MAY BE
OBTAINED BY CALLING THE STOCK INFORMATION CENTER AT (816) ______________.
THE SHARES OF CBES BANCORP, INC. COMMON STOCK BEING OFFERED ARE NOT SAVINGS
OR DEPOSIT ACCOUNTS AND ARE NOT INSURED BY THE SAVINGS ASSOCIATION INSURANCE
FUND OF THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
<PAGE>
IV. Officer and Director Support Brochure
A. Explanation
An Officer and Director Brochure merely highlights in brochure form the
purchase commitments shown in the Prospectus. This information is included
with the Question and Answer brochure.
B. Method of Distribution
This information will be distributed in the same manner as the Question and
Answer brochure.
<PAGE>
PROPOSED MANAGEMENT AND DIRECTOR PURCHASES
<TABLE>
<CAPTION>
Shares of
Name Common Stock Amount($)
- ---- ------------ ---------
<S> <C> <C>
Robert McCrorey 20,000 200,000
President and
Chairman of the Board
Larry E. Hermreck 20,000 200,000
Chief Executive Officer
Edgar L. Radley 7,000 70,000
Director
Rodney G. Rounkles 6,000 60,000
Director
Cecil E. Lamb 6,000 60,000
Director
Richard N. Cox 20,000 200,000
Director
Robert L. Lalumondier 1,000 10,000
Director
Other Officers (8 persons) 30,000 300,000
Total executive officers 110,000 $1,100,000
======= ==========
and directors as a group
(15 persons)
</TABLE>
<PAGE>
V. IRA Mailing
A. Explanation
A special IRA mailing is proposed to be sent to all IRA customers of the
Bank in order to alert the customers that funds held in an IRA can be used
to purchase stock. Since this transaction is not as simple as designating
funds from a certificate of deposit like a normal stock purchase, this
letter informs the customer that this process is slightly more detailed and
involves a personal visit to the Bank.
B. Quantity
One IRA letter is proposed to be mailed to each IRA customer of the Bank.
These letters would be mailed following OTS approval for the conversion and
after each customer has received the initial mailing containing a Proxy
Statement and a Prospectus.
C. Example - See following page.
<PAGE>
Community Bank Letterhead
________, 1996
Dear Individual Retirement Account Participant:
As you know, Community Bank of Excelsior Springs, A Savings Bank is in the
process of converting from a federally chartered mutual savings bank to a
federally chartered stock savings bank and has formed CBES Bancorp, Inc. to
hold all of the stock of Community Bank (the "Conversion"). Through the
Conversion, certain current and former depositors and borrowers of Community
Bank have the opportunity to purchase shares of common stock of CBES Bancorp,
Inc. in a Subscription Offering. CBES Bancorp, Inc. currently is offering up
to 1,207,500 shares, subject to adjustment, of CBES Bancorp, Inc. at a price of
$10.00 per share.
As the holder of an individual retirement account ("IRA") at Community
Bank, you have an opportunity to become a shareholder in CBES Bancorp, Inc.
using funds being held in your IRA. If you desire to purchase shares of common
stock of CBES Bancorp, Inc. through your IRA, Community Bank can assist you in
self-directing those funds. This process can be done without an early
withdrawal penalty and generally without a negative tax consequence to your
retirement account.
If you are interested in receiving more information on self-directing your
IRA, please contact our Conversion Center at (816) __________. Because it may
take several days to process the necessary IRA forms, a response is requested by
_______, 1996 to accommodate your interest.
Sincerely,
Larry E. Hermreck
Chief Executive Officer
This letter is neither an offer to sell nor a solicitation of an offer to buy
CBES Bancorp, Inc. common stock. The offer is made only by the Prospectus, which
was recently mailed to you. THE SHARES OF CBES BANCORP, INC. COMMON STOCK ARE
NOT DEPOSITS AND WILL NOT BE INSURED BY THE FEDERAL DEPOSIT INSURANCE
---
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
<PAGE>
VI. Counter Cards and Lobby Posters
A. Explanation
Counter cards and lobby posters serve two purposes: (1) As a notice to
Community Bank's customers and members of the local community that the
stock sale is underway and (2) to remind the customers of the end of the
Subscription Offering. Trident has learned in the past that many people
forget the deadline for subscribing and therefore we suggest the use of
these simple reminders.
