<PAGE>
As filed with the Securities and Exchange Commission on August 28, 1996
Registration No. 333-8461
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
Fulton Bancorp, Inc.
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(Exact name of registrant as specified in charter)
Delaware 6035 43-1754577
- ------------------ ------------------ -------------------
(State or other (Primary SICC No.) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
410 Market Street
Fulton, Missouri 65251
(573) 642-6618
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(Address and telephone number of principal executive offices)
Paul M. Aguggia, Esquire
Aaron M. Kaslow, Esquire
BREYER & AGUGGIA
Suite 470 East
1300 I Street, N.W.
Washington, D.C. 20005
------------------------------
(Name and address of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this registration statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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
statement 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 Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Cross Reference Sheet showing the location in the Prospectus
of the Items of Form S-1
<TABLE>
<CAPTION>
<S> <C> <C>
1. Forepart of the Registration Forepart of the Registration Statement;
Statement and Outside Front Outside Front Cover Page
Cover of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page; Outside Back
Cover Pages of Prospectus Cover Page
3. Summary Information, Risk Factors Prospectus Summary; Risk Factors
and Ratio of Earnings
to Fixed Charges
4. Use of Proceeds Use of Proceeds; Capitalization
5. Determination of Offering Price Market for Common Stock
Offering Price
6. Dilution *
7. Selling Security Holders *
8. Plan of Distribution The Conversion
9. Description of Securities to be Description of Capital Stock
Registered
10. Interests of Named Experts and Legal and Tax Opinions; Experts
Counsel
11. Information with Respect to the
Registrant
(a) Description of Business Business of the Holding Company;
Business of the Savings Bank
(b) Description of Property Business of the Savings Bank - Properties
(c) Legal Proceedings Business of the Savings Bank - Legal
Proceedings
(d) Market Price of and Dividends Outside Front Cover Page; Market for
on the Registrant's Common Equity Common Stock; Dividend Policy
and Related Stockholder Matters
(e) Financial Statements Financial Statements; Pro Forma Data
(f) Selected Financial Data Selected Financial and Other Data
(g) Supplementary Financial *
Information
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(h) Management's Discussion and Management's Discussion and Analysis of
Analysis of Financial Condition Financial Condition and Results of
and Results of Operations Operations
(i) Changes in and Disagreements *
with Accountants on Accounting
and Financial Disclosure
(j) Directors and Executive Management of the Holding Company; Management of
Officers the Savings Bank
(k) Executive Compensation Management of the Holding Company; Management of
the Savings Bank -- Benefits -- Executive Compensation
(l) Security Ownership of Certain *
Beneficial Owners and Management
(m) Certain Relationships and Management of the Savings Bank -- Transactions with
Related Transactions the Savings Bank
12. Disclosure of Commission Position Part II - Item 17
on Indemnification for Securities
Act Liabilities
</TABLE>
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*Item is omitted because answer is negative or item inapplicable.
<PAGE>
PROSPECTUS FULTON BANCORP, INC.
(Proposed Holding Company for Fulton Savings Bank, FSB)
Up to 1,495,000 Shares of Common Stock
Fulton Bancorp, Inc. (the "Holding Company"), a Delaware corporation, is
offering between 1,105,000 and 1,495,000 shares of its common stock, $.01 par
value per share (the "Common Stock"), in connection with the conversion of
Fulton Savings Bank, FSB (the "Savings Bank") from a federally chartered mutual
savings bank to a federally chartered capital stock savings bank and the
simultaneous issuance of the Savings Bank's capital stock to the Holding
Company. The simultaneous conversion of the Savings Bank to stock form, the
issuance of the Savings Bank's capital stock to the Holding Company and the
offer and sale of the Common Stock by the Holding Company are being undertaken
pursuant to a plan of conversion ("Plan" or "Plan of Conversion") and are
referred to herein as the "Conversion."
Pursuant to the Plan of Conversion, nontransferable rights to subscribe for
the Common Stock ("Subscription Rights") have been granted, in order of
priority, to (i) depositors with $50.00 or more on deposit at the Savings Bank
as of December 31, 1994 ("Eligible Account Holders"), (ii) the Savings Bank's
employee stock ownership plan ("ESOP"), a tax-qualified employee benefit plan,
(iii) depositors with $50.00 or more on deposit at the Savings Bank as of June
30, 1996 ("Supplemental Eligible Account Holders"), and (iv) depositors of the
Savings Bank as of September 3, 1996 ("Voting Record Date") and borrowers of the
Savings Bank with loans outstanding as of April 15, 1995 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
("Subscription Offering"). Subscription Rights are nontransferable. Persons
selling or otherwise transferring their rights to subscribe for Common Stock in
the Subscription Offering or subscribing for Common Stock on behalf of another
person will be subject to forfeiture of such rights and possible further
sanctions and penalties imposed by the Office of Thrift Supervision ("OTS") or
another agency of the U.S. Government. The Subscription Offering will expire at
4:30 p.m., Central Time, on ______, 1996 ("Expiration Date"), unless extended by
the Savings Bank and the Holding Company for up to __ days to ____________,
1996. Such extension may be granted without additional notice to subscribers.
See "THE CONVERSION -- The Subscription, Direct Community and Syndicated
Community Offerings" and "-- Limitations on Purchases of Shares."
FOR INFORMATION ON HOW TO SUBSCRIBE FOR SHARES OF COMMON STOCK, CALL THE
STOCK INFORMATION CENTER AT (573) 642-0215.
FOR A DISCUSSION OF CERTAIN RISKS THAT SHOULD BE CONSIDERED BY EACH
PROSPECTIVE INVESTOR, SEE "RISK FACTORS" BEGINNING ON PAGE 1.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR ACCOUNTS AND WILL NOT BE
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"), THE SAVINGS
ASSOCIATION INSURANCE FUND ("SAIF") OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC"), THE OTS, THE FDIC OR ANY OTHER FEDERAL AGENCY OR
ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC, THE OTS, THE FDIC OR ANY 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.
(cover continued on following page)
TRIDENT SECURITIES, INC.
The date of this Prospectus is , 1996.
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<PAGE>
<TABLE>
<S> <C> <C> <C>
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Estimated Underwriting
Purchase Commissions and Estimated Net
Price(1) Other Fees and Expenses(2) Proceeds
- ---------------------------------------------------------------------------------------------------------
Minimum Price Per Share..................... $10.00 $0.49 $9.51
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Midpoint Price Per Share.................... $10.00 $0.42 $9.58
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Maximum Price Per Share..................... $10.00 $0.36 $9.64
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Maximum Price Per Share, as adjusted (3).... $10.00 $0.32 $9.68
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Minimum Total(4)............................ $11,050,000 $542,000 $10,508,000
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Midpoint Total(5)........................... $13,000,000 $542,000 $12,458,000
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Maximum Total(6)............................ $14,950,000 $542,000 $14,408,000
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Maximum Total, as adjusted (3)(7)........... $17,192,500 $542,000 $16,650,500
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</TABLE>
(1) Determined in accordance with an independent appraisal prepared by RP
Financial, LC. ("RP Financial") as of July 12, 1996, which states that
the estimated aggregate pro forma market value of the Holding Company
and the Savings Bank as converted ranged from $11,050,000 to
$14,950,000, with a midpoint of $13,000,000 ("Estimated Valuation
Range"). RP Financial's appraisal is based upon estimates and
projections that are subject to change, and the valuation must not be
construed as a recommendation as to the advisability of purchasing
such shares or that a purchaser will thereafter be able to sell such
shares at or above the Purchase Price. See "THE CONVERSION -- Stock
Pricing and Number of Shares to be Issued."
(2) Includes estimated costs to the Holding Company and the Savings Bank
arising from the Conversion, including fees to be paid to Trident
Securities in connection with the Offerings. Such fees may be deemed
to be underwriting fees and Trident Securities may be deemed to be an
underwriter. The Holding Company and the Savings Bank have agreed to
indemnify Trident Securities against certain liabilities, including
liabilities that may arise under the Securities Act of 1933, as
amended ("Securities Act"). See "USE OF PROCEEDS" and "THE CONVERSION
-- Plan of Distribution for the Subscription, Direct Community and
Syndicated Community Offerings."
(3) Gives effect to the sale of up to an additional 15% of the shares
offered, without the resolicitation of subscribers or any right of
cancellation, due to an increase in the pro forma market value of the
Holding Company and the Savings Bank as converted. The ESOP shall
have a first priority right to subscribe for such additional shares up
to an aggregate of 8% of the Common Stock issued in the Conversion.
See "THE CONVERSION -- Stock Pricing and Number of Shares to be
Issued."
(4) Assumes the issuance of 1,105,000 shares at $10.00 per share.
(5) Assumes the issuance of 1,300,000 shares at $10.00 per share.
(6) Assumes the issuance of 1,495,000 shares at $10.00 per share.
(7) Assumes the issuance of 1,719,250 shares at $10.00 per share.
Any shares of Common Stock not subscribed for in the Subscription
Offering may be offered for sale to members of the general public through a
direct community offering ("Direct Community Offering") with preference
being given to natural persons and trusts of natural persons who are
permanent residents of Boone or Callaway Counties of Missouri ("Local
Community"), subject to the right of the Holding Company to accept or
reject orders in the Direct Community Offering in whole or in part. The
Direct Community Offering, if one is held, is expected to begin immediately
after the Expiration Date, but may begin at any time during the
Subscription Offering. The Direct Community Offering may terminate on or
after the Expiration Date, but not later than __________________, 1996 (or
__________________, 1996 if the Subscription Offering is fully extended),
unless further extended with the consent of the OTS. It is anticipated
that shares of Common Stock not subscribed for or purchased in the
Subscription and Direct Community Offerings will be offered to eligible
members of the general public on a best efforts basis by a selling group of
broker-dealers managed by Trident Securities, Inc. ("Trident Securities")
in a syndicated offering ("Syndicated Community Offering") (the
Subscription Offering, Direct Community Offering and Syndicated Community
Offering are referred to collectively as the "Offerings").
With the exception of the ESOP, which is expected to purchase 8% of
the shares of Common Stock issued in the Conversion, no person or entity
may purchase shares with an aggregate purchase price of more than
<PAGE>
$150,000 (or 15,000 shares based on the Purchase Price); and no person or
entity, together with associates of and persons acting in concert with such
person or entity, may purchase in the aggregate shares with an aggregate
purchase price of more than $200,000 (or 20,000 shares based on the
Purchase Price). Under certain circumstances, the maximum purchase
limitation may be increased or decreased at the sole discretion of the
Savings Bank and the Holding Company subject to any required regulatory
approval. See "THE CONVERSION -- The Subscription, Direct Community and
Syndicated Community Offerings," "-- Limitations on Purchases of Shares"
and "-- Procedure for Purchasing Shares in the Subscription and Direct
Community Offerings" for other purchase and sale limitations. The minimum
order is 25 shares.
The Holding Company must receive a properly completed and signed stock
order form and certification ("Order Form") along with full payment (or
appropriate instructions authorizing a withdrawal of the full payment from
a deposit account at the Savings Bank) of $10.00 per share for all shares
subscribed for or ordered. Funds so received will be placed in a
segregated account created for this purpose at the Savings Bank, and
interest will be paid at the Savings Bank's passbook rate from the date
payment is received until the Conversion is consummated or terminated;
these funds will be otherwise unavailable to the depositor until such time.
Payments authorized by withdrawals from deposit accounts will continue to
earn interest at the contractual rate until the Conversion is consummated
or terminated, although such funds will be unavailable for withdrawal until
the Conversion is consummated or terminated. ONCE TENDERED, SUBSCRIPTION
ORDERS CANNOT BE REVOKED OR MODIFIED WITHOUT THE CONSENT OF THE SAVINGS
BANK AND THE HOLDING COMPANY. The Holding Company is not obligated to
accept orders submitted on photocopied or telecopied Order Forms. If the
Conversion is not consummated within 45 days after the last day of the
Subscription Offering (which date will be no later than ________ __, 1996)
and the OTS consents to an extension of time to complete the Conversion,
subscribers will be given the right to increase, decrease or rescind their
orders. Such extensions may not go beyond ____________, 1998.
The Savings Bank and the Holding Company have engaged Trident
Securities as their financial advisor and sales agent to assist the Holding
Company in the sale of the Common Stock in the Offerings. In addition, in
the event the Common Stock is not fully subscribed for in the Subscription
and Direct Community Offerings, Trident Securities will manage the
Syndicated Community Offering. Neither Trident Securities nor any other
registered broker-dealer is obligated to take or purchase any shares of
Common Stock in the Offerings. The Holding Company and the Savings Bank
reserve the right, in their absolute discretion, to accept or reject, in
whole or in part, any or all orders in the Direct Community or Syndicated
Community Offerings either at the time of receipt of an order or as soon as
practicable following the termination of the Offerings. See "THE
CONVERSION -- Plan of Distribution for the Subscription, Direct Community
and Syndicated Community Offerings."
Prior to the Offerings, the Holding Company has not issued any capital
stock and accordingly there has been no market for the shares offered
hereby. There can be no assurance that an active and liquid trading market
for the Common Stock will develop or, if developed, will be maintained.
The Holding Company has received conditional approval to have its Common
Stock listed on the Nasdaq SmallCap Market under the symbol "____."
Trident Securities has agreed to act as a market maker for the Common Stock
following consummation of the Conversion. See "RISK FACTORS -- Absence of
Prior Market for the Common Stock" and "MARKET FOR COMMON STOCK."
<PAGE>
FULTON SAVINGS BANK, FSB
FULTON, MISSOURI
[Map of Missouri with enlargement of Callaway County appears here]
THE CONVERSION IS CONTINGENT UPON APPROVAL OF THE SAVINGS BANK'S PLAN OF
CONVERSION BY ITS ELIGIBLE VOTING MEMBERS, THE SALE OF AT LEAST 1,105,000
SHARES OF COMMON STOCK PURSUANT TO THE PLAN OF CONVERSION, AND RECEIPT OF
ALL REGULATORY APPROVALS.
<PAGE>
---------------------------------------------------------------------------
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR ACCOUNTS AND WILL NOT BE
INSURED OR GUARANTEED BY THE FDIC, THE SAIF OR ANY OTHER GOVERNMENT AGENCY.
---------------------------------------------------------------------------
PROSPECTUS SUMMARY
The information set forth below should be read in conjunction with and
is qualified in its entirety by the more detailed information and
Consolidated Financial Statements (including the Notes thereto) presented
elsewhere in this Prospectus. The purchase of Common Stock is subject to
certain risks. See "RISK FACTORS."
Fulton Bancorp, Inc.
The Holding Company is a Delaware corporation organized in May 1996 at
the direction of the Savings Bank to acquire all of the capital stock that
the Savings Bank will issue upon its conversion from the mutual to stock
form of ownership. The Holding Company has not engaged in any significant
business to date. The Holding Company has received the approval of the OTS
to become a savings and loan holding company and to acquire 100% of the
capital stock of the Savings Bank. Immediately following the Conversion,
the only significant assets of the Holding Company will be the capital
stock of the Savings Bank, that portion of the net proceeds of the
Offerings permitted by the OTS to be retained by the Holding Company and a
note receivable from the ESOP evidencing a loan from the Holding Company to
fund the Savings Bank's ESOP. The Holding Company has received approval
from the OTS to retain 50% of the net proceeds of the Offerings. Funds
retained by the Holding Company will be used for general business
activities, including a loan by the Holding Company directly to the ESOP to
enable the ESOP to purchase 8% of the Common Stock issued in the
Conversion. See "USE OF PROCEEDS." Upon Conversion, the Holding Company
will be classified as a unitary savings and loan holding company subject to
regulation by the OTS. See "REGULATION -- Savings and Loan Holding Company
Regulations." Management believes that the holding company structure and
retention of proceeds may facilitate the expansion and diversification of
its operations, should it decide to do so. The holding company structure
will also enable the Holding Company to repurchase its stock without
adverse tax consequences, subject to applicable regulatory restrictions and
waiting periods. There are no present plans, arrangements, agreements, or
understandings, written or oral, regarding any such activities or
repurchases. The main office of the Holding Company is located at 410
Market Street, Fulton, Missouri 65251, and its telephone number is (573)
642-6618.
Fulton Savings Bank, FSB
The Savings Bank, founded in 1912, is a federally chartered mutual
savings bank located in Fulton, Missouri. The Savings Bank amended its
charter from that of a state-chartered mutual savings bank to become a
federal mutual savings bank in April 1995. In connection with the
Conversion, the Savings Bank will convert to a federally chartered capital
stock savings bank and will become a subsidiary of the Holding Company.
The Savings Bank is regulated by the OTS, its primary federal regulator,
and the FDIC, the insurer of its deposits. The Savings Bank's deposits are
insured by the FDIC's Savings Association Insurance Fund ("SAIF") and have
been federally insured since 1965. The Savings Bank has been a member of
the Federal Home Loan Bank ("FHLB") System since 1942. At April 30, 1996,
the Savings Bank had total assets of $85.5 million, total deposits of $70.3
million and retained earnings of $9.1 million on a consolidated basis.
The Savings Bank is a community oriented financial institution that
engages primarily in the business of attracting deposits from the general
public and using those funds to originate residential and commercial
mortgage loans within the Savings Bank's market area. The Savings Bank
generally sells all of the fixed-rate and some of the adjustable-rate
residential mortgage loans that it originates while retaining the servicing
rights on such loans. At April 30, 1996, one- to four-family residential
mortgage loans totalled $46.7 million, or 59.6% of the Savings
(i)
<PAGE>
Bank's total gross loans. The Savings Bank also originates multi-family,
commercial real estate, construction, land and consumer and other loans.
The Savings Bank frequently sells participation interests in the non-
residential mortgage loans it originates. At April 30, 1996, multi-family
and commercial real estate loans accounted for 16.0% of the Savings Bank's
total gross loans, construction loans accounted for 9.8% of total gross
loans and consumer and other loans accounted for 12.7% of total gross
loans. The Savings Bank has a branch office located in Holts Summit,
Missouri. The main office of the Savings Bank is located at 410 Market
Street, Fulton, Missouri 65251, and its telephone number is (573) 642-6618.
The Conversion
The Savings Bank is in the process of converting from a federally
chartered mutual savings bank to a federally chartered capital stock
savings bank and, in connection with the Conversion, has formed the Holding
Company. As part of the Conversion, the Savings Bank will issue all of its
capital stock to the Holding Company in exchange for 50% of the net
proceeds of the Offerings. Simultaneously, the Holding Company will sell
its Common Stock in the Offerings. The Conversion is subject to the
approval of the OTS, as well as the Savings Bank's members at a special
meeting to be held on _______, 1996. After consummation of the Conversion,
depositors and borrowers of the Savings Bank will have no voting rights in
the Holding Company unless they become stockholders.