B. Quantity
Approximately 2 - 3 Counter cards will be used at teller windows and on
customer service representatives' desk.
Approximately 1 - 2 Lobby posters will be used at each office of Community
Bank
C. Example
D. Size
The counter card will be approximately 8 1/2" x 11".
The lobby poster will be approximately 16" x 20".
<PAGE>
C. POSTER
OR
COUNTER CARD
"TAKE STOCK IN OUR FUTURE"
"STOCK OFFERING MATERIALS
AVAILABLE HERE"
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
<PAGE>
VII. Statement Stuffers
A. Explanation
A statement stuffer will be used to further inform the customers of
Community Bank of the sale and to make them aware of the expiration.
B. Method of Distribution
Statement Stuffers will be inserted into account statement mailings during
the offering period.
C. Example
D. Size
Statement stuffers will be approximately 6" x 2 3/4".
<PAGE>
Statement Stuffer
________________________________________
STOCK OFFERING ENDS
SEPTEMBER __, 1996
________________________________________
<PAGE>
VIII. Invitations
A. Explanation
In order to educate the public about the stock offering, Trident suggests
holding several Community meetings in various locations. In an effort to
target a group of interested investors Trident requests that each Director
of the Bank submit a list of friends that he would like to invite to a
Community meeting.
Prospectuses are given to each prospect at the Community meeting.
B. Quantity and Method of Distribution
Each Director submits a list of their prospects. An invitation is mailed
to each director's prospect, if utilized.
<PAGE>
The Directors, Officers & Employees
of
Community Bank of Excelsior Springs, A Savings Bank
cordially invite you
to attend a brief presentation
regarding the stock offering
of CBES Bancorp, Inc.
Please join us at
Place
Address
on
Date
at Time
for hors d'oeuvres
R.S.V.P.
(816) _______________
Robert E. McCrorey, President and Chairman of the Board
Larry E. Hermreck, Chief Executive Officer
Edgar L. Radley, Director
Rodney G. Rounkles, Director
Cecil E. Lamb, Director
Richard N. Cox, Director
Robert L. Lalumondier, Director
<PAGE>
IX. Letters
A. Explanation
Once the application for conversion has been approved by the OTS, Trident
will send out a series of three letters to the Officer's and Director's
targeted prospects. These letters are used to help facilitate the
marketing effort to this group. All prospects will receive a Prospectus as
soon as they are available.
B. Method of Distribution
Each Director submits his list of prospects. Each prospect is sent the
series of three letters all during the Subscription Offering.
C. Examples
1. Introductory letter
2. A. Thank you letter
or
B. Sorry you were unable to attend letter
3. Final reminder letter
<PAGE>
Example 1
(Introductory Letter)
(Community Bank Letterhead)
August __, 1996
Name
Address
City, State, Zip
Dear ______________:
You have probably read recently in the newspaper that Community Bank of
Excelsior Springs, A Savings Bank will soon be converting from mutual to stock
form. This conversion is the biggest step in the history of Community Bank in
that it allows customers, community members, employees and directors the
opportunity to subscribe for stock in our new holding company - CBES Bancorp,
Inc.
I have enclosed a Prospectus and a stock order form which will allow you to
subscribe for shares and possibly become a charter stockholder of CBES Bancorp,
Inc. should you so desire. In addition, we will be holding several
presentations for friends of Community Bank in order to review the Conversion
and the merits of becoming a charter stockholder of CBES Bancorp, Inc. You
will receive an invitation shortly.
I hope that if you have any questions you will feel free to call me or
Community Bank's Stock Information Center at (816) ___________. I look forward
to seeing you at our presentation.