The Plan of Conversion requires that the aggregate purchase price of
the Common Stock to be issued in the Conversion be based upon an
independent appraisal of the estimated pro forma market value of the
Holding Company and the Savings Bank as converted. RP Financial has
advised the Savings Bank that in its opinion, at July 12, 1996, the
aggregate estimated pro forma market value of the Holding Company and the
Savings Bank as converted ranged from $11,050,000 to $14,950,000. The
appraisal of the pro forma market value of the Holding Company and the
Savings Bank as converted is based on a number of factors and should not be
considered a recommendation to buy shares of the Common Stock or any
assurance that after the Conversion shares of Common Stock will be able to
be resold at or above the Purchase Price. The appraisal will be updated or
confirmed prior to consummation of the Conversion.
The Board of Directors and management believe that the Conversion is
in the best interests of the Savings Bank's members and its communities.
The Conversion is intended: (i) to improve the competitive position of the
Savings Bank in its market area and support possible future expansion and
diversification of operations (currently, there are no specific plans,
arrangements or understandings, written or oral, regarding any such
activities); (ii) to afford members of the Savings Bank and others the
opportunity to become stockholders of the Holding Company and thereby
participate more directly in, and contribute to, any future growth of the
Holding Company and the Savings Bank; and (iii) to provide future access to
capital markets. See "THE CONVERSION."
The Subscription, Direct Community and Syndicated Community Offerings
The Holding Company is offering up to 1,495,000 shares of Common Stock
at $10.00 per share to holders of Subscription Rights in the following
order of priority: (i) Eligible Account Holders; (ii) the Savings Bank's
ESOP; (iii) Supplemental Eligible Account Holders; and (iv) Other Members.
In the event the number of shares offered in the Conversion is increased
above the maximum of the Estimated Valuation Range, the Savings Bank's ESOP
shall have a priority right to purchase any such shares exceeding the
maximum of the Estimated Valuation Range up to an aggregate of 8% of the
Common Stock issued in the Offerings. Once tendered, subscription orders
cannot be revoked or modified without the consent of the Savings Bank and
the Holding Company. Any shares of Common Stock not subscribed for in the
Subscription Offering may be offered in the Direct Community Offering to
the general public with preference being given to natural persons and
trusts of natural persons who are permanent residents of the Local
Community. The Savings Bank has engaged Trident Securities to consult with
and advise the Holding Company and the Savings Bank in the Offerings, and
Trident Securities has agreed to use its best efforts to assist the Holding
Company with the solicitation of subscriptions and purchase orders for
shares of Common Stock in the Offerings. Trident Securities is not
obligated to take or purchase any shares of Common Stock
(ii)
<PAGE>
in the Offerings. If all shares of Common Stock to be issued in the
Conversion are not sold through the Subscription and Direct Community
Offerings, then the Holding Company expects to offer the remaining shares
in a Syndicated Community Offering managed by Trident Securities, which
would occur as soon as practicable following the close of the Subscription
and Direct Community Offerings. All shares of Common Stock will be sold at
the same price per share in the Syndicated Community Offering as in the
Subscription and Direct Community Offerings. See "USE OF PROCEEDS," "PRO
FORMA DATA" and "THE CONVERSION -- Stock Pricing and Number of Shares to be
Issued." The Subscription Offering will expire at 4:30 p.m., Central Time,
on the Expiration Date, unless extended by the Savings Bank and the Holding
Company for up to ___ days. The Direct Community Offering and Syndicated
Community Offering, if any, may terminate on the Expiration Date or on any
date thereafter, however, in no event later than _________, 1996, unless
further extended with the consent of the OTS.
Benefits of the Conversion to Management
ESOP. In connection with the Conversion, the Savings Bank will adopt
the ESOP, a tax-qualified employee benefit plan for officers and employees
of the Holding Company and the Savings Bank, which intends to purchase 8%
of the shares of Common Stock issued in the Offerings (119,600 shares at
the maximum of the Estimated Valuation Range). In the event the number of
shares offered in the Conversion is increased above the maximum of the
Estimated Valuation Range, the Savings Bank's ESOP shall have a priority
right to purchase any such shares exceeding the maximum of the Estimated
Valuation Range up to an aggregate of 8% of the Common Stock issued in the
Offerings. In the event that the ESOP's subscription is not filled in its
entirety, the ESOP may purchase additional shares in the open market or may
purchase additional authorized but unissued shares with cash contributed to
it by the Savings Bank. For additional information concerning the ESOP,
see "MANAGEMENT OF THE SAVINGS BANK -- Benefits -- Employee Stock Ownership
Plan." As a result of the adoption of the ESOP, the Holding Company will
recognize compensation expense in an amount equal to the fair market value
of the ESOP shares when such shares are committed to be released to
participants' accounts. See "PRO FORMA DATA."
MRP. The Holding Company expects to seek approval of the Management
Recognition Plan and Trust ("MRP") at a meeting of stockholders occurring
no earlier than six months following consummation of the Conversion. The
MRP, which will be funded with a number of shares equal to 4% of the number
of shares issued in the Conversion, is a non-tax-qualified restricted stock
plan intended for the benefit of key employees and directors of the Holding
Company and the Savings Bank. If stockholder approval of the MRP is
obtained, it is expected that shares of Common Stock of the Holding Company
will be awarded pursuant to such plan to key employees and directors of the
Holding Company and the Savings Bank (which shares will be awarded at no
cost to such recipients). Subject to approval by stockholders and vesting
provisions, key employees and directors are initially intended to be
granted 59,800 restricted shares of Common Stock under the MRP (based on
the issuance of Common Stock at the maximum of the Estimated Valuation
Range), with an aggregate value of $598,000 based on the Purchase Price of
$10.00 per share. For additional information concerning the MRP, see
"MANAGEMENT OF THE SAVINGS BANK -- Benefits -- Management Recognition
Plan." As a result of the adoption of the MRP, the Holding Company will
recognize compensation expense in the amount of the fair market value of
the Common Stock at the date of the grant to the recipient during the years
in which the shares vest. See "PRO FORMA DATA."
Stock Option Plan. The Holding Company expects to seek approval of
the 1996 Stock Option Plan ("Stock Option Plan"), which will reserve a
number of shares equal to 10% of the number of shares issued in the
Conversion, at a meeting of stockholders occurring no earlier than six
months following consummation of the Conversion. If stockholder approval
of the Stock Option Plan is obtained, it is expected that options to
acquire up to 149,500 shares of Common Stock of the Holding Company will be
awarded to key employees and directors of the Holding Company and the
Savings Bank (based on the issuance of Common Stock at the maximum of the
Estimated Valuation Range). The exercise price of such options will be
100% of the fair market value of the Common Stock on the date the option is
granted. Options granted to officers and directors are valuable only to
the extent that such options are exercisable and the market price for the
underlying share of Common Stock is in excess of the exercise price. An
option effectively eliminates the market risk of holding the underlying
security since no consideration is paid for the option until it is
exercised. Therefore, the recipient may, within the limits of the term of
the option, wait to exercise
(iii)
<PAGE>
the option until the market price exceeds the exercise price. For
additional information concerning the Stock Option Plan, see "MANAGEMENT OF
THE SAVINGS BANK -- Benefits -- 1996 Stock Option Plan."
Employment Agreements. In connection with the Conversion, the Holding
Company and the Savings Bank have agreed to enter into employment
agreements with the Chief Executive Officer and certain members of
management that provide certain benefits in the event of their termination
following a change in control of the Holding Company or the Savings Bank.
Assuming a change of control occurred as of April 30, 1996, the aggregate
amount payable under these agreements would have been approximately
$452,000. See "MANAGEMENT OF THE SAVINGS BANK -- Executive Compensation --
Employment Agreements."
For information concerning the possible voting control of officers,
directors and employees following the Conversion, see "RISK FACTORS --
Anti-takeover Considerations -- Voting Control by Insiders."
Purchase Limitations
With the exception of the ESOP, which is expected to subscribe for 8%
of the shares of Common Stock issued in the Conversion, no person or entity
may purchase shares with an aggregate purchase price of more than $150,000
(or 15,000 shares based on the Purchase Price); and no person or entity,
together with associates of and persons acting in concert with such person
or entity, may purchase in the aggregate shares with an aggregate purchase
price of more than $200,000 (or 20,000 shares based on the Purchase Price).
This maximum purchase limitation may be increased or decreased as
consistent with OTS regulations in the sole discretion of the Holding
Company and the Savings Bank subject to any required regulatory approval.
The term "associate" of a person is defined in the Plan to mean: (i)
any corporation or organization (other than the Savings Bank or a majority-
owned subsidiary of the Savings Bank) of which such person is an officer or
partner or is, directly or indirectly, the beneficial owner of 10% 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 (excluding tax-
qualified employee plans); and (iii) any relative or spouse of such person,
or any relative of such spouse, who either has the same home as such person
or who is a director or officer of the Savings Bank or any of its parents
or subsidiaries. The term "acting in concert" is defined in the Plan to
mean: (i) knowing participation in a joint activity or interdependent
conscious parallel action towards a common goal whether or not pursuant to
an express agreement; or (ii) 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 arrangement,
whether written or otherwise. The Holding Company and the Savings Bank may
presume that certain persons are acting in concert based upon, among other
things, joint account relationships and the fact that such persons have
filed joint Schedules 13D with the SEC with respect to other companies.
The minimum purchase is 25 shares. In addition, stock orders received
either through the Direct Community Offering or the Syndicated Community
Offering, if held, may be accepted or rejected, in whole or in part, at the
discretion of the Holding Company and the Savings Bank. See "THE
CONVERSION -- Limitations on Purchases of Shares." If an order is rejected
in part, the purchaser does not have the right to cancel the remainder of
the order. In the event of an oversubscription, shares will be allocated
in accordance with the Plan of Conversion. See "THE CONVERSION -- The
Subscription, Direct Community and Syndicated Community Offerings."
Stock Pricing and Number of Shares to be Issued in the Conversion
The Purchase Price in the Subscription Offering is a uniform price for
all subscribers, including members of the Holding Company's and the Savings
Bank's Boards of Directors, their management and tax-qualified employee
plans, and was set by the Board of Directors. The number of shares to be
offered at the Purchase Price is based upon an independent appraisal of the
aggregate pro forma market value of the Holding Company and the Savings
Bank as converted. The aggregate pro forma market value was estimated by
RP Financial to range from $11,050,000 to $14,950,000 as of July 12, 1996.
See "THE CONVERSION -- Stock Pricing and Number of Shares to be Issued."
(iv)
<PAGE>
The appraisal of the pro forma value of the Holding Company and the Savings
Bank as converted will be updated or confirmed at the completion of the
Offerings. The maximum of the Estimated Valuation Range may be increased
by up to 15% and the number of shares of Common Stock to be issued in the
Conversion may be increased to 1,719,250 shares due to material changes in
the financial condition or performance of the Savings Bank or changes in
market conditions or general financial and economic conditions. 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 less than the minimum or more than
15% above the maximum of the current Estimated Valuation Range. The
appraisal is not intended to be and should not be construed as a
recommendation of any kind as to the advisability of purchasing Common
Stock in the Offerings nor can assurance be given that purchasers of the
Common Stock in the Offerings will be able to sell such shares after
consummation of the Conversion at a price that is equal to or above the
Purchase Price. Furthermore, the pro forma stockholders' equity is not
intended to represent the fair market value of the Common Stock and may be
greater than amounts that would be available for distribution to
stockholders in the event of liquidation.
Use of Proceeds
The net proceeds from the sale of the Common Stock are estimated to
range from $10.5 million to $13.9 million, or to $16.7 million if the
Estimated Valuation Range is increased by 15%, depending upon the number of
shares sold and the expenses of the Conversion. The Holding Company has
received the approval of the OTS to purchase all of the capital stock of
the Savings Bank to be issued in the Conversion in exchange for 50% of the
net proceeds of the Offerings. This will result in the Holding Company
retaining approximately $5.3 million to $6.9 million of the net proceeds,
or up to $8.3 million if the Estimated Valuation Range is increased by 15%,
and the Savings Bank receiving an equal amount.
Receipt of 50% of the net proceeds of the sale of the Common Stock
will increase the Savings Bank's capital and will support the expansion of
the Savings Bank's existing business activities. The Savings Bank will use
the funds contributed to it for general corporate purposes, including
increased local lending. The Savings Bank may also use a portion of the
funds contributed to it to retire outstanding FHLB advances. Pending
deployment of funds, the Savings Bank plans initially to invest the net
proceeds in short- to intermediate-term U.S. Treasury and agency securities
with laddered maturities up to two years. Shares of Common Stock may be
purchased with funds on deposit at the Savings Bank, which will reduce
deposits by the amounts of such purchases. As a result, the net amount of
funds available to the Savings Bank for investment following receipt of the
Conversion proceeds will be reduced by the amount of deposit withdrawals
used to fund stock purchases.
A portion of the net proceeds retained by the Holding Company will be
used for a loan by the Holding Company to the Savings Bank's ESOP to enable
it to purchase 8% of the shares of Common Stock issued in the Conversion.
Such loan would fund the entire purchase price of the ESOP shares
($1,196,000 at the maximum of the Estimated Valuation Range) and would be
repaid principally from the Savings Bank's contributions to the ESOP and
from dividends payable on the Common Stock held by the ESOP. The Holding
Company expects to lend a portion of the net proceeds retained by it to the
Savings Bank to be utilized for general corporate purposes, including
increased local lending. The remaining proceeds retained by the Holding
Company initially will be invested in cash and equivalents and short- to
intermediate-term U.S. Government and agency securities with laddered
maturities up to two years. Such proceeds will be available for additional
contributions to the Savings Bank in the form of debt or equity, to support
future growth and diversification activities, as a source of dividends to
the stockholders of the Holding Company and for future repurchases of
Common Stock (including possible repurchases to fund the MRP or to provide
shares to be issued upon exercise of stock options) to the extent permitted
under Delaware law and OTS regulations. Currently, as discussed below
under "USE OF PROCEEDS," there are no specific plans, arrangements,
agreements or understandings, written or oral, regarding any of such
activities.
(v)
<PAGE>
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. The
Holding Company has received conditional approval to have the Common Stock
listed on the Nasdaq SmallCap Market under the symbol "______." Trident
Securities has agreed to act as a market maker for the Holding Company's
Common Stock following consummation of the Conversion. No assurance can be
given that an active and liquid trading market for the Common Stock will
develop. Further, no assurance can be given that purchasers will be able
to sell their shares at or above the Purchase Price after the Conversion.
See "RISK FACTORS -- Absence of Prior Market for the Common Stock" and
"MARKET FOR COMMON STOCK."
Dividends
The Board of Directors of the Holding Company intends to adopt a
policy of paying regular cash dividends following consummation of the
Conversion. However, no decision has been made as to the amount or timing
of such dividends. Declarations and payments of dividends by the Board of
Directors will depend upon a number of factors, including the amount of the
net proceeds retained by the Holding Company, capital requirements,
regulatory limitations, the Savings Bank's and the Holding Company's
financial condition and results of operations, tax considerations and
general economic conditions. In order to pay such cash dividends, however,
the Holding Company must have available cash either from the net proceeds
raised in the Offerings and retained by the Holding Company, dividends
received from the Savings Bank or earnings on Holding Company assets. In
addition, from time to time in an effort to manage capital to a reasonable
level, the Board of Directors may determine to pay periodic special cash
dividends. Periodic special cash dividends, if paid, may be paid in
addition to, or in lieu of, regular cash dividends. As with regular cash
dividends, there can be no assurance that periodic special cash dividends
will be paid or that, if paid, will continue to be paid. There are certain
limitations on the payment of dividends from the Savings Bank to the
Holding Company. See "REGULATION -- Federal Regulation of Savings
Associations -- Limitations on Capital Distributions." No assurances can
be given that any dividends will be declared or, if declared, what the
amount of dividends will be or whether such dividends, once declared, will
continue. See "DIVIDEND POLICY."
Officers' and Directors' Common Stock Purchases and Beneficial Ownership
Officers and directors (including directors emeriti) of the Savings
Bank (11 persons) are expected to subscribe for an aggregate of
approximately 128,000 shares of Common Stock, or 11.6% and 8.6% of the
shares based on the minimum and the maximum of the Estimated Valuation
Range, respectively. See "SHARES TO BE PURCHASED BY MANAGEMENT PURSUANT TO
SUBSCRIPTION RIGHTS." In addition, purchases by the ESOP, allocations
under the MRP, and the exercise of stock options issued under the Stock
Option Plan, will increase the number of shares beneficially owned by
officers, directors and employees. Assuming (i) the receipt of stockholder
approval for the MRP and the Stock Option Plan, (ii) the open market
purchase of shares on behalf of the MRP, (iii) the purchase by the ESOP of
8% of the Common Stock sold in the Offerings, and (iv) the exercise of
stock options equal to 10% of the number of shares of Common Stock issued
in the Conversion, directors, officers and employees of the Holding Company
and the Savings Bank would have voting control, on a fully diluted basis,
of 30.5% and 27.8% of the Common Stock, based on the issuance of Common
Stock at the minimum and maximum of the Estimated Valuation Range,
respectively. See "RISK FACTORS -- Anti-takeover Considerations -- Voting
Control by Insiders." The MRP and Stock Option Plan are subject to
approval by the stockholders of the Holding Company at a meeting to be held
no earlier than six months following consummation of the Conversion.
Risk Factors
See "RISK FACTORS" beginning on page 1 for a discussion of certain
risks related to the Offerings that should be considered by all prospective
investors.
(vi)
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following tables set forth certain information concerning the
consolidated financial position and results of operations of the Savings
Bank and its subsidiaries at the dates and for the periods indicated. This
information is qualified in its entirety by reference to the detailed
information contained in the Consolidated Financial Statements and Notes
thereto presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
At April 30,
--------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in Thousands)
FINANCIAL CONDITION DATA:
<S> <C> <C> <C> <C> <C>
Total assets....................................... $85,496 $79,351 $73,620 $73,622 $72,345
Cash............................................... 2,924 4,189 5,322 8,152 10,434
U.S. Government and federal agency
obligations available for sale.................... 3,216 4,201 -- -- --
U.S. Government and federal agency
obligations held to maturity...................... -- -- 4,260 4,840 2,703
Mortgage-backed securities available for sale..... -- 1 -- -- --
Mortgage-backed securities held to maturity........ -- -- 1,196 1,689 1,986
Loans receivable, net.............................. 73,893 67,805 60,282 56,323 54,104
Loans held for sale................................ 2,306 574 -- -- 434
Deposits........................................... 70,316 65,205 64,630 65,235 64,870
FHLB advances...................................... 5,000 4,500 -- -- --
Retained earnings, substantially restricted....... 9,117 8,484 7,933 7,052 6,055
</TABLE>
<TABLE>
<CAPTION>
Year Ended April 30,
--------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in Thousands)
OPERATING DATA:
<S> <C> <C> <C> <C> <C>
Interest income.................................... $ 6,172 $ 5,355 $ 5,413 $ 5,997 $ 6,438
Interest expense................................... 3,781 2,944 2,671 3,345 4,066
------- ------- ------- ------- -------
Net interest income................................ 2,391 2,411 2,742 2,652 2,372
Provision for loan losses.......................... 44 118 48 160 201
------- ------- ------- ------- -------
Net interest income
after provision for loan losses.................. 2,347 2,293 2,694 2,492 2,171
Other income...................................... 485 360 413 426 393
Other expense..................................... 1,849 1,809 1,741 1,625 1,388
------- ------- ------- ------- -------
Income before income taxes........................ 983 844 1,366 1,293 1,176
Income taxes...................................... 363 301 485 505 457
------- ------- ------- ------- -------
Income before cumulative effect
of accounting change............................. 620 543 881 788 719
Cumulative effect of accounting change(1)......... -- -- -- 209 --
------- ------- ------- ------- -------
Net income........................................ $ 620 $ 543 $ 881 $ 997 $ 719
======= ======= ======= ======= =======
</TABLE>
- ----------
(1) Reflects adoption of SFAS 109, "Accounting for Income Taxes."