Sincerely,
Director
The shares of common stock offered in the conversion are not savings
accounts or deposits and will not be insured by the Federal Deposit Insurance
Corporation or any other government agency.
This is not an offer to sell or a solicitation of an offer to buy stock.
The offer will be made only by the Prospectus. There shall be no sale of stock
in any state in which any offer, solicitation of an offer or sale of stock would
be unlawful.
<PAGE>
Example 2A
(Thank You Letter)
(Community Bank Letterhead)
___________, 1996
Name
Address
City, State, Zip
Dear ______________:
On behalf of the Board of Directors and management of Community Bank of
Excelsior Springs, A Savings Bank, I would like to thank you for attending our
recent presentation regarding the stock offering of CBES Bancorp, Inc. We are
enthusiastic about the stock offering and look forward to completing the
Subscription Offering on _______, 1996.
I hope that you will join me in being a charter stockholder, and once again
thank you for your interest.
Sincerely,
Larry E. Hermreck
Chief Executive Officer
The shares of common stock offered in the conversion are not savings
accounts or deposits and will not be insured by the Federal Deposit Insurance
Corporation or any other government agency.
This is not an offer to sell or a solicitation of an offer to buy stock.
The offer will be made only by the Prospectus. There shall be no sale of stock
in any state in which any offer, solicitation of an offer or sale of stock would
be unlawful.
<PAGE>
Example 2B
(Sorry You Were Unable to Attend)
(Community Bank Letterhead)
____________, 1996
Name
Address
City, State, Zip
Dear ____________:
I am sorry you were unable to attend our recent presentation regarding
Community Bank's mutual to stock conversion. The Board of Directors and
management as a group are investing $1,100,000 of our own funds in CBES Bancorp,
Inc. We are enthusiastic about the stock offering and look forward to
completing the Subscription Offering on _______, 1996.
We have established a Stock Information Center to answer any questions
regarding the stock offering. Should you require any assistance between now and
_______, I encourage you either to stop by or call our Stock Information Center
at (816) _______________.
I hope you will join me in becoming a charter stockholder of CBES Bancorp,
Inc.
Sincerely,
Larry E. Hermreck
Chief Executive Officer
The shares of common stock offered in the conversion are not savings
accounts or deposits and will not be insured by the Federal Deposit Insurance
Corporation or any other government agency.
This is not an offer to sell or a solicitation of an offer to buy stock.
The offer will be made only by the Prospectus. There shall be no sale of stock
in any state in which any offer, solicitation of an offer or sale of stock would
be unlawful.
<PAGE>
Example 3
(Final Reminder Letter)
(Community Bank Letterhead)
________, 1996
Name
Address
City, State, Zip
Dear ________________:
Just a quick note to remind you that the deadline is quickly approaching
for purchasing stock in CBES Bancorp, Inc., the proposed holding company for
Community Bank of Excelsior Springs, A Savings Bank. I hope you will join me in
becoming a charter stockholder in what will be Missouri's newest publicly owned
financial institution holding company.
The deadline for subscribing for shares in the Subscription Offering is
September __, 1996. If you have any questions, I hope you will call our Stock
Information Center in Excelsior Springs at (816) _______________.
Once again, I look forward to having you join me as a stockholder of CBES
Bancorp, Inc.
Sincerely,
Larry E. Hermreck
Chief Executive Officer
The shares of common stock offered in the conversion are not savings
accounts or deposits and will not be insured by the Federal Deposit Insurance
Corporation or any other government agency.
This is not an offer to sell or a solicitation of an offer to buy stock.
The offer will be made only by the Prospectus. There shall be no sale of stock
in any state in which any offer, solicitation of an offer or sale of stock would
be unlawful.
<PAGE>
X. Proxy Reminder
A. Explanation
A proxy reminder is used when the majority of votes needed to adopt the
Plan of Conversion is still outstanding. The proxy reminder is mailed to
those "target vote" depositors who have not previously returned their
signed proxy.