(vii)
<PAGE>
<TABLE>
<CAPTION>
At April 30,
--------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
OTHER DATA:
<S> <C> <C> <C> <C> <C>
Number of:
Real estate loans outstanding..................... 2,659 2,519 2,445 2,423 2,444
Deposit accounts.................................. 9,691 9,166 8,683 8,805 9,153
Full-service offices.............................. 2 2 2 2 2
</TABLE>
<TABLE>
<CAPTION>
At or For the Year Ended April 30,
--------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
KEY FINANCIAL RATIOS:
<S> <C> <C> <C> <C> <C>
Performance Ratios:
Return on assets(1)............................ 0.75% 0.72% 1.12% 1.07% 1.03%
Return on equity(2)............................ 7.00 6.55 11.92 12.13 12.58
Retained earnings to
assets(3)..................................... 10.70 10.93 10.06 8.82 8.21
Interest rate spread (4)....................... 2.60 2.96 3.58 3.39 3.18
Net interest margin(5)......................... 3.02 3.33 3.90 3.75 3.59
Average interest-earning assets
to average interest-bearing liabilities...... 108.84 109.15 108.64 107.71 106.64
Noninterest expense as a
percent of average total assets............... 2.23 2.39 2.37 2.21 2.00
Asset Quality Ratios:
Nonaccrual and 90 days or more
past due loans as a percent
of loans receivable, net..................... 0.43 0.23 1.53 0.44 1.72
Nonperforming assets as a
percent of total assets...................... 0.60 0.20 1.53 0.72 1.86
Allowance for losses as a
percent of gross loans receivable............ 1.05 1.11 1.09 1.26 1.17
Allowance for losses as a
percent of nonperforming loans............... 245.44 498.05 72.18 291.78 68.78
Net charge-offs to average
outstanding loans............................. 0.03 0.03 0.17 0.14 0.05
- ------------------
</TABLE>
(1) Net earnings divided by average total assets.
(2) Net earnings divided by average equity.
(3) Average retained earnings divided by average total assets.
(4) Difference between weighted average yield on interest-earning assets
and weighted average rate on interest-bearing liabilities.
(5) Net interest income as a percentage of average interest-earning assets.
(viii)
<PAGE>
RECENT DEVELOPMENTS
The following tables set forth selected financial condition data for the
Savings Bank at July 31, 1996 and April 30, 1996, selected operating data for
the Savings Bank for the three months ended July 31, 1996 and 1995 and selected
financial ratios for the Savings Bank at and for the three months ended July 31,
1996 and 1995. The selected financial and operating data and financial ratios
at and for the three months ended July 31, 1996 and 1995 are derived from the
unaudited consolidated financial statements of the Savings Bank, which, in the
opinion of management, reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation. This information should
be read in conjunction with the Consolidated Financial Statements and notes
thereto presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
At At
July 31, April 30,
1996 1996
------------ -----------
(Unaudited)
(In Thousands)
<S> <C> <C>
FINANCIAL CONDITION DATA:
Total assets................................. $90,384 $85,496
Cash......................................... 3,092 2,924
Investment securities available for sale..... 3,206 3,216
Loans receivable, net........................ 77,969 73,893
Loans held for sale.......................... 2,521 2,306
Deposits..................................... 71,605 70,316
FHLB advances................................ 8,000 5,000
Retained earnings, substantially restricted.. 9,337 9,117
</TABLE>
<TABLE>
<CAPTION>
Three Months
Ended July 31,
-------------------
1996 1995
------- -------
(Unaudited)
(In Thousands)
<S> <C> <C>
SELECTED OPERATING DATA:
Interest income.............................. $ 1,719 $ 1,473
Interest expense............................. 1,013 910
------- -------
Net interest income.......................... 706 563
Provision for loan losses.................... 25 --
------- -------
Net interest income after provision
for loan losses........................... 681 563
Other income................................. 162 109
Other expense................................ 482 445
------- -------
Income before income taxes................... 361 227
Income taxes................................. 132 83
------- -------
Net income................................... $ 229 $ 144
======= =======
</TABLE>
(ix)
<PAGE>
<TABLE>
<CAPTION>
At or For the
Three Months
Ended July 31,
------------------
1996 1995
------- ---------
<S> <C> <C>
KEY FINANCIAL RATIOS:
Performance Ratios:
Return on assets (1)(2)............................ 1.04% 0.71%
Return on equity (1)(3)............................ 9.92 6.69
Retained earnings to assets(4)..................... 10.49 10.66
Interest rate spread (1)(5)........................ 2.98 2.51
Net interest margin (1)(6)......................... 3.37 2.93
Average interest-earning assets to
average interest-bearing liabilities.............. 108.06 108.81
Noninterest expense as a
percent of average total assets (1)............... 2.19 2.21
Asset Quality Ratios:
Nonaccrual and 90 days or more past due loans
as a percent of loans receivable, net............. 0.36 0.09
Nonperforming assets as a percent of total assets.. 0.54 0.16
Allowance for losses as a percent of total assets.. 0.88 0.92
Allowance for losses as a percent of
nonperforming loans............................... 276.43 1,207.28
</TABLE>
- ------------------
(1) Ratios for the three-month periods are annualized.
(2) Net income divided by average total assets.
(3) Net income divided by average retained earnings.
(4) Average retained earnings divided by average total assets.
(5) Difference between weighted average yield on interest-earning assets and
weighted average rate on interest-bearing liabilities.
(6) Net interest income as a percentage of average interest-earning assets.
COMPARISON OF FINANCIAL CONDITION AT JULY 31, 1996 AND APRIL 30, 1996
The Savings Bank's total assets increased by $4.9 million to $90.4 million
at July 31, 1996 from $85.5 million at April 30, 1996. Cash and investment
securities increased slightly to $6.3 million at July 31, 1996 from $6.1 million
at April 30, 1996. Loans receivable increased by $4.1 million to $78.0 million
at July 31, 1996 from $73.9 million at April 30, 1996. The increase in the loan
portfolio was funded with FHLB advances, which increased to $8.0 million from
$5.0 million, and deposits, which increased $1.3 million to $71.6 million from
$70.3 million as the Savings Bank continued to price savings certificates more
aggressively.
Nonperforming loans decreased to $289,000, or 0.36% of net loans
receivable, at July 31, 1996 from $319,000, or 0.43% of net loans receivable, at
April 30, 1996. Real estate owned at July 31, 1996 remained unchanged from
April 30, 1996.
At July 31, 1996, the Savings Bank's tangible, core and risk-based capital
ratios were 10.32%, 10.32% and 17.75%, respectively. For definitions and
further information relating to the Savings Bank's regulatory capital
requirements, see "REGULATION -- Federal Regulation of Savings Associations --
Capital Requirements." See "HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE" for
the Savings Bank's capital levels at April 30, 1996 and pro forma capital levels
as a result of the Offerings.
(x)
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED JULY 31, 1996 AND
1995
NET INCOME. Net income increased $85,000, or 59.0%, to $229,000 for the
three months ended July 31, 1996 from $144,000 for the three months ended July
31, 1995. The increase in net income was primarily the result of increased net
interest income and the receipt of a liquidation payment from the Savings Bank's
data processor.
NET INTEREST INCOME. Net interest income increased by $143,000, or 25.4%,
to $706,000 for the three months ended July 31, 1996 from $563,000 for the three
months ended July 31, 1995. Interest income increased by $246,000 to $1.7
million for the three months ended July 31, 1996 from $1.5 million for the
comparable period in 1995. Interest income on loans increased by $304,000
between the periods while interest income on investment securities and interest-
bearing deposits decreased by $57,000. Interest income on loans increased as a
result of a larger average balance in 1996 and an increase in the average yield
on loans. Interest expense increased $103,000 to $1.0 million for the three
months ended July 31, 1996 from $910,000 for the comparable period in 1995.
Interest expense on FHLB advances increased $27,000 between the periods as a
result of a larger average balance during the three months ended July 31, 1996.
Interest expense on deposits increased $76,000, also as a result of a larger
average balance during the three months ended July 31, 1996. The Savings Bank's
interest rate spread increased to 2.98% for the three months ended July 31, 1996
from 2.51% for the three months ended July 31, 1995.
PROVISION FOR LOAN LOSSES. The Savings Bank's provision for loan losses
was $25,000 for the three months ended July 31, 1996. There was no provision
for loan losses during the three months ended July 31, 1995. The provision was
larger in 1996 because of the increase in the size of the loan portfolio.
Charge-offs during the three months ended July 31, 1996 totalled $9,000, while
recoveries totalled $2,000. Accordingly, the Savings Bank's allowance for loan
losses increased from $782,000, or 1.01% of total loans, at April 30, 1996 to
$800,000, or 0.98% of total loans, at July 31, 1996.
OTHER INCOME. Other income increased to $162,000 for the three months
ended July 31, 1996 from $109,000 for the three months ended July 31, 1995. The
increase was due to the receipt of a $41,000 payment in connection with the
liquidation of the Savings Bank's data processor and an increase of $12,000 in
service charges and other fees as a result of the growth of the loan servicing
portfolio.
OTHER EXPENSE. Other expense increased $37,000, or 8.3%, to $482,000 for
the three months ended July 31, 1996 from $445,000 for the three months ended
July 31, 1995. The increase was primarily the result of a $15,000 increase in
employee compensation and benefits expense and a $13,000 increase in occupancy
costs.
INCOME TAXES. The provision for income taxes increased to $132,000 for the
three months ended July 31, 1996 from $83,000 for the comparable period in 1995
as a result of higher taxable earnings.
(xi)
<PAGE>
RISK FACTORS
Before investing in shares of the Common Stock offered hereby,
prospective investors should carefully consider the matters presented
below, in addition to matters discussed elsewhere in this Prospectus.
Decrease in 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
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 because of the increase in consolidated equity of the
Holding Company that will result from the net proceeds of the Offerings.
See "SELECTED CONSOLIDATED FINANCIAL INFORMATION" for numerical information
regarding the Savings 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 MRP (see "PRO FORMA
DATA"), along with increased expenses associated with operating as a public
company, are expected to contribute initially to reduced return on equity.
The Savings Bank intends to deploy the net proceeds of the Offerings to
increase earnings 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 likely will
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.
Risks of Dependence on Local Economy
The Savings Bank has been and intends to continue to operate as a
community-oriented financial institution, with a focus on servicing
customers in Callaway and Boone, and to a lesser extent, Cole and Audrain
Counties, Missouri. Callaway and Boone Counties have an estimated combined
population of 159,000, of which 35,000 live in Callaway County. Although
the Savings Bank has experienced strong loan demand in recent years,
because the Savings Bank operates in a market area with a small population
and limited growth prospects, the Savings Bank's ability to achieve loan
and deposit growth may be limited. Future growth opportunities for the
Savings Bank depend largely on market area growth and the Savings Bank's
ability to compete effectively within its market area. At April 30, 1996,
most of the Savings Bank's loan portfolio consisted of loans made to
borrowers and collateralized by properties located in its market area. As
a result of this concentration, a downturn in the economy of the Savings
Bank's market area could increase the risk of loss associated with the
Savings Bank's loan portfolio.
Competition Within Market Area
The Savings Bank faces intense competition both in originating loans
and attracting deposits. The Savings Bank's competition comes primarily
from commercial banks and other savings institutions in the Savings Bank's
market area and, to a lesser extent, from credit unions and other financial
institutions. In recent years, the Savings Bank has experienced an
increased level of competition for deposits from securities firms,
insurance companies and other investment vehicles, such as money market and
mutual funds. This competition could adversely affect the Savings Bank's
future growth prospects.
Certain Lending Risks
Multi-family and commercial real estate lending has been a constant
part of the Savings Bank's lending strategy in recent years. For the year
ended April 30, 1996, the Savings Bank originated $4.5 of multi-family real
estate loans and $4.4 million of commercial real estate loans. All of the
properties securing these loans are located in Missouri. At April 30,
1996, the Savings Bank's loan portfolio included multi-family real estate
loans totalling $3.8 million, or 4.9% of total loans, and commercial real
estate loans totalling $8.7 million, or 11.1% of total loans. Multi-family
and commercial real estate loans are generally viewed as exposing the
lender to greater credit risk than one- to four-family residential loans
and typically involve higher loan principal amounts. Repayment of multi-
family
1
<PAGE>
and commercial real estate loans is dependent, in large part, on sufficient
income from the property to cover operating expenses and debt service.
Economic events and government regulations, which are outside the control
of the borrower or lender, could impact the value of the security for such
loans or the future cash flow of the affected properties. To reduce the
risk associated with such loans and to provide funds for lending
activities, the Savings Bank frequently sells participation interests in
the larger multi-family and commercial loans that it originates. The
Savings Bank retains the servicing rights on such loans and generally
retains 10% or 20% of the loan balance. During the year ended April 30,
1996, the Savings Bank sold $1.6 million of multi-family and $5.9 million
of commercial real estate loans. See "BUSINESS OF THE SAVINGS BANK --
Lending Activities."
At April 30, 1996, consumer and other loans totalled $9.9 million, or
12.7% of total gross loans. Consumer loans entail greater risk than do
residential mortgage loans, particularly in the case of consumer loans that
are unsecured or secured by rapidly depreciating assets such as
automobiles. In such cases, 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. The remaining deficiency often does not warrant
further substantial collection efforts against the borrower beyond
obtaining a deficiency judgment. In addition, consumer loan collections
are dependent on the borrower's continuing financial stability, and thus
are more likely to be adversely affected by job loss, divorce, illness or
personal bankruptcy. Furthermore, the application of various federal and
state laws, including federal and state bankruptcy and insolvency laws, may
limit the amount that can be recovered on such loans. At April 30, 1995,
the Savings Bank had no material delinquencies in its consumer loan
portfolio.
The Savings Bank also originates mortgage loans secured by non-owner-
occupied one- to four-family homes. At April 30, 1996, out of $46.7
million of loans secured by one- to four-family homes, loans secured by
non-owner-occupied residences totalled $19.5 million. Loans secured by
non-owner-occupied residences generally involve greater risks than loans
secured by owner-occupied residences. As with loans secured by multi-
family properties, payments on loans secured by non-owner-occupied
residences are often dependent on the successful operation or management of
the properties. Repayment of such loans may be subject to a greater extent
to adverse conditions in the local real estate market or the economy
generally.
Dependence on Key Personnel
Mr. Kermit D. Gohring, President of the Savings Bank has made
significant policy decisions and has been instrumental in implementing the
policies and procedures and directing the lending strategy of the Savings
Bank for over 32 years. The Board of Directors believes that the Savings
Bank's growth and profitability is dependent in large part upon the Savings
Bank's maintaining and furthering the lending relationships established by
management, especially Mr. Kermit Gohring. Although the Board of Directors
believes that the other officers of the Savings Bank are experienced and
fully capable, the loss of Mr. Kermit Gohring could have an adverse impact
on the operations of the Savings Bank. Neither the Savings Bank nor the
Holding Company has obtained, or expects to obtain, a "key man" life
insurance policy for Mr. Kermit Gohring. The Holding Company and the
Savings Bank intend to enter into a three-year employment agreement
with Mr. Gohring. See "MANAGEMENT OF THE SAVINGS BANK --Executive
Compensation --Employment Agreements." In addition, subject to the approval
of the MRP and Stock Option Plan at a meeting of stockholders occurring no
earlier than six months following consummation of the Conversion, the
Holding Company anticipates granting stock options and restricted stock to
Mr. Gohring. Such options and restricted stock grants will vest over a
period of five years in accordance with the terms of such plans. See
"MANAGEMENT OF THE SAVINGS BANK-- Benefits --1996 Stock Option Plan" and "
--Management Recognition Plan."
Potential Discouragement of Takeover Attempts
Provisions in the Holding Company's Governing Instruments and Delaware
and Federal Law. Certain provisions included in the Holding Company's
Certificate of Incorporation and in the Delaware General Corporation Law
("DGCL") might discourage potential proxy contests and other potential
takeover attempts, particularly those that have not been negotiated with
the Board of Directors. As a result, these provisions might preclude
takeover attempts that certain stockholders may deem to be in their best
interest and might tend to perpetuate existing management. These
provisions include, among other things, a provision limiting voting rights
of beneficial owners of more than 10% of the Common Stock, supermajority
voting requirements for certain business combinations, staggered terms for
directors, non-cumulative voting for directors, the removal of directors
without cause only upon the vote of holders of 80% of the outstanding
voting shares, limitations on the calling of special meetings, and specific
notice requirements for stockholder nominations and proposals. Certain
provisions of the Certificate of
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Incorporation of the Holding Company cannot be amended by stockholders
unless an 80% stockholder vote is obtained. The existence of these anti-
takeover provisions could result in the Holding Company being less
attractive to a potential acquiror and in stockholders receiving less for
their shares than otherwise might be available in the event of a takeover
attempt. Furthermore, federal regulations prohibit for three years after
consummation of the Conversion the ownership of more than 10% of the
Savings Bank or the 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. For a more detailed
discussion of these provisions, see "RESTRICTIONS ON ACQUISITION OF THE
HOLDING COMPANY."
Voting Control by Insiders. Directors (including directors emeriti)
and officers of the Savings Bank and the Holding Company expect to purchase
128,000 shares of Common Stock, or 11.6% and 8.6% of the shares issued in
the Offerings at the minimum and the maximum of the Estimated Valuation
Range, respectively. Directors and officers are also expected to control
indirectly the voting of approximately 8% of the shares of Common Stock
issued in the Conversion through the ESOP (assuming shares have been
allocated under the ESOP). Under the terms of the ESOP, the unallocated
shares will be voted by the ESOP trustees in the same proportion as the
votes cast by participants with respect to the allocated shares.
At a meeting of stockholders to be held no earlier than six months
following the consummation of the Conversion, the Holding Company expects
to seek approval of the Holding Company's MRP, which is a non-tax-qualified
restricted stock plan for the benefit of key employees and directors of the
Holding Company and the Savings Bank. Assuming the receipt of stockholder
approval, the Holding Company expects to acquire common stock of the
Holding Company on behalf of the MRP in an amount equal to 4% of the Common
Stock issued in the Conversion, or 44,200 and 59,800 shares at the minimum
and the maximum of the Estimated Valuation Range, respectively. These
shares will be acquired either through open market purchases or from
authorized but unissued shares of Common Stock. Under the terms of the
MRP, the MRP committee or the MRP trustees will have the power to vote
unallocated and unvested shares. The Holding Company also intends to seek
approval of the Stock Option Plan at a meeting of stockholders to be held
no earlier than six months following the consummation of the Conversion.
The Holding Company intends to reserve for future issuance pursuant to the
Stock Option Plan a number of authorized shares of Common Stock equal to
10% of the Common Stock issued in the Conversion (110,500 and 149,500
shares at the minimum and the maximum of the Estimated Valuation Range,
respectively).
Assuming (i) the receipt of stockholder approval for the MRP and the
Stock Option Plan, (ii) the open market purchase of shares on behalf of the
MRP, (iii) the purchase by the ESOP of 8% of the Common Stock sold in the
Offerings, and (iv) the exercise of stock options equal to 10% of the
number of shares of Common Stock issued in the Conversion, directors,
officers and employees of the Holding Company and the Savings Bank would
have voting control, on a fully diluted basis, of 30.5% and 27.8% of the
Common Stock, based on the issuance of Common Stock at the minimum and
maximum of the Estimated Valuation Range, respectively. Management's
potential voting control alone, as well as together with additional
stockholder support, might preclude or make more difficult takeover
attempts that certain stockholders deem to be in their best interest and
might tend to perpetuate existing management.
Severance Payments Upon Change in Control. The proposed employment
agreements with the Chief Executive Officer and certain members of
management provide for cash severance payments in the event of a change in
control of the Holding Company or the Savings Bank. Such agreements also
provide for the continuation of certain employee benefits following the
change in control. Assuming a change of control occurred as of April 30,
1996, the aggregate amounts payable under these agreements would have been
approximately $452,000. These provisions may have the effect of increasing
the cost of acquiring the Holding Company, thereby discouraging future
attempts to take over the Holding Company or the Savings Bank.
See "MANAGEMENT OF THE SAVINGS BANK -- Benefits," "DESCRIPTION OF
CAPITAL STOCK OF THE HOLDING COMPANY" and "RESTRICTIONS ON ACQUISITION OF
THE HOLDING COMPANY."
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Recapitalization of SAIF and its Impact on SAIF Premiums
Effective January 1, 1996, the FDIC substantially reduced deposit
insurance premiums for well-capitalized, well-managed financial
institutions that are members of the Bank Insurance Fund ("BIF"). Under
the new assessment schedule, approximately 92% of BIF members pay the
statutory minimum annual assessment of $2,000. With respect to SAIF member
institutions, the FDIC has retained the existing rate schedule of 23 to 31
basis points. The Savings Bank is, and after the Conversion will remain, a
member of the SAIF rather than the BIF. SAIF premiums may not be reduced
for several years because the SAIF has lower reserves than the BIF.
Because deposit insurance premiums are often a significant component of
noninterest expense for insured depository institutions, the reduction in
BIF premiums may place the Savings Bank at a competitive disadvantage since
BIF-insured institutions (such as most commercial banks) may be able to
offer more attractive loan rates, deposit rates, or both.
Proposed federal legislation would recapitalize the SAIF and resolve
the current premium disparity by requiring savings institutions like the
Savings Bank to pay a one-time assessment to increase SAIF's reserves to
$1.25 per $100 of deposits that is expected to be approximately 80 basis
points on the amount of deposits held by a SAIF-member institution. The
payment of a one-time fee would have the effect of immediately reducing the
capital and pre-tax earnings of SAIF-member institutions by the amount of
the fee. Based on the Savings Bank's assessable deposits of $68.6 million
at April 30, 1996, a one-time assessment of 80 basis points would equal
approximately $549,000 on a pre-tax basis, or $345,000 after tax. This
charge, if incurred, would represent, on a pro forma basis, a decrease in
book value per share at April 30, 1996 of $0.31 based upon the sale of
shares at the minimum of the Estimated Valuation Range and of $0.23 based
upon the sale of shares at the maximum of the Estimated Valuation Range.
Management cannot predict whether any legislation imposing such a fee will
be enacted, or, if enacted, the amount or timing of any one-time fee or
whether ongoing SAIF premiums will be reduced to a level equal to that of
BIF premiums. See "REGULATION."
Interest Rate Risk Exposure
The financial condition and operations of the Savings Bank, and of
savings institutions in general, are influenced significantly by general
economic conditions, by the related monetary and fiscal policies of the
federal government and by the regulations of the OTS and the FDIC. The
Savings Bank's profitability, like that of most financial institutions, is
dependent to a large extent on 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. At April 30, 1996, 79.5% of
the Savings Bank's total gross loans were adjustable-rate loans and 78.8%
of the Savings Bank's deposits were certificate accounts. The interest
earned by the Savings Bank on such loans and paid by the Savings Bank on
such accounts are significantly impacted by market interest rates.
Accordingly, the Savings Bank's results of operations are significantly
influenced by movements in market interest rates and the Savings Bank's
ability to manage its assets and liabilities in response to such movements.
As a result of the prevailing interest rate environment, during its three
most recent fiscal years, the Savings Bank has experienced a decrease in
its interest rate spread and net interest margin. The Savings Bank's
interest rate spread, which is the difference between the weighted average
yield on interest-earning assets and the weighted average rate on interest-
bearing liabilities, decreased from 3.58% for the year ended April 30, 1994
to 2.96% for the year ended April 30, 1995 to 2.60% for the year ended
April 30, 1996. Further changes in interest rates could result in further
decreases in the Savings Bank's interest rate spread, which would have an
adverse effect on the Savings Bank's net interest income. The Savings
Bank's net interest margin, which is net interest income as a percentage of
average interest-earning assets, decreased from 3.90% for the year ended
April 30, 1994 to 3.33% for the year ended April 30, 1995 to 3.02% for the
year ended April 30, 1996.
The Savings Bank will continue to be affected by general changes in
levels of interest rates and other economic factors beyond its control. To
better control the impact of changes in interest rates, the Savings Bank
has sought to improve the match between asset and liability maturities or
repricing periods and rates by emphasizing the origination of adjustable-
rate mortgage ("ARM") loans and shorter term consumer loans, offering
certificates of deposit with terms of up to six years and maintaining an
investment portfolio with laddered maturities of up to two
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years. At April 30, 1996, out of total gross loans of $78.4 million, the
Savings Bank had $62.3 million of ARM loans in its loan portfolio. The
Savings Bank's ARM loans contain periodic and lifetime interest rate
adjustment limits which, in a rising interest rate environment, may prevent
such loans from repricing to market interest rates. While management
anticipates that the Savings Bank's ARM loans will better offset the
adverse effects of an increase in interest rates as compared to fixed-rate
mortgages, the increased mortgage payments required of ARM borrowers in a
rising interest rate environment could potentially cause an increase in
delinquencies and defaults. The Savings Bank has not historically had an
increase in such delinquencies and defaults on ARM loans, but no assurance
can be given that such delinquencies or defaults would not occur in the
future. The marketability of the underlying property also may be adversely
affected in a high interest rate environment. Moreover, the Savings Bank's
ability to originate ARM loans may be affected by changes in the level of
interest rates and by market acceptance of the terms of such loans. For
further information regarding the Savings Bank's asset and liability
management, see "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- Asset and Liability Management."
Changes in the level of interest rates also affect the amount of loans
originated by the Savings Bank and, thus, the amount of loan and commitment
fees, as well as the market value of the Savings Bank's investment
securities and other interest-earning assets. Changes in interest rates
also can affect the average life of loans. Decreases in interest rates may
result in increased prepayments of loans, as borrowers refinance to reduce
borrowing costs. Under these circumstances, the Savings Bank is subject to
reinvestment risk to the extent that it is not able to reinvest such
prepayments at rates that are comparable to the rates on the maturing loans
or securities. Moreover, volatility in interest rates also can result in
disintermediation, or the flow of funds away from savings institutions into
direct investments, such as U.S. Government and corporate securities and
other investment vehicles which, because of the absence of federal
insurance premiums and reserve requirements, generally pay higher rates of
return than savings institutions.
The Savings Bank's results of operations are also dependent on loan
servicing fees. At April 30, 1996, 1995 and 1994, the Savings Bank
serviced $84.4 million, $73.8 million and $71.9 million, respectively, of
loans for others. Loan servicing fees for the years ended April 30, 1996,
1995 and 1994 totalled $281,000, $255,000 and $262,000, respectively. A
decreasing interest rate environment may result in a higher volume of
prepayments as borrowers refinance their loans, which may reduce the size
and adversely impact the income received from the loan servicing portfolio.
See "BUSINESS OF THE SAVINGS BANK -- Lending Activities -- Loan Servicing."
Absence of Active Market for the Common Stock
The Holding Company has never issued capital stock and, consequently,
there is no existing market for the Common Stock. Although the Holding
Company has received conditional approval to list the Common Stock on the
Nasdaq SmallCap Market under the symbol "____," 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 a minimum number of holders of record. While Trident
Securities has agreed to act as a market maker and will use its best
efforts to assist the Holding Company in encouraging another market maker
to establish and maintain a market in the Common Stock, there can be
assurance that another market maker will make a market in the Common Stock.
Making a market in securities involves maintaining bid and ask quotations
and being able, as principal, to effect transactions in reasonable
quantities at those quoted prices, subject to various securities laws and
other regulatory requirements. The development of a public trading market
depends upon the existence of willing buyers and sellers, the presence of
which is not within the control of the Holding Company, the Savings Bank or
any market maker. Accordingly, there can be no assurance that an active
and liquid trading market for the Common Stock will develop, or once
developed, will continue. Furthermore, 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."
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Possible Dilutive Effect of Benefit Programs
At a meeting to be held no earlier than six months following
consummation of the Conversion, the Holding Company intends to seek
stockholder approval of the MRP. If approved, the MRP intends to acquire
an amount of Common Stock of the Holding Company equal to 4% of the shares
issued in the Conversion. Such shares of Common Stock of the Holding
Company may be acquired by the Holding Company in the open market or from
authorized but unissued shares of Common Stock of the Holding Company. In
the event that the MRP acquires authorized but unissued shares of Common
Stock from the Holding Company, the voting interests of existing
stockholders will be diluted and net income per share and stockholders'
equity per share will be decreased. See "PRO FORMA DATA" and "MANAGEMENT
OF THE SAVINGS BANK -- Benefits -- Management Recognition Plan."
At a meeting to be held no earlier than six months following
consummation of the Conversion, the Holding Company intends to seek
stockholder approval of the Stock Option Plan. If approved, the Stock
Option Plan will provide for options for up to a number of shares of Common
Stock of the Holding Company equal to 10% of the shares issued in the
Conversion. Such shares may be authorized but unissued shares of Common
Stock of the Holding Company and, upon exercise of the options, will result
in the dilution of the voting interests of existing stockholders and may
decrease net income per share and stockholders' equity per share. See
"MANAGEMENT OF THE SAVINGS BANK -- Benefits -- 1996 Stock Option Plan."
If the ESOP is not able to purchase 8% of the shares of Common Stock
issued in the Offerings, the ESOP may purchase newly issued shares from the
Holding Company. In such event, the voting interests of existing
stockholders will be diluted and net income per share and stockholders'
equity per share will be decreased. See "MANAGEMENT OF THE SAVINGS BANK --
Benefits -- Employee Stock Ownership Plan."
Possible Adverse Income Tax Consequences of the Distribution of
Subscription Rights
If the Subscription Rights granted to Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members of the Savings Bank
are deemed to have an ascertainable value, receipt of such rights may be a
taxable event (either as capital gain or ordinary income) to those Eligible
Account Holders, Supplemental Eligible Account Holders or Other Members who
receive and/or exercise the Subscription Rights in an amount equal to such
value. Additionally, the Savings Bank could be required to recognize a
gain for tax purposes on such distribution. Whether Subscription Rights
are considered to have ascertainable value is an inherently factual
determination. The Savings Bank has been advised by RP Financial that such
rights have no value; however, RP Financial's conclusion is not binding on
the Internal Revenue Service ("IRS"). See "THE CONVERSION -- Effects of
Conversion to Stock Form on Depositors and Borrowers of the Savings Bank --
Tax Effects."
Potential Operational Restrictions Associated with Regulatory Oversight
The Savings 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 Savings Bank is a member of the FHLB System and is subject to
certain limited regulations promulgated by the Board of Governors of the
Federal Reserve System ("Federal Reserve"). As the holding company of the
Savings Bank, the Holding Company also will be subject to regulation and
oversight by the OTS. Such regulation and supervision govern 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 loan losses. 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 Savings Bank and their respective operations. See
"REGULATION." Legislation proposing a comprehensive reform of the banking
and thrift industries has recently been discussed in the United States
Congress. Under such
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legislation, (i) the BIF and the SAIF would be merged, at which time
thrifts and banks would pay the same deposit insurance premiums, (ii)
federal savings associations would be required to convert to a national
bank or a state-chartered bank or thrift, (iii) all savings and loan
holding companies would become bank holding companies and (iv) the OTS
would be merged with the Office of the Comptroller of the Currency. It is
uncertain when or if such legislation may be passed and, if passed, in what
form such legislation may be passed.
FULTON BANCORP, INC.
The Holding Company was organized as a Delaware corporation at the
direction of the Savings Bank in May 1996 to acquire all of the outstanding
capital stock of the Savings Bank to be issued in the Conversion. The
Holding Company has received the approval of the OTS to become a savings
and loan holding company and to acquire 100% of the capital stock of the
Savings Bank. Prior to the Conversion, the Holding Company will not engage
in any material operations. After the Conversion, the Holding Company will
be classified as a unitary savings and loan holding company subject to
regulation by the OTS, and its principal business will be the ownership of
the Savings Bank. Immediately following the Conversion, the only
significant assets of the Holding Company will be the capital stock of the
Savings Bank, that portion of the net proceeds of the Offerings to be
retained by the Holding Company and a note receivable from the ESOP
evidencing a loan from the Holding Company to fund the Savings Bank's ESOP.
See "BUSINESS OF THE HOLDING COMPANY."
The holding company structure will permit the Holding Company to
expand the financial services currently offered through the Savings Bank.
Management believes that the holding company structure and retention of a
portion of the proceeds of the Offerings will, should it decide to do so,
facilitate the expansion and diversification of its operations. The
holding company structure will also enable the Holding Company to
repurchase its stock without adverse tax consequences. There are no
present plans, arrangements, agreements, or understandings, written or
oral, regarding any such activities or repurchases. See "REGULATION --
Savings and Loan Holding Company Regulations."
FULTON SAVINGS BANK, FSB
The Savings Bank, founded in 1912, is a federally chartered mutual
savings bank located in Fulton, Missouri. The Savings Bank amended its
charter from that of a state-chartered mutual savings bank to become a
federal mutual savings bank in April 1995. In connection with the
Conversion, the Savings Bank will convert to a federally chartered capital
stock savings bank and will become a subsidiary of the Holding Company.
The Savings Bank is regulated by the OTS, its primary federal regulator,
and the FDIC, the insurer of its deposits. The Savings Bank's deposits are
insured by the SAIF and have been federally insured since 1965. The
Savings Bank has been a member of the FHLB System since 1942. At April 30,
1996, the Savings Bank had total assets of $85.5 million, total deposits of
$70.3 million and retained earnings of $9.1 million on a consolidated
basis.
The Savings Bank is a community oriented financial institution that
engages primarily in the business of attracting deposits from the general
public and using those funds to originate residential and commercial
mortgage loans within the Savings Bank's market area. The Savings Bank
generally sells all of the fixed-rate and some of the adjustable-rate
residential mortgage loans that it originates while retaining the servicing
rights on such loans. At April 30, 1996, one- to four-family residential
mortgage loans totalled $46.7 million, or 59.6% of the Savings Bank's total
gross loans. The Savings Bank also originates multi-family, commercial
real estate, construction, land and consumer and other loans. The Savings
Bank frequently sells participation interests in the non-residential
mortgage loans it originates. At April 30, 1996, multi-family and
commercial real estate loans accounted for 16.0% of the Savings Bank's
total gross loans, construction loans accounted for 9.8% of total gross
loans and consumer and other loans accounted for 12.7% of total gross
loans. The Savings Bank has a branch office located in Holts Summit,
Missouri.
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USE OF PROCEEDS
The net proceeds from the sale of the Common Stock offered hereby are
estimated to range from $10.5 million to $13.9 million, or up to $16.7
million if the Estimated Valuation Range is increased by 15%. See "PRO
FORMA DATA" for the assumptions used to arrive at such amounts. The
Holding Company has received the approval of the OTS to purchase all of the
capital stock of the Savings Bank to be issued in the Conversion in
exchange for 50% of the net proceeds of the Offerings. This will result in
the Holding Company retaining approximately $5.3 million to $6.9 million of
net proceeds, or up to $8.3 million if the Estimated Valuation Range is
increased by 15%, and the Savings Bank receiving an equal amount.
Receipt of 50% of the net proceeds of the sale of the Common Stock
will increase the Savings Bank's capital and will support the expansion of
the Savings Bank's existing business activities. The Savings Bank will use
the funds contributed to it for general corporate purposes, including
increased local lending. The Savings Bank may also use a portion of the
funds contributed to it to retire outstanding FHLB advances. Pending
deployment of funds, the Savings Bank plans initially to invest the net
proceeds in short- to intermediate-term U.S. Treasury and agency securities
with laddered maturities up to two years. Shares of Common Stock may be
purchased with funds on deposit at the Savings Bank, which will reduce
deposits by the amount of such purchases. As a result, the net amount of
funds available to the Savings Bank for investment following receipt of the
Conversion proceeds will be reduced by the amount of deposit withdrawals
used to fund stock purchases.
In connection with the Conversion and the establishment of the ESOP,
the Holding Company intends to loan the ESOP the amount necessary to
purchase 8% of the shares of Common Stock sold in the Conversion. The
Holding Company's loan to fund the ESOP may range from $884,000 to
$1,196,000 based on the sale of 88,400 shares to the ESOP (at the minimum
of the Estimated Valuation Range) and 119,600 shares (at the maximum of the
Estimated Valuation Range), respectively, at $10.00 per share. If 15%
above the maximum of the Estimated Valuation Range, or 1,719,250 shares,
are sold in the Conversion, the Holding Company's loan to the ESOP would be
approximately $1.4 million. It is anticipated that the ESOP loan will have
a ten-year term with interest payable at the prime rate as published in The
Wall Street Journal on the closing date of the Conversion. The loan will
be repaid principally from the Savings Bank's contributions to the ESOP and
from any dividends paid on shares of Common Stock held by the ESOP.