The target vote depositors are determined by the conversion agent.
B. Example
C. Size
Proxy reminder is approximately 8 1/2" x 11".
<PAGE>
B. Example
________________________________________________________________________________
P R O X Y R E M I N D E R
COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK
YOUR VOTE ON OUR STOCK CONVERSION PLAN HAS NOT BEEN RECEIVED.
- --------- ---------------------
YOUR VOTE IS VERY IMPORTANT, PARTICULARLY SINCE FAILURE TO VOTE IS EQUIVALENT TO
- ---------------------------
VOTING AGAINST THE PLAN.
VOTING FOR CONVERSION WILL NOT AFFECT THE INSURANCE OF YOUR ACCOUNTS. DEPOSIT
ACCOUNTS WILL CONTINUE TO BE FEDERALLY INSURED UP THE APPLICABLE LIMITS.
YOU MAY PURCHASE STOCK IF YOU WISH, BUT VOTING DOES NOT OBLIGATE YOU TO BUY
STOCK.
PLEASE ACT PROMPTLY! SIGN THE ENCLOSED PROXY CARD AND MAIL, OR DELIVER, THE
----------------------------
PROXY CARD TO COMMUNITY BANK TODAY. PLEASE VOTE ALL PROXY CARDS RECEIVED.
---
WE RECOMMEND THAT YOU VOTE TO APPROVE THE PLAN OF CONVERSION. THANK YOU.
THE BOARD OF DIRECTORS AND MANAGEMENT OF
COMMUNITY BANK OF EXCELSIOR SPRINGS, A
SAVINGS BANK
________________________________________________________________________________
IF YOU RECENTLY MAILED THE PROXY,
PLEASE ACCEPT OUR THANKS AND DISREGARD THIS REQUEST.
FOR FURTHER INFORMATION CALL (816) _______.
<PAGE>
Exhibit 99.5
- - - CBES BANCORP, INC.
---------------------------------------
HOLDING COMPANY FOR COMMUNITY BANK OF
EXCELSIOR SPRINGS,A SAVINGS BANK.
- - - STOCK ORDER FORM
NOTE: Please read the Stock Order Form
Instructions and Guide on the back as
you complete this form.
DEADLINE: The Subscription Offering will expire at 3:00 pm, Excelsior Springs,
Missouri, on , 1996, unless extended.
(1) Number of Shares Subscription Price (2) Total Payment Due
X $10.00=
The minimum number of shares that may be subscribed for is 25 shares and the
maximum is 20,000, except for purchases by the Employee Stock Ownership Plan
of Community Bank of Excelsior Springs, A Savings Bank. ("Community Bank").
The maximum purchase limit is subject to possible change. See the Stock Order
Form Instructions and Guide on the back of this form and the Prospectus.
- -------------------------------------------------------------------------------
METHOD OF PAYMENT IMPORTANT PURCHASER INFORMATION
(3)[_] Enclosed is a check, (5)a[_] Check here if you were a depositor
bank draft or money of Community Bank on March 31, 1995
order made payable to (the Eligibility Record Date).
CBES Bancorp, Inc. in Enter information below for all
the amount of: deposit accounts that you had at
Cash can be Community Bank on March 31, 1995.
used only
$ if (5)b[_] Check here if you were a depositor
presented of Community Bank on June 30, 1996
in person (the Supplemental Eligibility
any Record Date). Enter information
Community below for all deposit accounts that
Bank you had at Community Bank on
office. June 30, 1996.
(4)[_] The undersigned (5)c[_] Check here if you were a borrower
authorizes withdrawal from Community Bank on , 1996
from this (these) (the Voting Record Date) or a
account(s) at depositor of Community Bank who did
Community Bank. Please not have a deposit on March 31, 1995
contact the Stock or , 1996. Enter information
Information Center below for all loan and deposit
prior to , 1996 accounts that you had at Community
if you wish to use Bank on , 1996 (the Voting
your Community Bank Record Date).
IRA for stock
purchase. (5)d[_] State in which you reside:_________
Account Number Amount Account Title Deposit Loan Account
- ---------------------------- (Names on Account Account Number
Accounts)
$
- ---------------------------- --------------------------------------------
$
- ---------------------------- --------------------------------------------
$
- ---------------------------- --------------------------------------------
Total Withdrawal
Amount $ --------------------------------------------
-----------
There is no penalty for early
withdrawals used for stock payment.
STOCK REGISTRATION (SEE BACK UNDER STOCK OWNERSHIP GUIDE)
<TABLE>
<CAPTION>
(6) Form of Stock Ownership:
<S> <C> <C> <C>
[_] Individual [_] Joint tenants with [_] Tenants in common [_] Uniform Transfer
right of survivorship to Minors
[_] Fiduciary (i.e., [_] Corporation or Partnership [_] Other ____________________________________
trust, estate, etc.)
</TABLE>
(7) Name(s) in which your stock is to be
registered (Please Print Clearly) Social Security No. or Tax ID No.
- -------------------------------------------------------------------------------
Name(s) continued
- -------------------------------------------------------------------------------
Street Address City County State Zip
Code
- -------------------------------------------------------------------------------
(8) Telephone Information Daytime Phone Evening Phone
( ) ( )
NASD AFFILIATION
(9) [_] Check here if you are a member of the National Association of Securities
Dealers, Inc. ("NASD"), a person associated with a NASD member, a member of
the immediate family of any such person to whose support such person
contributes, directly or indirectly, or the holder of an account in which a
NASD member or person associated with a NASD member has a beneficial interest.
To comply with conditions under which an exemption from the NASD's
Interpretation With Respect to Free-Riding and Withholding is available, you
agree, if you have checked the NASD Affiliation box: (i) that you are an
eligible purchaser in Community Bank's mutual to stock conversion, (ii) not to
sell, transfer or hypothecate the stock for a period of three months following
issuance, and (iii) to report this subscription in writing to the applicable
NASD member within one day of payment therefor.
ACKNOWLEDGMENT
(10) To be effective in the Subscription Offering, this fully completed Stock
Order Form must be actually received by Community Bank no later than 3:00 pm,
Excelsior Springs, Missouri on , 1996, unless extended; otherwise this
Stock Order Form and all subscription rights will be void. Completed Stock
Order Forms, together with the required payment or withdrawal authorization,
may be delivered to Community Bank's main office or may be mailed to the Post
Office Box indicated on the enclosed business reply envelope. All rights
exercisable hereunder are not transferable and shares purchased upon exercise
of such rights must be purchased for the account of the person exercising such
rights.
It is understood that this Stock Order Form will be accepted in accordance
with, and subject to, the terms and conditions of the Plan of Conversion
("Plan of Conversion") of Community Bank described in the accompanying
Prospectus. If the Plan of Conversion is not approved by the voting members of
Community Bank at a Special Meeting to be held on , 1996, or any
adjournment thereof, all orders will be cancelled and funds received as
payment, with accrued interest, will be returned promptly. The undersigned
agrees that after receipt by Community Bank, this Stock Order Form may not be
modified, withdrawn or cancelled (unless the Conversion is not completed
within 45 days of the completion of the Subscription Offering) without
Community Bank's consent and if authorization to withdraw from deposit
accounts at Community Bank has been given as payment for shares, the amount
authorized for withdrawal shall not otherwise be available for withdrawal by
the undersigned.
APPLICABLE FEDERAL REGULATIONS PROHIBIT ANY PERSON FROM TRANSFERRING OR
ENTERING INTO ANY AGREEMENT DIRECTLY OR INDIRECTLY TO TRANSFER THE LEGAL OR
BENEFICIAL OWNERSHIP OF CONVERSION SUBSCRIPTION RIGHTS, OR THE UNDERLYING
SECURITIES TO THE ACCOUNT OF ANOTHER. COMMUNITY BANK AND CBES BANCORP, INC.