The Holding Company expects to lend a portion of the net proceeds to
the Savings Bank to be utilized for general corporate purposes, including
increased local lending. The remaining proceeds retained by the Holding
Company initially will be invested in cash and equivalents and short- to
intermediate-term U.S. Government and agency securities with laddered
maturities up to two years. Such proceeds will be available for additional
contributions to the Savings Bank in the form of debt or equity, to support
future diversification or acquisition activities, as a source of dividends
to the stockholders of the Holding Company and for future repurchases of
Common Stock to the extent permitted under Delaware law and federal
regulations. Currently, there are no specific plans, arrangements,
agreements or understandings, written or oral, regarding any
diversification activities.
Following consummation of the Conversion, the Board of Directors will
have the authority to adopt plans for repurchases of Common Stock or other
returns of capital to stockholders, subject to statutory and regulatory
requirements. Since the Holding Company has not yet issued stock, there
currently is insufficient information upon which an intention to repurchase
stock could be based. The facts and circumstances upon which the Board of
Directors may determine to repurchase stock in the future 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 and/or earnings per share of the remaining outstanding shares,
and the ability to improve 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
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circumstances in which repurchases would be in the best interests of the
Holding Company and its stockholders. Any stock repurchases or return of
capital will be subject to a determination by the Board of Directors that
both the Holding Company and the Savings Bank will be capitalized in excess
of all applicable regulatory requirements after any such repurchases or
return of capital and that capital will be adequate, taking into account,
among other things, the level of nonperforming and classified assets, the
Holding Company's and the Savings Bank's current and projected results of
operations and asset/liability structure, the economic environment and tax
and other regulatory considerations. See "THE CONVERSION -- Restrictions
on Repurchase of Stock."
DIVIDEND POLICY
General
The Board of Directors of the Holding Company intends to adopt a
policy of paying regular cash dividends following consummation of the
Conversion. However, no decision has been made as to the amount or timing
of such dividends. Declarations or payments of dividends will be subject
to determination by the Holding Company's Board of Directors, which will
take into account the amount of the net proceeds retained by the Holding
Company, the Holding Company's financial condition, results of operations,
tax considerations, capital requirements, industry standards, economic
conditions and other factors, including the regulatory restrictions that
affect the payment of dividends by the Savings Bank to the Holding Company
discussed below. In addition, from time to time in an effort to manage
capital to a reasonable level, the Board of Directors may determine to pay
periodic special cash dividends. Periodic special cash dividends, if paid,
may be paid in addition to, or in lieu of, regular cash dividends. Under
Delaware law, the Holding Company will be permitted to pay cash dividends
after the Conversion either out of surplus or, if there is no surplus, out
of net profits for the fiscal year in which the dividend is declared and/or
the preceding fiscal year. In order to pay such cash dividends, however,
the Holding Company must have available cash either from the net proceeds
raised in the Offerings and retained by the Holding Company, dividends
received from the Savings Bank or earnings on Holding Company assets. No
assurances can be given that any dividends, either regular or special, will
be declared or, if declared, what the amount of dividends will be or
whether such dividends, once declared, will continue.
Current Regulatory Restrictions
Dividends from the Holding Company may depend, in part, upon receipt
of dividends from the Savings Bank because the Holding Company initially
will have no source of income other than dividends from the Savings Bank
and earnings from the investment of the net proceeds from the Offerings
retained by the Holding Company. OTS regulations require the Savings Bank
to give the OTS 30 days' advance notice of any proposed declaration of
dividends to the Holding Company, and the OTS has the authority under its
supervisory powers to prohibit the payment of dividends to the Holding
Company. The OTS imposes certain limitations on the payment of dividends
from the Savings Bank to the Holding Company which utilizes a three-tiered
approach that permits various levels of distributions based primarily upon
a savings association's capital level. In addition, the Savings Bank may
not declare or pay a cash dividend on its capital stock if the effect
thereof would be to reduce the regulatory capital of the Savings Bank below
the amount required for the liquidation account to be established pursuant
to the Savings Bank's Plan of Conversion. See "REGULATION -- Federal
Regulation of Savings Associations -- Limitations on Capital
Distributions," "THE CONVERSION -- Effects of Conversion to Stock Form on
Depositors and Borrowers of the Savings Bank -- Liquidation Account" and
Note O of Notes to the Consolidated Financial Statements included elsewhere
herein.
The Savings Bank currently meets the criteria to be designated a Tier
1 association, as hereinafter defined, and consequently could at its option
(after prior notice to and no objection made by the OTS) distribute up to
100% of its net income during the calendar year plus 50% of its surplus
capital ratio at the beginning of the calendar year less any distributions
previously paid during the year.
9
<PAGE>
Tax Considerations
In addition to the foregoing, retained earnings of the Savings Bank
appropriated to bad debt reserves and deducted for federal income tax purposes
cannot be used by the Savings Bank to pay cash dividends to the Holding Company
without the payment of federal income taxes by the Savings Bank at the then
current income tax rate on the amount deemed distributed, which would include
the amount of any federal income taxes attributable to the distribution. See
"TAXATION -- Federal Taxation" and Note G of Notes to the Consolidated Financial
Statements included elsewhere herein. The Holding Company does not contemplate
any distribution by the Savings Bank that would result in a recapture of the
Savings Bank's bad debt reserve or create the above-mentioned federal tax
liabilities.
MARKET FOR COMMON STOCK
The Holding Company has never issued capital stock and, consequently, there
is no existing market for the Common Stock. Although the Holding Company has
received conditional approval to list the Common Stock on the Nasdaq SmallCap
Market under the symbol "____," 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 a minimum number
of record holders. Trident Securities has agreed to make a market for the
Holding Company's Common Stock following consummation of the Conversion and will
assist the Holding Company in seeking to encourage at least one additional
market maker to establish and maintain a market in the Common Stock. Making a
market involves maintaining bid and ask quotations and being able, as principal,
to effect transactions in reasonable quantities at those quoted prices, subject
to various securities laws and other regulatory requirements. While the Holding
Company has attempted to obtain commitments from broker-dealers to act as market
makers, and anticipates that prior to the completion of the Conversion it will
be able to obtain the commitment from at least one additional broker-dealer to
act as market maker for the Common Stock, there can be no assurance there will
be two or more market makers for the Common Stock. Additionally, the development
of a liquid public market depends on the existence of willing buyers and
sellers, the presence of which is not within the control of the Holding Company,
the Savings Bank or any market maker. There can be no assurance that an active
and liquid trading market for the Common Stock will develop or that, if
developed, it will continue. The number of active buyers and sellers of the
Common Stock at any particular time may be limited. Under such circumstances,
investors in the Common Stock could have difficulty disposing of their shares on
short notice and should not view the Common Stock as a short-term investment.
Furthermore, there can be no assurance that purchasers will be able to sell
their shares at or above the Purchase Price or that quotations will be available
on the Nasdaq SmallCap Market as contemplated.
10
<PAGE>
CAPITALIZATION
The following table presents the historical capitalization of the Savings
Bank at April 30, 1996, and the pro forma consolidated capitalization of the
Holding Company after giving effect to the assumptions set forth under "PRO
FORMA DATA," based on the sale of the number of shares of Common Stock set forth
below in the Conversion at the minimum, midpoint and maximum of the Estimated
Valuation Range, and based on the sale of 1,719,250 shares (representing the
shares that would be issued in the Conversion after giving effect to an
additional 15% increase in the maximum valuation in the Estimated Valuation
Range, subject to receipt of an updated appraisal confirming such valuation and
OTS approval). A change in the number of shares to be issued in the Conversion
may materially affect pro forma consolidation capitalization.
<TABLE>
<CAPTION>
Holding Company
ProForma Consolidated Capitalization
Based Upon the Sale of
---------------------------------------------------------------
1,105,000 1,300,000 1,495,000 1,719,250
Capitalization Shares at Shares at Shares at Shares at
as of $10.00 $10.00 $10.00 $10.00
April 30, 1996 Per Share(1) Per Share(1) Per Share(1) Per Share(1)
-------------- ------------ ------------ ------------ ------------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Deposits(3) $70,316 $70,316 $70,316 $70,316 $70,316
FHLB advances and other borrowings 5,000 5,000 5,000 5,000 5,000
------- ------- ------ ------ ------
Total deposits and
borrowed funds $75,316 $75,316 $75,316 $75,316 $75,316
======= ======= ======= ======= =======
Stockholders' equity:
Preferred stock:
1,000,000 shares, $.01
par value per share.
authorized; none issued
or outstanding $ -- $ -- $ -- $ -- $ --
Common Shock:
6,000,000 shares, $.01 par
value per share, authorized;
specified number of shares
assumed to be issued and
outstanding(4) -- 11 13 15 17
Additional paid-in-capital -- 10,497 12,445 14,393 16,633
Retained earnings(5) 9,117 9,117 9,117 9,117 9,117
Less:
Common Stock acquied
by ESOP(6) -- (884) (1,040) (1,196) (1,375)
Common Stock to be acquired
by MRP(7) -- (442) (520) (598) (688)
------- ------- ------- ------- -------
$ 9,117 $18,299 $20,015 $21,731 $23,704
======= ======= ======= ======= =======
</TABLE>
(footnotes on following page)
11
<PAGE>
- ----------------
(1) Does not reflect the possible increase in the Estimated Valuation Range to
reflect material changes in the financial condition or performance of the
Savings Bank or changes in market conditions or general financial and
economic conditions, or the issuance of additional shares under the Stock
Option Plan.
(2) This column represents the pro forma capitalization of the Holding Company
in the event the aggregate number of shares of Common Stock issued in the
Conversion is 15% above the maximum of the Estimated Valuation Range. See
"PRO FORMA DATA" and Footnote 1 thereto.
(3) Withdrawals from deposit accounts for the purchase of Common Stock are not
reflected. Such withdrawals will reduce pro forma deposits by the amounts
thereof.
(4) The Savings Bank's authorized capital will consist solely of 1,000 shares of
common stock, par value $1.00 per share, 1,000 shares of which will be
issued to the Holding Company, and 9,000 shares of preferred stock, no par
value per share, none of which will be issued in connection with the
Conversion.
(5) Retained earnings are substantially restricted by applicable regulatory
capital requirements. Additionally, the Savings Bank will be prohibited from
paying any dividend that would reduce its regulatory capital below the
amount in the liquidation account, which will be established for the benefit
of the Savings Bank's Eligible Account Holders and Supplemental Eligible
Account Holders at the time of the Conversion and adjusted downward
thereafter as such account holders reduce their balances or cease to be
depositors. See "THE CONVERSION -- Effects of Conversion to Stock Form on
Depositors and Borrowers of the Savings Bank -- Liquidation Account." Amount
shown does not reflect the possible payment of a one-time assessment to
recapitalize the SAIF. See "RISK FACTORS -- Recapitalization of SAIF and its
Impact on SAIF Premiums." Based on assessable deposits of $68.6 million at
April 30, 1996, the payment of a one-time assessment of 80 basis points
would reduce retained earnings by $345,000, after tax.
(6) Assumes that 8% of the Common Stock sold in the Conversion will be acquired
by the ESOP in the Conversion with funds borrowed from the Holding Company.
In accordance with generally accepted accounting principles ("GAAP"), the
amount of Common Stock to be purchased by the ESOP represents unearned
compensation and is, accordingly, reflected as a reduction of capital. As
shares are released to ESOP participants' accounts, a corresponding
reduction in the charge against capital will occur. Since the funds are
borrowed from the Holding Company, the borrowing will be eliminated in
consolidation and no liability will be reflected in the consolidated
financial statements of the Holding Company. See "MANAGEMENT OF THE SAVINGS
BANK -- Benefits -- Employee Stock Ownership Plan."
(7) Assumes the purchase in the open market at the Purchase Price, pursuant to
the proposed MRP, of a number of shares equal to 4% of the shares of Common
Stock issued in the Conversion at the minimum, midpoint, maximum and 15%
above the maximum of the Estimated Valuation Range. The issuance of an
additional 4% of the shares of Common Stock for the MRP from authorized but
unissued shares of Holding Company Common Stock would dilute the voting and
ownership interest of stockholders by 3.85%. The shares are reflected as a
reduction of stockholders' equity. See "RISK FACTORS -- Possible Dilutive
Effect of Benefit Programs." "PRO FORMA DATA" and "MANAGEMENT OF THE
SAVINGS BANK -- Benefits -- Management Recognition Plan." The MRP is subject
to stockholder approval, which is expected to be sought at a meeting to be
held no earlier than six months following consummation of the Conversion.
12
<PAGE>
HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE
The following table presents the Savings Bank's historical and pro forma
capital position relative to its capital requirements at April 30, 1996. The
amount of capital infused into the Savings Bank for purposes of the following
table is 50% of the net proceeds of the Offerings. For the purpose of the table
below, the amount expected to be borrowed by the ESOP and the cost of the shares
expected to be acquired by the MRP are deducted from pro forma regulatory
capital. For a discussion of the assumptions underlying the pro forma capital
calculations presented below, see "USE OF PROCEEDS," "CAPITALIZATION" and "PRO
FORMA DATA." The definitions of the terms used in the table are those provided
in the capital regulations issued by the OTS. For a discussion of the capital
standards applicable to the Savings Bank, see "REGULATION -- Federal Regulation
of Savings Associations -- Capital Requirements."
<TABLE>
<CAPTION>
April 30, 1996
-------------------
Percent of
Total
Amount Assets(1)
------ ---------
<S> <C> <C>
GAAP capital........................ $9,117 10.66%
Tangible capital.................... $9,096 10.64%
Tangible capital requirement........ 1,282 1.50
------ -----
Excess.............................. $7,814 9.14%
====== =====
Core capital........................ $9,096 10.64%
Core capital requirement(2)......... 2,564 3.00
------ -----
Excess.............................. $6,532 7.64%
====== =====
Total capital(3).................... $9,486 18.46%
Risk-based
capital requirement................ 4,111 8.00
------ -----
Excess.............................. $5,375 10.46%
====== =====
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA AT APRIL 30, 1996
------------------------------------------------------------------------------------------
15% above
Minimum of Estimated Midpoint of Estimated Maximum of Estimated Maximum of Estimated
Valuation Range Valuation Range Valuation Range Valuation Range
-------------------- --------------------- -------------------- --------------------
1,105,000 Shares 1,300,000 Shares 1,495,000 Shares 1,179,250 Shares
at $10.00 Per Share at $10.00 Per Share at $10.00 Per Share at $10.00 Per Share
-------------------- --------------------- -------------------- --------------------
Percent of Percent of Percent of Percent of
Total Total Total Total
Amount Assets(1) Amount Assets(1) Amount Assets(1) Amount Assets(1)
------ --------- ------ --------- ------ --------- ------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP capital........................ $13,045 14.45% $13,786 15.12% $14,527 15.77% $15,379 16.51%
Tangible capital.................... $13,024 14.43% $13,765 15.10% $14,506 15.75% $15,358 16.49%
Tangible capital requirement........ 1,354 1.50 1,368 1.50 1,381 1.50 1,397 1.50
------- ----- ------- ----- ------- ----- ------- -----
Excess.............................. $11,670 12.93% $12,397 13.60% $13,125 14.25% $13,961 14.99%
======= ===== ======= ===== ======= ===== ======= =====
Core capital........................ $13,024 14.43% $13,765 15.10% $14,506 15.75% $15,358 16.49%
Core capital requirement(2)......... 2,709 3.00 2,736 3.00 2,762 3.00 2,793 3.00
------- ----- ------- ----- ------- ----- ------- -----
Excess.............................. $10,315 11.43% $11,029 12.10% $11,744 12.75% $12,565 13.49%
======= ===== ======= ===== ======= ===== ======= =====
Total capital(3).................... $13,414 25.62% $14,155 26.95% $14,896 28.26% $15,748 29.76%
Risk-based
capital requirement................ 4,188 8.00 4,202 8.00 4,217 8.00 4,233 8.00
------- ----- ------- ----- ------- ----- ------- -----
Excess.............................. $ 9,226 17.62% $ 9,953 18.95% $10,679 20.26% $11,515 21.76%
======= ===== ======= ===== ======= ===== ======= =====
</TABLE>
- -----------------------------------
(1) Tangible capital levels are shown as a percentage of tangible assets. 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) The current OTS core capital requirement for savings associations is 3% of
total adjusted assets. The OTS has proposed core capital requirements
which would require a core capital ratio of 3% of total adjusted assets for
thrifts that receive the highest supervisory rating for safety and
soundness and a core capital ratio of 4% to 5% for all other thrifts.
(3) Percentage represents total core and supplementary capital divided by total
risk-weighted assets. Assumes net proceeds are invested in assets that
carry a 20% risk-weighting.
13
<PAGE>
PRO FORMA DATA
Under the Plan of Conversion, the Common Stock must be sold at a price
equal to the estimated pro forma market value of the Holding Company and the
Savings Bank as converted, based upon an independent valuation. The Estimated
Valuation Range as of July 12, 1996 is from a minimum of $11,050,000 to a
maximum of $14,950,000 with midpoint of $13,000,000 or, at a price per share of
$10.00, a minimum number of shares of 1,105,000, a maximum number of shares of
1,495,000 and a midpoint number of shares of 1,300,000. The actual net proceeds
from the sale of the Common Stock cannot be determined until the Conversion is
completed. However, net proceeds set forth on the following table are based upon
the following assumptions: (i) Trident Securities will receive a management fee
of $157,500; (ii) all of the Common Stock will be sold in the Subscription and
Direct Community Offerings; and (iii) Conversion expenses, excluding the fees
paid to Trident Securities, will total approximately $384,500. Actual expenses
may vary from this estimate, and the fees paid will depend upon the percentages
and total number of shares sold in the Subscription, Direct Community and
Syndicated Community Offerings and other factors.
The pro forma consolidated net income of the Savings Bank for the year
ended April 30, 1996 has been calculated as if the Conversion has been
consummated at the beginning of the period and the estimated net proceeds
received by the Holding Company and the Savings Bank had been invested at 6.40%
at the beginning of the period, which represents the arithmetic average of the
Savings Bank's yield on interest-earning assets and interest-bearing deposits as
of April 30, 1996. As discussed under "USE OF PROCEEDS," the Holding Company
expects to retain 50% of the net proceeds of the Offerings from which it will
fund the ESOP loan. A pro forma after-tax return of 4.02% is used for both the
Holding Company and the Savings Bank for the period, after giving effect to an
incremental combined federal and state tax rate of 37.12%. Historical and pro
forma per share amounts have been calculated by dividing historical and pro
forma amounts by the number of shares of Common Stock indicated in the footnotes
to the table. Per share amounts have been computed as if the Common Stock had
been outstanding at the beginning of the period or at April 30, 1996, but
without any adjustment of per share historical or pro forma stockholders' equity
to reflect the earnings on the estimated net proceeds.
The following table summarizes the historical net income and retained
earnings of the Savings Bank and the pro forma consolidated net income and
stockholders' equity of the Holding Company for the period and at the date
indicated, based on the minimum, midpoint and maximum of the Estimated Valuation
Range and based on a 15% increase in the maximum of the Estimated Valuation
Range. No effect has been given to: (i) the shares to be reserved for the
issuance under the Holding Company's Stock Option Plan, which is expected to be
voted upon by stockholders at a meeting to be held no earlier than six months
following consummation of the Conversion; (ii) withdrawals from deposit accounts
for the purpose of purchasing Common Stock in the Conversion; (iii) the issuance
of shares from authorized but unissued shares to the MRP, which is expected to
be voted upon by stockholders at a meeting to be held no earlier than six months
following consummation of the Conversion; or (iv) the establishment of a
liquidation account for the benefit of Eligible Account Holders and Supplemental
Eligible Account Holders. See "MANAGEMENT OF THE SAVINGS BANK--Benefits--1996
Stock Option Plan" and "THE CONVERSION--Stock Pricing and Number of Shares
Issued." Shares of Common Stock may be purchased with funds on deposit at the
Savings Bank, which will reduce deposits by the amounts of such purchases.
Accordingly, the net amount of funds available for investment will be reduced by
the amount of deposit withdrawals used to fund stock purchases.
The following pro forma information may not be representative of the
financial effects of the Conversion at the date on which the Conversion actually
occurs and should not be taken as indicative of future results of operations.
Stockholders' equity represents the difference between the stated amounts of
consolidated assets and liabilities of the Holding Company computed in
accordance with GAAP. Stockholders' equity has not been increased or decreased
to reflect the difference between the carrying value of loans and other assets
and market value. Stockholders' equity is not intended to represent fair market
value nor does it represent amounts that would be available for distribution to
stockholders in the event of liquidation.
14
<PAGE>
<TABLE>
<CAPTION>
At or For the Year Ended April 30, 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Minimum of Midpoint of Maximum of 15% Above
Estimated Estimated Estimated Maximum of
Valuation Valuation Valuation Estimated
Range Range Range Valuation Range
--------- --------- --------- ---------------
1,105,000 1,300,000 1,495,000 1,719,250(1)
Shares Shares Shares Shares
at $10.00 at $10.00 at $10.00 at $10.00
Per Share Per Share Per Share Per Share
--------- --------- --------- ---------
(In Thousands, Except Per Share Amounts)
Gross proceeds.................................. $11,050 $13,000 $14,950 $17,193
Less: estimated expenses........................ 542 542 542 542
------- ------- ------- -------
Estimated net proceeds.......................... 10,508 12,458 14,408 16,651
Less: Common Stock acquired by ESOP............ (884) (1,040) (1,196) (1,375)
Less: Common Stock to be acquired by MRP....... (442) (520) (598) (688)
------- ------- ------- -------
Net investable proceeds...................... $ 9,182 $10,898 $12,614 $14,587
======= ======= ======= =======
Consolidated net income:
Historical..................................... $ 620 $ 620 $ 620 $ 620
Pro forma income on net proceeds(2)............ 370 439 508 587
Pro forma ESOP adjustments(3).................. (56) (65) (75) (86)
Pro forma MRP adjustments(4)................... (56) (65) (75) (86)
------- ------- ------- -------
Pro forma net income......................... $ 878 $ 929 $ 978 $ 1,035
======= ======= ======= =======
Consolidated net income per share (5)(6):
Historical..................................... $ 0.60 $ 0.51 $ 0.45 $ 0.39
Pro forma income on net proceeds............... 0.36 0.36 0.37 0.37
Pro forma ESOP adjustments(3).................. (0.05) (0.05) (0.05) (0.05)
Pro forma MRP adjustments(4)................... (0.05) (0.05) (0.05) (0.05)
------- ------- ------- -------
Pro forma net income per share............... $ 0.86 $ 0.77 $ 0.72 $ 0.66
======= ======= ======= =======
Consolidated stockholders' equity (book value):
Historical..................................... $ 9,117 $ 9,117 $ 9,117 $ 9,117
Estimated net proceeds......................... 10,508 12,458 14,408 16,651
Less: Common Stock acquired by ESOP........... (884) (1,040) (1,196) (1,375)
Less: Common Stock to be acquired by MRP(4)... (442) (520) (598) (688)
------- ------- ------- -------
Pro forma stockholders' equity(7)............ $18,299 $20,015 $21,731 $23,704
======= ======= ======= =======
Consolidated stockholders' equity per share(6)(8):
Historical(6)................................. $ 8.25 $ 7.01 $ 6.10 $ 5.30
Estimated net proceeds........................ 9.51 9.58 9.64 9.68
Less: Common Stock acquired by ESOP.......... (0.80) (0.80) (0.80) (0.80)
Less: Common Stock to be acquired by MRP(4).. (0.40) (0.40) (0.40) (0.40)
------- ------- ------- -------
Pro forma stockholders' equity per share(9). $ 16.56 $ 15.39 $ 14.54 $ 13.78
======= ======= ======= =======
Purchase Price as a multiple of pro forma
net income per share.......................... 11.63x 12.99x 13.89x 15.15x
Purchase Price as a percentage of pro forma
stockholders' equity per share................. 60.39% 64.98% 68.78% 72.57%
</TABLE>
(footnotes on following page)
15
<PAGE>
- --------------
(1) Gives effect to the sale of an additional 224,250 shares in the Conversion,
which may be issued to cover an increase in the pro forma market value of
the Holding Company and the Savings 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 Savings Bank as converted. See "THE CONVERSION - Stock
Pricing and Number of Shares to be Issued."
(2) No effect has been given to withdrawals from savings 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 ___%) from the net proceeds from the
Offerings retained by the Holding Company. The amount of this borrowing has
been reflected as a reduction from gross proceeds to determine estimated
net investable proceeds. The Savings 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 Savings Bank's payment of the ESOP debt is based
upon equal installments of principal over a ten-year period, assuming a
combined federal and state tax rate of 37.12%. Shares purchased by the ESOP
with the proceeds of the loan will be held in a suspense account and
released on a pro rata basis as the loan is repaid. Interest income earned
by the Holding Company on the ESOP debt offsets the interest paid by the
Savings 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 SAVINGS BANK - Benefits- Employee Stock
Ownership Plan."
(4) Gives effect to the MRP expected to be adopted by the Holding Company
following the Conversion. If the MRP is approved by stockholders, the MRP
intends to acquire an amount of Common Stock equal to 4% of the shares of
Common Stock issued in the Conversion either through open market purchases
or from authorized but unissued shares of Common Stock. In calculating the
pro forma effect of the MRP, it is assumed that the required stockholder
approval has been received, that the shares were acquired by the MRP 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 and
ownership interests of existing stockholders by approximately 3.85% and pro
forma net income per share would be $0.84, $0.75, $0.69 and $0.64 at the
minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range for the year ended April 30, 1996, respectively, and pro
forma stockholders' equity per share would be $16.31, $15.19, $14.36 and
$13.64 at the minimum, midpoint, maximum and 15% above the maximum of the
Estimated Valuation Range at April 30, 1996. Shares issued under the MRP
vest over a five-year period at 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
MRP, total MRP expense would increase. The total estimated MRP expense was
multiplied by 20% (the total percent of shares for which expense is
recognized in the first year) resulting in pre-tax MRP expense of $88,000,
$104,000, $120,000 and $138,000 at the minimum, midpoint, maximum and 15%
above the maximum of the Estimated Valuation Range for the year ended April
30, 1996, respectively. 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 and ownership
16
<PAGE>
interests of existing stockholders would be diluted by approximately 9.1%.
Assuming stockholder approval of the Stock Option Plan and that all options
were exercised at the end of the period at an exercise price of $10.00 per
share, pro forma net earnings per share would be $0.77, $0.70, $0.64 and
$0.59, respectively, and pro forma stockholders' equity per share would be
$15.96, $14.91, $14.12 and $13.44, respectively, at the minimum, midpoint,
maximum and 15% above the maximum of the Estimated Valuation Range. See
"MANAGEMENT OF THE SAVINGS BANK --Benefits -- 1996 Stock Option Plan"
and "--Management Recognition Plan" and "RISK FACTORS --Possible Dilutive
Effect of Benefit Programs."
(5) Per share amounts are based upon shares outstanding of 1,025,440,
1,206,400, 1,387,360, 1,595,464 at the minimum, midpoint, maximum and 15%
above the maximum of the Estimated Valuation Range for the year ended April
30, 1996, 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 year 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 MRP expense, as
described above. Amounts shown do not reflect the possible payment of a
one-time assessment to recapitalize the SAIF. See "RISK FACTORS --
Recapitalization of SAIF and its Impact on SAIF Premiums." Based on
assessable deposits of $68.6 million at April 30, 1996, a one-time
assessment of 80 basis points would reduce net income by $345,000 (after
tax), or $0.34, $0.29, $0.25 and $0.22 per share, respectively, at the
minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range.
(7) "Book value" represents the difference between the stated amounts of the
Savings Bank's assets and liabilities. The amounts shown do not reflect
the liquidation account which 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 Savings 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 Savings 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. Amounts shown do not
reflect the possible payment of a one-time assessment to recapitalize the
SAIF. See "RISK FACTORS --Recapitalization of SAIF and its Impact on SAIF
Premiums." Based on assessable deposits of $68.6 million at April 30,
1996, a one-time assessment of 30 basis points would reduce book value by
$345,000 (after tax), or $0.31, $0.27, $0.23 and $0.20 per share,
respectively, at the minimum, midpoint, maximum, and 15% above the maximum
of the Estimated Valuation Range.
(8) Per share amounts are based upon shares outstanding of 1,105,000,
1,300,000, 1,495,000 and 1,719,250 at the minimum, midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, respectively.
(9) Does not represent possible future price appreciation or depreciation of
the Common Stock.
17
<PAGE>
SHARES TO BE PURCHASED BY MANAGEMENT PURSUANT TO SUBSCRIPTION RIGHTS
The following table sets forth certain information as to the approximate
purchases of Common Stock by each director (and director emeritus) and executive
officer of the Savings Bank, including their associates, as defined by
applicable regulations. No individual has entered into a binding agreement with
respect to such intended purchases. Directors and officers of the Savings Bank
and their associates may not purchase in excess of 34% of the shares sold in the
Conversion and, therefore, actual purchases could be more or less than indicated
below. For purposes of the following table, it has been assumed that sufficient
shares will be available to satisfy subscriptions in all categories. Directors,
officers and employees will pay the same price for the shares for which they
subscribe as the price that will be paid by all other subscribers.
<TABLE>
<CAPTION>
Percent of Percent of
Shares at Shares at
Anticipated Anticipated Minimum of Maximum of
Number of Dollar Estimated Estimated
Name and Shares Amount Valuation Valuation
Position Purchased Purchased Range Range
---------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
Dennis J. Adrian 20,000 $ 200,000 1.81% 1.34%
Director
Billy M. Conner 20,000 200,000 1.81 1.34
Director
Kermit D. Gohring 20,000 200,000 1.81 1.34
President, Chief
Executive
Officer and Director
Richard W. Gohring 7,500 75,000 0.68 0.50
Executive Vice President
and Director
Clifford E. Hamilton 20,000 200,000 1.81 1.34
Director
Bonnie K. Smith 10,000 100,000 0.90 0.67
Senior Vice President,
Secretary-
Treasurer and Director
David W. West 20,000 200,000 1.81 1.34
Director
Virgil A. Johnson 4,000 40,000 0.36 0.27
Director Emeritus
Millard F. Stewart 2,500 25,000 0.23 0.17
Director Emeritus
Cecil M. Stock 3,000 30,000 0.27 0.20
Director Emeritus
Marcia Lamons 1,000 10,000 0.09 0.07
Vice President ------- ---------- ----- ----
128,000 $1,280,000 11.58% 8.56%
======= ========== ===== ====
- --------------
</TABLE>
(1) Excludes any shares awarded pursuant to the ESOP and MRP and options to
acquire shares pursuant to the Stock Option Plan. For a description of the
number of shares to be purchased by the ESOP and intended awards under the
MRP and Stock Option Plan, see "MANAGEMENT OF THE SAVINGS BANK -- Benefits
-- Employee Stock Ownership Plan," "-- Benefits -- 1996 Stock Option Plan"
and "-- Benefits -- Management Recognition Plan."
18
<PAGE>
FULTON SAVINGS BANK, FSB AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
The following Consolidated Statements of Income of Fulton Savings
Bank, FSB and Subsidiary for the fiscal years ended April 30, 1996, 1995 and
1994 have been audited by Moore, Horton & Carlson, P.C., Mexico, Missouri,
independent auditors, whose report thereon appears elsewhere in this Prospectus.
These statements should be read in conjunction with the Consolidated Financial
Statements and related Notes included elsewhere herein.
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Interest Income:
Mortgage loans................... $4,914,438 $4,264,882 $4,351,093
Consumer and other loans......... 774,757 648,032 536,980
Investment securities............ 297,716 334,147 387,849
Interest-earning deposits........ 184,777 108,381 136,679
---------- ---------- ----------
6,171,688 5,355,442 5,412,601
Interest Expense:
Deposits......................... 3,463,533 2,746,790 2,670,677
Advances from Federal Home
Loan Bank of Des Moines......... 317,497 197,451 --
---------- ---------- ----------
3,781,030 2,944,241 2,670,677
---------- ---------- ----------
Net interest income............ 2,390,658 2,411,201 2,741,924
Provision for loan losses.......... 44,242 118,000 48,214
---------- ---------- ----------
Net interest income after
provision for loan losses..... 2,346,416 2,293,201 2,693,710
Other Income (Loss):
Loan servicing fees.............. 280,525 255,386 261,600
Service charges and other
fees............................ 129,588 117,469 117,586
Income from foreclosed assets 10,282 24,783 25,216
Loss on sale of investment -
Note B.......................... -- (55,290) (11,496)
Other............................ 65,113 17,260 20,100
---------- ---------- ----------
485,508 359,608 413,006
Other Expense:
Employee salaries and
benefits........................ 878,770 884,224 864,547
Occupancy costs.................. 222,514 197,101 184,824
Advertising...................... 31,751 78,403 42,739
Data processing.................. 152,755 178,193 145,743
Federal insurance premiums....... 153,182 148,711 149,810
Directors' fees.................. 87,223 56,875 49,200
Other............................ 322,653 265,067 304,304
---------- ---------- ----------
Total noninterest expense...... 1,848,848 1,808,574 1,741,167
---------- ---------- ----------
Income before income taxes..... 983,076 844,235 1,365,549
Income Taxes - Note G.............. 363,000 301,500 484,500
---------- ---------- ----------
Net income..................... $ 620,076 $ 542,735 $ 881,049
========== ========== ==========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
General
Management's discussion and analysis of financial condition and results of
operations is intended to assist in understanding the financial condition and
results of operations of the Savings 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.
Operating Strategy
The business of the Savings Bank consists principally of attracting
deposits from the general public and using such deposits to originate mortgage
loans secured primarily by one- to four-family residences. The Savings Bank
also originates multi-family, commercial real estate, and construction, land and
consumer and other loans. The Savings Bank plans to continue to fund its assets
primarily with deposits, although FHLB advances may continue to be used as a
supplemental source of funds.
The Savings Bank's profitability depends primarily on its net interest
income, which is the difference between the income it receives on its loan and
investment portfolio and its cost of funds, which consists of interest paid on
deposits. Net interest income is also affected by the relative amounts of
interest-earning assets and interest-bearing liabilities. When interest-earning
assets equal or exceed interest-bearing liabilities, any positive interest rate
spread will generate net interest income. The Savings Bank's profitability is
also affected by the level of other income and expenses. Other income consists
primarily of loan servicing fees and service charges and other fees. Other
expenses include employee salaries and benefits, occupancy costs, deposit
insurance premiums, data processing expenses and other operating costs. The
Savings Bank's results of operations are also significantly affected by general
economic and competitive conditions, particularly changes in market interest
rates, government legislation and policies concerning monetary and fiscal
affairs, housing and financial institutions and the attendant actions of the
regulatory authorities.
The Savings Bank strives to operate a conservative, well capitalized,
profitable thrift dedicated to providing quality service to its customers. The
Savings Bank believes that it has successfully implemented its strategy by: (i)
maintaining a strong capital level; (ii) maintaining a high level of asset
quality; (iii) limiting its exposure to fluctuations in market interest rates;
(iv) enhancing net income by developing a portfolio of loans serviced for others
as a means of generating current income through loan servicing fees; (v)
emphasizing local loan origination; and (vi) emphasizing high quality customer
service with a competitive fee structure. The Savings Bank has attempted to
limit its interest rate risk by matching the interest rate sensitivity of its
interest-earning assets with its funding sources. The Savings Bank has pursued
this objective by selling substantially all of the fixed-rate mortgage loans
that it originates, retaining ARM loans for portfolio, and promoting transaction
accounts and certificates of deposit with terms up to five years.
Results of Operations
The earnings of the Savings Bank depend primarily on its level of net
interest income, which is the difference between interest earned on the Savings
Bank's interest-earning assets and the interest paid on interest-bearing
liabilities. Net interest income is a function of the Savings Bank's interest
rate spread, which is the difference between the yield earned on interest-
earning assets and the rate paid on interest-bearing liabilities, as well as a
function of the average balance of interest-earning assets as compared to the
average balance of interest-bearing liabilities. The Savings Bank operates as a
community oriented financial institution, with a focus on servicing customers in
Boone and Callaway Counties in Missouri. Because the Savings Bank serves a
limited growth market area with a relatively small population base, the Savings
Bank's ability to achieve loan and deposit growth is limited. Moreover, a
downturn in the economy of the Savings Bank's market area could have an adverse
effect on the quality
20
<PAGE>
of the Savings Bank's loan portfolio. See "RISK FACTORS -- Dependence on Local
Economy and Competition Within Market Area" and "BUSINESS OF THE SAVINGS BANK --
Market Area."
Comparison of Financial Condition at April 30, 1996 and 1995
Total assets increased to $85.5 million at April 30, 1996 from $79.4
million at April 30, 1995. Cash, including interest-bearing deposits, decreased
to $2.9 million at April 30, 1996 from $4.2 million at April 30, 1995, and
investment securities decreased to $3.2 million from $4.2 million as these funds
were used to originate loans. Loans receivable increased to $73.9 million at
April 30, 1996 from $67.8 million at April 30, 1995 as a result of strong loan
demand in fiscal 1996, and loans held for sale increased to $2.3 million from
$573,000. Deposits increased to $70.3 million at April 30, 1996 from $65.2
million at April 30, 1995 as the Savings Bank priced its certificates more
aggressively in order to take advantage of lower market interest rates. FHLB
advances increased slightly to $5.0 million from $4.5 million as the Savings
Bank continued to use FHLB advances as a supplemental source of lendable funds.