WILL PURSUE ANY AND ALL LEGAL AND EQUITABLE REMEDIES IN THE EVENT THEY BECOME
AWARE OF THE TRANSFER OF CONVERSION SUBSCRIPTION RIGHTS AND WILL NOT HONOR
ORDERS KNOWN BY IT TO INVOLVE SUCH TRANSFER.
I ACKNOWLEDGE THAT THE COMMON STOCK OFFERED IS NOT A SAVINGS OR DEPOSIT
ACCOUNT AND IS NOT INSURED BY THE SAVINGS ASSOCIATION INSURANCE FUND, THE BANK
INSURANCE FUND, THE FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER
GOVERNMENT AGENCY, MAY LOSE VALUE AND IS NOT GUARANTEED BY THE HOLDING COMPANY
OR COMMUNITY BANK.
I ALSO ACKNOWLEDGE RECEIPT OF A PROSPECTUS DATED , 1996.
A VALID STOCK ORDER FORM MUST BE SIGNED AND DATED BELOW
Under penalty of perjury, I certify that the Social Security or Tax ID Number
and the information provided in this Stock Order Form are true, correct and
complete, that I am not subject to back-up withholding and that I am
purchasing for my own account and that there is no agreement or understanding
regarding the transfer of my subscription rights or the sale or transfer of
these shares and that I have received a copy of the Prospectus and am aware of
the risks associated with an investment in CBES Bancorp, Inc.
SIGNATURE(S)
(11)Signature Date Signature Date
- -------------------------------------- ---------------------------------------
FOR OFFICE USE ONLY
STOCK INFORMATION CENTER
Date Category # ______ COMMUNITY BANK OF EXCELSIOR SPRINGS
Received _ /_ /_ 1001 NORTH JESSE JAMES ROAD
Batch # _________ Deposit _________ EXCELSIOR SPRINGS, MISSOURI 64024
Order # _________ Date Input /_ / (816) -
<PAGE>
CBES BANCORP, INC.
- -------------------------------------------------------------------------------
SUBSCRIPTION OFFERING
STOCK ORDER FORM
INSTRUCTIONS AND GUIDE
- -------------------------------------------------------------------------------
- --------------------------------------------
STOCK OWNERSHIP GUIDE
- --------------------------------------------
INDIVIDUAL
Include the first name, middle initial and last name of the shareholder. Avoid
the use of two initials. Please omit words that do not affect ownership
rights, such as "Mrs.", "Mr.", "Dr.", "special account", "single person", etc.
JOINT TENANTS WITH RIGHT OF SURVIVORSHIP
Joint tenants with right of survivorship may be specified to identify two or
more owners. When stock is held by joint tenants with right of survivorship,
ownership is intended to pass automatically to the surviving joint tenant(s)
upon the death of any joint tenant. All parties must agree to the transfer or
sale of shares held by joint tenants.
TENANTS IN COMMON
Tenants in common may also be specified to identify two or more owners. When
stock is held by tenants in common, upon the death of one co-tenant, ownership
of the stock will be held by the surviving co-tenant(s) and by the heirs of
the deceased co-tenant. All parties must agree to the transfer or sale of
shares held by tenants in common.
UNIFORM TRANSFER TO MINORS
Stock may be held in the name of a custodian for a minor under the Uniform
Transfer to Minors Acts of each state. There may be only one custodian and one
minor designated on a stock certificate. The standard abbreviation for
Custodian is "CUST", while the Uniform Transfer to Minors Act is "Unif Tran
Min Act". Standard U.S. Postal Service state abbreviations should be used to
describe the appropriate state. For example, stock held by John Doe as
custodian for Susan Doe under the Missouri Uniform Transfer to Minors Act will
be abbreviated John Doe, CUST Susan Doe Unif Tran Min Act, MO (use minor's
social security number).
FIDUCIARIES
Information provided with respect to stock to be held in a fiduciary capacity
must contain the following:
* The name(s) of the fiduciary. If an individual, list the first name, middle
initial and last name. If a corporation, list the full corporate title
(name). If an individual and a corporation, list the corporation's title
before the individual.
* The fiduciary capacity, such as administrator, executor, personal
representative, conservator, trustee, committee, etc.
* A copy and description of the document governing the fiduciary
relationship, such as living trust agreement or court order. Without
documentation establishing a fiduciary relationship, your stock may not be
registered in a fiduciary capacity.
* The date of the document governing the relationship except that the date of
a trust created by a will need not be included in the description.
* The name of the maker, donor or testator and the name of the beneficiary.
An example of fiduciary ownership of stock in the case of a trust is: John
Doe, Trustee Under Agreement Dated 10-1-87 for Susan Doe.
You may mail your completed Stock Order Form in the envelope that has been
provided, or you may deliver your Stock Order Form to the main office of
Community Bank. In order to purchase stock in the Subscription Offering, your
Stock Order Form, properly completed, and payment in full (or withdrawal
authorization) at the Subscription Price of $10 per share must be received by
Community Bank no later than 3:00 pm, Excelsior Springs, Missouri Time, on
, 1996, unless such date is extended, or your Stock Order Form will become
void. Stock Order Forms shall be deemed received only upon actual receipt at
either banking office of Community Bank.
If you need further assistance, please call the Stock Information Center at
(816) . We will be pleased to help you with the completion of your Stock
Order Form or answer any questions you may have.
ITEM INSTRUCTIONS
ITEMS 1 AND 2--
Fill in the number of shares that you wish to purchase and the total payment
due. The amount due is determined by multiplying the number of shares
purchased by the Subscription Price of $10.00 per share. The minimum purchase
is 25 shares. The maximum purchase by any person (or persons exercising
Subscription Rights through a single account) or entity (other than Community
Bank's Employee Stock Ownership Plan), or persons acting in concert is 20,000
shares. In addition, no person, together with associates, or group of persons
acting in concert, shall purchase more than 5% of the number of shares sold in
the Conversion. The Board of Directors of Community Bank has the right to (i)
reduce the maximum purchase limitation to an amount not less than one percent
of the shares of common stock issued in the Conversion or (ii) increase the
maximum purchase limitation to an amount of up to five percent of the shares
of common stock issued in the Conversion. Any change in the maximum purchase
limitation may occur at any time prior to consummation of the Conversion,
either before or after , 1996. If the maximum purchase limitation is
increased, any subscriber who has subscribed for 20,000 shares, and certain
other large subscribers in the discretion of the Holding Company, will be
given the opportunity to increase their subscriptions up to the higher maximum
purchase limitation. The Holding Company and Community Bank reserve the right
to reject any order received in the Community Offering, in whole or in part.
The Holding Company and Community Bank also have the right to reject the order
of any subscriber who (i) submits false or misleading information on a Stock
Order Form or otherwise, (ii) attempts to purchase shares in violation of the
Plan of Conversion or applicable law or (iii) fails to cooperate with attempts
to verify information with respect to purchase rights.
ITEM 3--
Payment for shares may be made in cash (only if delivered by you in person) or
by check, bank draft or money order made payable to CBES Bancorp, Inc. Your
funds will earn interest at the Community Bank current statement savings rate
until the Conversion is completed or terminated. DO NOT MAIL CASH TO PURCHASE
STOCK! Please check this box if your method of payment is by cash, check, bank
draft or money order.
ITEM 4--
If you pay for your stock by a withdrawal from a Community Bank deposit
account, insert the account number(s) and the amount of your withdrawal
authorization for each account. The total amount withdrawn should equal the
amount of your stock purchase. There will be no penalty assessed for early
withdrawals from certificate accounts used for stock purchases. This form of
payment may not be used if your account is an Individual Retirement Account.