Total equity increased to $9.1 million at April 30, 1996 from $8.5 million at
April 30, 1995 as a result of retained earnings.
Comparison of Operating Results for the Years Ended April 30, 1996 and 1995
Net Income. Net income increased $77,000, or 14.3%, to $620,000 for the
year ended April 30, 1996 from $543,000 for the year ended April 30, 1995.
Income before taxes increased $139,000, or 16.4%. Net interest income decreased
slightly between the periods as a result of a smaller interest rate margin as
the Savings Bank's yield on interest-earning assets increased less than its cost
of interest-bearing liabilities. A decrease in the provision for loan losses of
$74,000, an increase in other income of $126,000 and an increase in other
expenses of $40,000 accounted for the change in income before taxes. The
Savings Bank's return on equity for fiscal 1996 was 7.00% compared with 6.55%
for fiscal 1995.
Net Interest Income. Net interest income decreased $21,000 to $2.4 million
for the year ended April 30, 1996. Total interest income increased $816,000, or
15.2%, to $6.2 million for the year ended April 30, 1996 from $5.4 million for
the year ended April 30, 1995. Although total interest income increased from
fiscal 1995 to fiscal 1996, this increase was offset by a greater increase in
total interest expense as the Savings Bank's interest rate spread decreased to
2.60% for fiscal 1996 from 2.96% for fiscal 1995. Interest income on loans
receivable increased $776,000 between the periods primarily as a result of an
increase in the average balance of loans to $71.4 million in fiscal 1996 from
$64.9 million in fiscal 1996. An increase in the average yield on loans to
7.97% in fiscal 1996 from 7.57% in fiscal 1995, as interest rates moved up
slightly and adjustable-rate loans adjusted upwards, also contributed to the
increase in interest income on loans. Interest income on investment securities
decreased $36,000 primarily due to the elimination of the Savings Bank's
mortgage-backed securities portfolio. The Savings Bank began liquidating its
remaining mortgage-backed securities portfolio in fiscal 1995 after receiving
significant principal repayments in fiscal 1994 and 1993 so that the funds could
be invested in higher yielding loans. The decrease in interest income from
mortgage-backed securities was partially offset by an increase in interest
income on U.S. Government and federal agency obligations, which resulted from an
increase in the average yield on such securities despite a reduction in the
average balance from fiscal 1995 to fiscal 1996. Interest income on interest-
bearing deposits increased $76,000 between the periods as a result of an
increase in the average balance to $3.1 million in fiscal 1996 from $2.2 million
in fiscal 1995, as the Savings Bank increased its liquidity in connection with
increased loan originations and sales, and an increase in the average yield to
5.90% from 4.89%, which was due to higher market interest rates. Total interest
expense increased $837,000, or 28.4%, to $3.8 million for the year ended April
30, 1996 from $2.9 million for the year ended April 30, 1995. Interest paid on
deposits increased $717,000 between the periods while interest paid on FHLB
advances increased $120,000. Interest paid on deposits increased due to a
larger average balance of deposits in fiscal 1996 and an increase in the average
rate paid. Though the average balance of NOW, money market, and passbook
accounts decreased to $14.7 million in fiscal 1996 from $17.1 million in fiscal
1995, the average balance of certificates of deposit increased to $53.3 million
from $47.2 million. This shift from lower paying transaction accounts to higher
paying certificate accounts together with an increase in market interest rates
caused the average rate paid on deposits to increase to 5.09% in fiscal 1996
from 4.27% in fiscal 1995. Interest paid on FHLB advances increased primarily
as a result of higher average balances in fiscal 1996 despite a decrease in the
average rate paid on such advances.
21
<PAGE>
Provision for Loan Losses. Provisions for loan losses are charges to
earnings to bring the total allowance for loan losses to a level considered by
management to be adequate to provide for estimated loan losses based on
management's evaluation of the collectibility of the loan portfolio, including
the nature of the portfolio, credit concentrations, trends in historical loss
experience, specific impaired loans and economic conditions. The provision for
loan losses decreased to $44,000 for the year ended April 30, 1996 from $118,000
for the year ended April 30, 1995. The provision for loan losses was
significantly larger in fiscal 1995 as the allowance was increased that year in
response to higher than normal net charge-offs in fiscal 1994 and the increase
in the size of the loan portfolio.
Other Income. Other income increased $126,000, or 35.0%, to $486,000 for
the year ended April 30, 1996 from $360,000 for the year ended April 30, 1995.
Loan servicing fees increased $25,000 to $280,000 as a result of an increase in
the amount of loans serviced for others. Service charges and fees increased
$12,000 as a result of a larger number of accounts. Income from foreclosed
assets decreased $15,000 as a result of the sale of such properties. In fiscal
1995, the Savings Bank incurred a loss of $55,000 on the sale of mortgage-backed
securities as the Savings Bank liquidated its mortgage-backed securities
portfolio. There were no comparable losses in fiscal 1996.In fiscal 1996, the
Savings Bank received a patronage dividend of $55,000 from the Savings Bank's
data processor.
Other Expense. Other expense increased $40,000 to $1.8 million for the
year ended April 30, 1996. Employee salaries and benefits were essentially
unchanged between fiscal 1996 and fiscal 1995. Occupancy costs increased
$25,000, or 12.9%, between the periods due in part to the expansion of the
Savings Bank's main office. Advertising costs decreased $47,000, or 59.5% due
to an effort to reduce expenses. Data processing costs decreased $25,000, or
14.3%, as a result of entering into a five-year contract. Directors' fees
increased $30,000 as three directors took emeritus status and three new
directors were appointed. The Savings Bank anticipates that other expense will
increase in fiscal 1997 as the result of increased costs associated with
operating as a public company and increased compensation expense as result of
adoption of the ESOP.
Income Taxes. The provision for income taxes increased to $363,000 in
fiscal 1996 from $302,000 in fiscal 1995 as a result of greater taxable income.
Comparison of Operating Results for the Years Ended April 30, 1995 and 1994
Net Income. Net income decreased $338,000, or 38.4%, to $543,000 for the
year ended April 30, 1995 from $881,000 for the year ended April 30, 1994.
Income before taxes decreased $521,000, or 38.2%. Operating results were
primarily influenced by the rise in short-term interest rates, which resulted in
a decrease in the Savings Bank's interest rate spread to 2.96% for the year
ended April 30, 1995 from 3.58% for the year ended April 30, 1994. An increase
in the provision for loan losses of $70,000, a decrease in other income of
$53,000 and an increase in other expenses of $67,000 also contributed to the
decrease in net income. The Savings Bank's return on equity for the year ended
April 30, 1995 was 6.55% compared to 11.92% for the year ended April 30, 1994.
Net Interest Income. Net interest income decreased $331,000, or 12.1%, to
$2.4 million for the year ended April 30, 1995, from $2.7 million for the year
ended April 30, 1994. The decrease in net income was primarily the result of
the decrease in the Savings Bank's interest rate spread to 2.96% in fiscal 1995
from 3.58% in fiscal 1994. Total interest income decreased $57,000 to $5.4
million for the year ended April 30, 1995. Interest income on loans receivable
decreased $25,000 between the periods as the increase in the average balance of
loans to $64.9 million in fiscal 1995 from $59.2 million in fiscal 1994 was
offset by the decrease in the average yield on loans receivable to 7.57% from
8.26%. The average yield on loans receivable decreased as a result of a decline
in the index used for the Savings Bank's ARM loans. Interest income on
investment securities decreased $54,000 primarily as a result of a decrease in
the average balance of mortgage-backed securities to $370,000 in fiscal 1995
from $1.5 million in fiscal 1994. The decrease in interest income from
mortgage-backed securities was partially offset by an increase in interest
income from U.S. Government and federal agency obligations, which increased due
to a higher average yield. Interest income on interest-bearing deposits
decreased $28,000 a result of a decrease in the average balance of such deposits
to $2.2 million in fiscal 1995 from $4.4 million in fiscal 1994 that was
partially offset by an
22
<PAGE>
increase in the average yield to 4.89% from 3.12%. Total interest expense
increased $274,000, or 10.2%, to $2.9 million for the year ended April 30, 1995
from $2.7 million for the year ended April 30, 1994. Interest expense on
deposits increased $76,000 between the periods as a result of an increase in the
average rate paid on deposits to 4.27% in fiscal 1995 from 4.13% in fiscal 1994,
which was partially offset by a decrease in the average balance of deposits. In
fiscal 1995, the Savings Bank had interest expense of $197,000 on FHLB advances
with no such expense in fiscal 1994. In fiscal 1995, the Savings Bank began
using FHLB advances as a supplemental source of lendable funds.
Provision of Loan Losses. The provision for loan losses was $118,000 in
the year ended April 30, 1995 compared to $48,000 in the year ended April 30,
1994. The provision for loan losses was larger in fiscal 1995 as the allowance
was increased in response to a larger amount of delinquencies in the loan
portfolio.
Other Income. Other income decreased $53,000, or 12.9%, to $360,000 for
the year ended April 30, 1995 from $413,000 for the year ended April 30, 1994.
The decrease was primarily due to an increase in the loss on sale of investments
to a loss of $55,000 in fiscal 1995 from a loss of $11,000 in fiscal 1994. Loan
servicing fees decreased $6,000 between the periods while service charges and
other fees and income from foreclosed assets were unchanged between the periods.
Other Expense. Other expense increased $67,000, or 3.9%, to $1.8 million
for the year ended April 30, 1995 from $1.7 million for the year ended April 30,
1994. Employee salaries and benefits increased $20,000, or 2.3%, between the
periods primarily due to ordinary salary increases. Occupancy costs increased
$12,000, or 6.6%. Advertising costs increased $36,000, or 83.4%, as the Savings
Bank sought to increase lending activity during a period of low interest rates.
Income Taxes. The provision for income taxes decreased to $302,000 for the
year ended April 30, 1995 from $485,000 for the year ended April 30, 1994 due to
a lower level of taxable earnings.
Average Balances, Interest and Average Yields/Cost
The following table sets forth certain information for the periods
indicated regarding average balances of assets and liabilities as well as the
total dollar amounts of interest income from average interest-earning assets and
interest expense on average interest-bearing liabilities and average yields and
costs. Such yields and costs for the periods indicated are derived by dividing
income or expense by the average monthly balance of assets or liabilities,
respectively, for the periods presented. Average balances are derived from
month-end balances. Management does not believe that the use of month-end
balances instead of daily balances has caused any material difference in the
information presented.
23
<PAGE>
<TABLE>
<CAPTION>
Year Ended April 30,
----------------------------------------------------------------------------------
1996 1995 1994
---------------------------- ------------------------- -------------------------
Average Average Average
Average Yield/ Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost Balance Interest Cost
--------- -------- ------ ------- -------- ------ ------- -------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable, net (1)........... $71,380 $5,689 7.97% $64,942 $4,913 7.57% $59,206 $4,888 8.26%
Mortgage-backed securities
available for sale............... 1 -- 9.18 370 44 11.92 -- -- --
Mortgage-backed securities
held to maturity................. -- -- -- -- -- -- 1,530 121 7.87
U.S. Government and federal agency
securities available for sale.... 3,895 253 6.48 4,335 240 5.54 -- -- --
U.S. Government and federal agency
securities held to maturity...... -- -- -- -- -- -- 4,503 218 4.85
FHLB stock.......................... 628 45 7.17 616 50 8.07 622 49 7.92
Interest-bearing deposits........... 3,133 185 5.90 2,216 108 4.89 4,381 137 3.12
------- ------ ------- ------ ------- ------
Total interest-earning assets..... 79,037 6,172 7.81 72,479 5,355 7.39 70,242 5,413 7.71
Noninterest-earning assets............ 3,695 3,308 3,248
------- ------- -------
Total average assets.............. $82,732 $75,787 $73,490
======= ======= =======
Interest-bearing liabilities:
NOW, money market and passbook
accounts......................... $14,728 387 2.62 $17,090 485 2.84 $17,906 485 2.71
Certificates of deposit............. 53,273 3,077 5.78 47,237 2,262 4.79 46,752 2,186 4.68
------- ------ ------- ------ ------- ------
Total average deposits............ 68,001 3,464 5.09 64,327 2,747 4.27 64,658 2,671 4.13
FHLB advances....................... 4,616 317 6.88 2,077 197 9.51 -- -- --
------- ------ ------- ------ ------- ------
Total interest-bearing
liabilities...................... 72,617 3,781 5.21 66,404 2,944 4.43 64,658 2,671 4.13
------ ------ ------
Noninterest-bearing liabilities....... 1,261 1,097 1,442
------- ------- -------
Total average liabilities......... 73,878 67,501 66,100
Average retained earnings............. 8,854 8,286 7,390
------- ------- -------
Total liabilities and retained
earnings......................... $82,732 $75,787 $73,490
======= ======= =======
Net interest income................... $2,391 $2,411 $2,742
====== ====== ======
Interest rate spread.................. 2.60 2.96 3.58
Net interest margin................... 3.02% 3.33% 3.90%
Ratio of average interest-earning
assets to average interest-bearing
liabilities.......................... 108.84% 109.15% 108.64%
</TABLE>
- ------------------------
(1) Average loans receivable includes nonaccruing loans. Interest income does
not include interest on loans 90 days or more past due.
24
<PAGE>
Yields Earned and Rates Paid
The following table sets forth (on a consolidated basis) for the periods
and at the date indicated the weighted average yields earned on the Savings
Bank's assets and the weighted average interest rates paid on the Savings Bank's
liabilities, together with the net yield on interest-earning assets.
<TABLE>
<CAPTION>
Year Ended April 30,
At April 30, ----------------------------
1996 1996 1995 1994
------------ ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average yield on:
Loans receivable, net......... 7.76% 7.97% 7.57% 8.26%
Mortgage-backed securities
available for sale......... -- 9.18 11.92 --
Mortgage-backed securities
held to maturity........... -- -- -- 7.87
U.S. Government and federal
agency obligations available
for sale.................. 6.08 6.48 5.54 --
U.S. Government and federal
agency obligations held to
maturity.................. -- -- -- 4.85
FHLB stock.................... 6.71 7.17 8.07 7.92
Interest-bearing deposits..... 3.42 5.90 4.89 3.12
All interest-earning assets... 7.61 7.81 7.39 7.71
Weighted average rate paid on:
NOW, money market and
passbook accounts.......... 2.63 2.62 2.84 2.71
Certificate accounts.......... 5.80 5.78 4.79 4.68
FHLB advances................. 6.75 6.88 9.51 --
All interest-bearing
liabilities.................. 5.28 5.21 4.43 4.13
Interest rate spread (spread
between weighted average rate
on all interest-earning assets
and all interest-bearing
liabilities).................... 2.38 2.60 2.96 3.58
Net interest margin (net
interest income as a percentage
of average interest-earning
assets)......................... n/a 3.02 3.33 3.90
</TABLE>
25
<PAGE>
The following table sets forth the effects of changing rates and volumes on
the interest income and interest expense of the Savings Bank. Information is
provided with respect to: (i) effects attributable to changes in rate (changes
in rate multiplied by prior volume); (ii) effects attributable to changes in
volume (changes in volume multiplied by prior rate); and (iii) effects
attributable to changes in rate/volume (change in rate multiplied by change in
volume).
<TABLE>
<CAPTION>
Year Ended April 30, Year Ended April 30,
1996 Compared to Year 1995 Compared to Year
Ended April 30, 1995 Ended April 30, 1994
Increase (Decrease) Due to Increase (Decrease) Due to
--------------------------------------- ---------------------------------------
Rate/ Rate/
Rate Volume Volume Total Rate Volume Volume Total
------ ----------- ---------- ------ ------ ---------- ---------- -------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income:
Loans receivable, net.............. $263 $487 $ 26 $776 $(409) $474 $ (40) $ 25
Mortgage-backed securities......... (10) (44) 10 (44) 62 (91) (47) (76)
U.S. Government and federal
agency obligations.............. 41 (25) (4) 12 31 (8) (1) 22
FHLB stock......................... (5) 1 -- (4) 1 (1) -- --
Interest-bearing deposits.......... 22 45 9 76 78 (68) (38) (28)
---- ---- ---- ---- ----- ---- ----- -----
Total net change in income
on interest-earning assets....... 311 464 41 816 (237) 306 (126) (57)
Interest expense:
NOW, money market and
passbook accounts................ (36) (67) 5 (98) 23 (22) (1) --
Certificates of deposit............ 466 289 60 815 53 23 -- 76
FHLB advances...................... (54) 241 (67) 120 -- -- 198 198
---- ---- ---- ---- ----- ---- ----- -----
Total net change in expense
on interest-bearing liabilities 376 463 (2) 837 76 1 197 274
---- ---- ---- ---- ----- ---- ----- -----
Net change in net interest
income........................... $(65) $ 1 $ 43 $(21) $(313) $305 $(323) $(331)
==== ==== ==== ==== ===== ==== ===== =====
</TABLE>
Asset and Liability Management
The Savings Bank's principal financial objective is to achieve long-
term profitability while reducing its exposure to fluctuating interest rates.
The Savings Bank has sought to reduce exposure of its earnings to changes in
market interest rates by attempting to manage the mismatch between asset and
liability maturities and interest rates. The principal element in achieving
this objective is to increase the interest-rate sensitivity of the Savings
Bank's interest-earning assets by retaining for its portfolio loans with
interest rates subject to periodic adjustment to market conditions and selling
substantially all of its fixed-rate one- to four-family mortgage loans. The
Savings Bank relies on retail deposits as its primary source of funds.
Management believes retail deposits, compared to brokered deposits, reduce the
effects of interest rate fluctuations because they generally represent a more
stable source of funds. As part of its interest rate risk management strategy,
the Savings Bank promotes certificates of deposit with longer maturities (up to
five years) to reduce the interest sensitivity of its interest-bearing
liabilities.
In order to encourage institutions to reduce their interest rate risk,
the OTS adopted a rule incorporating an interest rate risk ("IRR") component
into the risk-based capital rules. Using data from the Savings Bank's quarterly
reports to the OTS, the Savings Bank receives a report which measures interest
rate risk by modeling the change in Net Portfolio Value ("NPV") over a variety
of interest rate scenarios. This procedure for measuring interest rate risk was
developed by the OTS to replace the "gap" analysis (the difference between
interest-earning assets and interest-
26
<PAGE>
bearing liabilities that mature or reprice within a specific time period). NPV
is the present value of expected cash flows from assets, liabilities and off-
balance sheet contracts. The calculation is intended to illustrate the change
in NPV that will occur in the event of an immediate change in interest rates of
at least 200 basis points with no effect given to any steps that management
might take to counter the effect of that interest rate movement. Under proposed
OTS regulations, an institution with a greater than "normal" level of interest
rate risk will be subject to a deduction from total capital for purposes of
calculating its risk-based capital. An institution with a "normal" level of
interest rate risk is defined as one whose "measured interest rate risk" is less
than 2.0%. Institutions with assets of less than $300 million and a risk-based
capital ratio of more than 12.0% are exempt. The Savings Bank meets these
qualifications and therefore is exempt. Assuming this proposed rule was in
effect at April 30, 1996 and the Savings Bank was not exempt from the rule, the
Savings Bank's level of interest rate risk would not have caused it to be
treated as an institution with greater than "normal" interest rate risk.