If you wish to use your IRA currently at Community Bank, you must call the
Stock Information Center prior to , 1996 and complete all paperwork
required no later than , 1996.
ITEM 5--
a. Please check this box if you were a depositer of Community Bank on March
31, 1995 (the Eligibility Record Date). You must list the full title and
account numbers of all accounts you had on this date in order to insure proper
identification of your purchase rights and preferences.
b. Please check this box if you were a depositor of Community Bank on June 30,
1996 (the Supplemental Eligibility Record Date). You must list the full title
and account numbers of all accounts you had on this date in order to insure
proper identification of your purchase rights and preferences.
c. Please check this box if you are a borrower from Community Bank. If you
were a borrower from Community Bank on (the Voting Record Date), you
must list the name of all borrowers on your loan accounts and the loan account
number for all loan accounts that you had at such date in order to insure
proper identification of your purchase rights and preferences.
d. You must list the state in which you reside.
ITEMS 6, 7 AND 8--
The stock transfer industry has developed a uniform system of shareholder
registrations that we will use in the issuance of your common stock. Please
complete items 6, 7 and 8 as fully and accurately as possible, and be certain
to supply your social security number or tax identification number and your
daytime and evening telephone number(s). We will need to call you if we cannot
execute your order as given. If you have any questions or concerns regarding
the registration of your stock, please consult your legal advisor. Stock
ownership must be registered in one of the ways described under "Stock
Ownership Guide."
ITEM 9--
Please check this box if you are a member of the NASD or if this item
otherwise applies to you.
ITEMS 10 AND 11--
Please sign and date the Stock Order Form where indicated. Review the Stock
Order Form carefully before you sign, including the acknowledgement. Normally,
one signature is required. An additional signature is required only when
payment is to be made by withdrawal from a deposit account that requires
multiple signatures to withdraw funds. If you have any remaining questions, or
if you would like assistance in completing your Stock Order Form, you may call
the Stock Information Center. The Stock Information Center phone number is
(816) .
<PAGE>
CERTIFICATION FORM
(This Signed Form Must Accompany A Signed Stock Order Form)
I ACKNOWLEDGE THAT THE SHARES OF COMMON STOCK, $.01 PAR VALUE ("COMMON
STOCK"), OF CBES BANCORP, INC. (THE "CORPORATION"), THE PROPOSED HOLDING COMPANY
FOR COMMUNITY BANK OF EXCELSIOR SPRINGS, A SAVINGS BANK (THE "BANK"), ARE NOT
GUARANTEED BY THE CORPORATION, THE BANK OR THE FEDERAL GOVERNMENT.
If anyone asserts that this security is federal insured or guaranteed, or is
as safe as an insured deposit, I should call the Office of Thrift Supervision
Regional Director, Ronald Karr, at (312) 540-5900.
I further certify that, before purchasing the shares of Common Stock of the
Corporation, I received a copy of the Prospectus dated August xx, 1996 which
discloses the nature of the shares of Common Stock being offered thereby, and
describes the following risks involved in an investment in the Common Stock
under the heading "Risk Factors" beginning on page 13 of the Prospectus:
1. Construction and Land Lending
2. Geographical Concentration of Loans
3. Automobile Lending
4. Allowances for Loan Losses
5. Return on Equity After Conversion
6. Interest Rate Risk Exposure
7. Takeover Defensive Provisions
8. Regulatory Oversight
9. Recapitalization of SAIF, Disparity between BIF and SAIF Premiums
10. Pending Legislation Regarding Bad Debt Reserves
11. Risk of Delayed Offering
12. Absence of Active Market for Common Stock
13. Possible Consequences of Amendment to Plan of Conversion.
For a more detailed description of the risks involved in the offering, see
"Risk Factors" at pages xx through xx of the Prospectus.
Signature: __________________________
Signature: __________________________
(Note: If stock is to be held jointly, both parties must sign.)
----
Date: ___________________
3