The following table is provided by the OTS and illustrates the change
in NPV at March 31, 1996, based on OTS assumptions, that would occur in the
event of an immediate change in interest rate, with no effect given to any steps
that management might take to counter the effect of that interest rate movement.
<TABLE>
<CAPTION>
Net Portfolio as % of
Net Portfolio Value Portfolio Value of Assets
------------------------------------ -------------------------------
Basis Point ("bp")
Change in Rates $ Amount $ Change(1) % Change NPV Ratio(2) Change(3)
--------------- -------- ----------- --------- ------------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
400 $ 8,925 $(2,611) (23)% 10.77% (234) bp
300 9,795 (1,742) (15) 11.61 (150) bp
200 10,572 (964) (8) 12.33 (78) bp
100 11,189 (347) (3) 12.86 (25) bp
0 11,537 -- -- 13.11 --
(100) 11,566 30 -- 13.04 (7) bp
(200) 11,385 (152) (1) 12.77 (34) bp
(300) 11,211 (325) (3) 12.50 (61) bp
(400) 11,241 (296) (3) 12.43 (68) bp
</TABLE>
- --------------------
(1) Represents the increase (decrease) of the estimated NPV at the indicated
change in interest rates compared to the NPV assuming no change in interest
rates.
(2) Calculated as the estimated NPV divided by the portfolio value of total
assets ("PV").
(3) Calculated as the increase (decrease) of the NPV ratio assuming the
indicated change in interest rates over the estimated NPV ratio assuming no
change in interest rates.
27
<PAGE>
The following table is provided by the OTS and is based on the calculations
in the above table. It sets forth the IRR capital component that will be
deducted from risk-based capital in determining the level of risk-based capital.
At March 31, 1996, the change in NPV as a percentage of portfolio value of total
assets is negative 1.10%, which is less than negative 2.0%, indicating that the
Savings Bank has a "normal" level of interest rate risk.
<TABLE>
<CAPTION>
At At At
March 31, December 31, March 31,
1996 1995 1995
---------- ------------- ----------
<S> <C> <C> <C>
RISK MEASURES: 200 BP RATE SHOCK:
Pre-Shock NPV Ratio: NPV as % of PV of
Assets................................. 13.11% 12.41% 13.03%
Exposure Measure: Post-Shock NPV Ratio. 12.33 11.95 11.90
Sensitivity Measure: Change in NPV
Ratio.................................. (78)bp (45)bp (113)bp
CALCULATION OF CAPITAL COMPONENT:
Change in NPV as % of PV of Assets...... (1.10)% (0.72)% (1.49)%
Interest Rate Risk Capital Component (1) -- -- --
- ------------------------
</TABLE>
(1) No amounts are shown on the IRR capital component line because the Savings
Bank is exempt from the IRR capital component.
As with any method of measuring interest rate risk, certain shortcomings
are inherent in the method of analysis presented in the foregoing tables. For
example, although certain assets and liabilities may have similar maturities or
periods to repricing, they may react in different degrees to changes in market
interest rates. Also, 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, certain assets, such as ARM loans, have features which restrict
changes in interest rates on a short-term basis and over the life of the asset.
Further, in the event of a change in interest rates, expected rates of
prepayments on loans and early withdrawals from certificates could likely
deviate significantly from those assumed in calculating the table.
Liquidity and Capital Resources
The Savings Bank's primary sources of funds are customer deposits, proceeds
from principal and interest payments on loans, proceeds from sales of loans and
loan participations, maturing securities and FHLB advances. While maturities
and scheduled amortization of loans are a predictable source of funds, deposit
flows and mortgage prepayments are greatly influenced by general interest rates,
economic conditions and competition.
The Savings Bank must maintain an adequate level of liquidity to ensure the
availability of sufficient funds to support loan growth and deposit withdrawals,
to satisfy financial commitments and to take advantage of investment
opportunities. The Savings Bank generally maintains sufficient cash and short-
term investments to meet short-term liquidity needs. At April 30, 1996, cash
(including interest-bearing deposits) totalled $2.9 million, or 3.4% of total
assets, and investment securities that matured in one year or less totalled $2.5
million, or 2.9% of total assets. All of the Savings Bank's investment
securities are classified as available for sale. In addition, the Savings Bank
maintains a credit facility with the FHLB-Des Moines, which provides for
immediately available advances. Advances under this credit facility totalled
$5.0 million at April 30, 1996.
The OTS requires a savings institution to maintain an average daily balance
of liquid assets (cash and eligible investments) equal to at least 5.0% of the
average daily balance of its net withdrawable deposits and short-
28
<PAGE>
term borrowings. In addition, short-term liquid assets currently must
constitute 1.0% of the sum of net withdrawable deposit accounts plus short-term
borrowings. The Savings Bank's actual short- and long-term liquidity ratios at
April 30, 1996 were 5.08% and 6.60%, respectively. The Savings Bank
consistently maintains liquidity levels in excess of regulatory requirements,
and believes this is an appropriate strategy for proper asset and liability
management.
The primary investing activity of the Savings Bank is the origination of
mortgage loans. During years ended April 30, 1996, 1995 and 1994, the Savings
Bank originated loans in the amounts of $51.3 million, $36.0 million, and $43.1
million, respectively. At April 30, 1996, the Savings Bank had loan commitments
and undisbursed equity lines of credit totalling $4.1 million and undisbursed
loans in process totalling $3.7 million. The Savings Bank anticipates that it
will have sufficient funds available to meet its current loan origination
commitments. Certificates of deposit that are scheduled to mature in less than
one year from April 30, 1996 totalled $34.0 million. Historically, the Savings
Bank has been able to retain a significant amount of its deposits as they
mature. In addition, management of the Savings Bank believes that it can adjust
the offering rates of savings certificates to retain deposits in changing
interest rate environments. In the event that a significant portion of these
deposits are not retained by the Savings Bank, the Savings Bank anticipates that
it would utilize FHLB advances to fund deposit withdrawals, which would result
in a decrease in net interest income to the extent that the average rate of such
advances exceeds the average rate paid on deposits of similar duration.
Proposed federal legislation to recapitalize the SAIF would require savings
associations like the Savings Bank to pay a one-time assessment to increase the
SAIF's reserves to $1.25 per $100 of deposits. Such assessment is expected to
be approximately 80 basis points on the amount of deposits held by a SAIF-member
institution. Based on the Savings Bank's assessable deposits of $68.6 million
April 30, 1996, a one-time assessment of 80 basis points would equal
approximately $549,000 on a pre-tax basis, or, $345,000 after tax. The Savings
Bank believes that it has adequate resources to pay such assessment from cash
and other liquid investments, including short-term investment securities.
The Savings Bank is required to maintain specific amounts of capital
pursuant to OTS requirements. As of April 30, 1996, the Savings Bank was in
compliance with all regulatory capital requirements which were effective as of
such date with tangible, core and risk-based capital ratios of 10.64%, 10.64%
and 18.46%, respectively. For a detailed discussion of regulatory capital
requirements, see "REGULATION -- Federal Regulation of Savings Associations --
Capital Requirements." See also "HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE."
Impact of New Accounting Pronouncements and Regulatory Policies
Accounting by Creditors for Impairment of a Loan. In May 1993, the
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment
of a Loan," which became effective for the Savings Bank for the fiscal year
beginning May 1, 1995. This statement requires a lender to consider a loan to
be impaired if the lender believes it is probable that it will be unable to
collect all principal and interest due according to the contractual terms of the
loan. If a loan is impaired, the lender will be required to record a loan
valuation allowance equal to the present value of the estimated future cash
flows discounted at the loan's effective rate or at the loan's observable market
price or fair value of the collateral. This accounting change will
significantly change the accounting by lenders presently allowed under SFAS No.
15. In October 1994, FASB issued SFAS No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures," which amends SFAS
No. 114 to allow a creditor to use existing methods for recognizing interest
income on impaired loans and eliminates the income recognition provisions in
SFAS No. 114. SFAS No. 118 also requires disclosure of certain information
about the recorded investment in impaired loans and how the creditor recognizes
interest income related to impaired loans. SFAS No. 118 became effective for
the Savings Bank for the fiscal year beginning May 1, 1995. The adoption of
these statements did not have a material effect on the Savings Bank's financial
condition or results of operations at April 30, 1996.
Accounting for Employee Stock Ownership Plans. In November 1993, the
American Institute of Certified Public Accountants issued SOP 93-6, which
requires an employer to record compensation expense in an amount equal to the
fair value of shares committed to be released to employees from an employee
stock ownership plan and to exclude unallocated shares from earnings per share
computations. The effect of SOP 93-6 on net income and book value per share in
1996 and future periods cannot be predicted due to the uncertainty of the fair
value of the shares at the time they will be committed to be released.
29
<PAGE>
Disclosure of Certain Significant Risks and Uncertainties. In December
1994, the Accounting Standards Executive Committee issued SOP 94-6, "Disclosure
of Certain Significant Risks and Uncertainties." This SOP applies to financial
statements prepared in conformity with GAAP 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 December 15, 1995 and did not
have a material impact on the financial condition or results of operations of
the Savings Bank.
Accounting for the Impairment of Long-Lived Assets. In March 1995, the
FASB issued SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of." SFAS No. 121 establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used and for long-lived assets and certain identifiable intangibles to be
disposed of. The statement does not apply to financial instruments, long-term
customer relationships of a financial institution (core deposits), mortgage and
other servicing rights and deferred tax assets. SFAS No. 121 requires the
review of long-lived assets and certain identifiable intangibles for impairment
whenever events or changes in circumstances include, for example, a significant
decrease in market value of an asset, a significant change in use of an asset,
or an adverse change in a legal factor that could effect the value of an asset.
If such an event occurs and it is determined that the carrying value of the
asset may not be recoverable, an impairment loss should be recognized as
measured by the amount by which the carrying amount of the asset exceeds the
fair value of the asset. Fair value can be determined by a current transaction,
quoted market prices or present value of estimated expected future cash flows
discounted at the appropriate rate. The statement is effective for fiscal years
beginning after December 15, 1995. The Holding Company does not anticipate that
implementation of SFAS No. 121 will have a material impact on its results of
operations or financial position.
Accounting for Mortgage Servicing Rights. In May 1995, the FASB issued
SFAS No. 122, "Accounting for Mortgage Servicing Rights." SFAS No. 122
eliminates distinctions between servicing rights that were purchased and those
that were retained upon the sale of loans. The statement requires mortgage
servicers to recognize as separate assets rights to service loans, no matter how
the rights were acquired. Institutions who sell loans and retain the servicing
rights will be required to allocate the total cost of the loans to servicing
rights and loans based on their relative fair values if that value can be
estimated. SFAS No. 122 is effective for fiscal years beginning after December
15, 1995. Furthermore, SFAS No. 122 requires that all capitalized mortgage
servicing rights be periodically evaluated for impairment based upon the current
fair value of these rights. The Holding Company anticipates that adoption of
this statement beginning May 1, 1996 will not have a material impact on its
results of operations or financial position.
Accounting for Stock-Based Compensation. In October 1995, the FASB issued
SFAS No. 123, "Accounting for Stock-Based Compensation," establishing financial
accounting and reporting standards for stock-based employee compensation plans.
This statement encourages all entities to adopt a new method of accounting to
measure compensation cost of all employee stock compensation plans based on the
estimated fair value of the award at the date it is granted. Companies are,
however, allowed to continue to measure compensation cost for those plans using
the intrinsic value based method of accounting, which generally does not result
in compensation expense recognition for most plans. Companies that elect to
remain with the existing accounting method are required to disclose in a
footnote to the financial statements pro forma net income and, if presented,
earnings per share, as if this statement had been adopted. The accounting
requirements of this statement are effective for transactions entered into in
fiscal years that begin after December 15, 1995; however, companies are required
to disclose information for awards granted in their first fiscal year beginning
after December 15, 1994. Management of the Savings Bank has not completed an
analysis of the potential effects of this statement on its financial condition
or results of operations.
Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities. In June 1996, the FASB issued SFAS 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishment
of Liabilities," which provides accounting and reporting standards for transfers
and servicing of financial assets and extinguishment of liabilities. Those
standards are based on consistent application of a financial components approach
that focuses on control. Under the financial components approach, after a
transfer of financial assets, an entity recognizes the financial and servicing
assets it controls and the liabilities it has incurred, derecognizes financial
assets when control has been surrendered, and derecognizes liabilities when
extinguished. This statement supersedes SFAS No. 122 and is effective for
transfers and servicing of financial assets and extinguishment of liabilities
occurring after December 31, 1996. Management of the Savings Bank has not yet
determined the impact of the adoption of SFAS 125.
30
<PAGE>
Effect of Inflation and Changing Prices
The consolidated financial statements and related financial data presented
herein have been prepared in accordance with GAAP, which require 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 primary impact of inflation is reflected in the
increased cost of the Savings Bank's operations. Unlike most industrial
companies, virtually all the assets and liabilities of a financial institution
are monetary in nature. As a result, interest rates generally have a more
significant impact on a financial institution's performance than do general
levels of inflation. Interest rates do not necessarily move in the same
direction or to the same extent as the prices of goods and services.
BUSINESS OF THE HOLDING COMPANY
General
The Holding Company was organized as a Delaware business corporation at the
direction of the Savings Bank in May 1996 for the purpose of becoming a holding
company for the Savings Bank upon completion of the Conversion. Upon completion
of the Conversion, the Savings Bank will be a wholly-owned subsidiary of the
Holding Company.
Business
Prior to the Conversion, the Holding Company will not engage in any
significant operations. Upon completion of the Conversion, the Holding
Company's sole business activity will be the ownership of the stock of the
Savings Bank. In the future, the Holding Company may acquire or organize other
operating subsidiaries, although there are no current plans, arrangements,
agreements or understandings, written or oral, to do so.
Initially, the Holding Company will neither own nor lease any property but
will instead use the premises, equipment and furniture of the Savings Bank with
the payment of appropriate rental fees, as required by applicable law.
Since the Holding Company will only hold the capital stock of the Savings
Bank, the competitive conditions applicable to the Holding Company will be the
same as those confronting the Savings Bank. See "BUSINESS OF THE SAVINGS BANK -
- - Competition."
BUSINESS OF THE SAVINGS BANK
General
The Savings Bank operates as a community oriented financial institution and
is committed to serving the needs of its customers in its market area. The
Savings Bank's business consists primarily of attracting deposits from the
general public and using those funds to originate and purchase real estate
loans.
Market Area
The Savings Bank conducts operations in central Missouri through its main
office in Fulton, Missouri and its branch office in Holts Summit, Missouri, both
of which are in Callaway County. The Savings Bank also serves Boone County and,
to a lesser extent, Cole and Audrian Counties. Fulton, which is the county
seat, serves as the economic and employment center of Callaway County.
Additional employment is available in the nearby metropolitan areas of Columbia
(in Boone County) and Jefferson City (in Cole County). Columbia is the location
31
<PAGE>
of the University of Missouri and provides significant employment in education
and medicine. Jefferson City is the state capital of Missouri, resulting in a
significant concentration of government employment and an historically stable
economy. Callaway County represents the Savings Bank's primary market area for
deposit generation as most of its depositors live in this county, particularly
in the areas surrounding the Savings Bank's offices. The Savings Bank's deposits
have increased slightly in recent years. However, because Callaway County has a
small population, the Savings Bank's ability to achieve deposit growth is
limited. The Savings Bank's lending activities have been concentrated in
Callaway County and the city of Columbia. Loan demand has been strong in recent
years, especially in the city of Columbia. The Savings Bank anticipates using
the proceeds of the Offerings for increased local lending, although no
assurances can be given as to how long it will take to deploy such funds.
While Callaway County is a more rural county with a much lower population
base and overall smaller economy than Cole and Boone Counties, the economy has
been stable historically due to the economies in the contiguous counties. The
Callaway County economy, which had been based on agriculture, has diversified in
recent years to include employment in health care, education, manufacturing and
local/state government. The County's largest employers are Fulton State Hospital
and Union Electric Company, which operates a large electrical generation plant.
The economy of Columbia and Boone County has historically been very stable due
to the presence of the University of Missouri. Callaway and Boone Counties have
an estimated combined population of 159,000, with Callaway County having an
estimated population of only 35,000. Over the last five years, both Callaway and
Boone County have experienced growth in population and households exceeding the
state and national averages in percentage terms, although the actual numbers are
small given the relatively small size of these counties. Unemployment is
currently low, with unemployment rates of 3.5% in Callaway County and 1.1% in
Boone County in March 1996.
The Savings Bank faces competition from many financial institutions for
deposits and loan originations. See "-- Competition" and "RISK FACTORS --
Dependence on Local Economy and Competition Within Market Area."
Lending Activities
General. The principal lending activity of the Savings Bank is the
origination and purchase of conventional mortgage loans for the purpose of
purchasing or refinancing owner-occupied, one- to four-family residential
property. The Savings Bank also originates multi-family, commercial real
estate, construction, land and consumer and other loans. The Savings Bank's net
loans receivable totalled $73.9 million at April 30, 1996, representing 86.4% of
consolidated total assets.
Loan Portfolio Analysis. The following table sets forth the
composition of the Savings Bank's loan portfolio by type of loan at the dates
indicated. The Savings Bank had no concentration of loans exceeding 10% of total
gross loans other than as disclosed below.
<TABLE>
<CAPTION>
At April 30,
-------------------------------------------------------
1996 1995 1994
----------------- -------------- -----------------
Amount Percent Amount Percent Amount Percent
------- -------- ------- -------- ------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
One- to four-family........ $46,741 59.61% $46,244 65.37% $42,088 66.46%
Multi-family............... 3,845 4.90 3,588 5.07 3,379 5.34
Commercial................. 8,706 11.10 6,560 9.27 5,877 9.28
Construction............... 7,686 9.80 5,142 7.27 3,938 6.22
Land....................... 1,518 1.94 1,188 1.68 1,129 1.78
------- ------ ------- ------ ------- ------
Total mortgage loans..... 68,496 87.35 62,722 88.66 56,411 89.08
Consumer and other loans.... 9,922 12.65 8,020 11.34 6,917 10.92
------- ------ ------- ------ ------- ------
Total loans.............. 78,418 100.00% 70,742 100.00% 63,328 100.00%
====== ====== ======
Less:
Undisbursed loan funds..... 3,743 2,175 2,381
Allowance for loan losses.. 782 762 665
------- ------- -------
Loan receivable, net..... $73,893 $67,805 $60,282
======= ======= =======
</TABLE>
32
<PAGE>
Residential Real Estate Lending. The primary lending activity of the
Savings Bank is the origination of mortgage loans to enable borrowers to
purchase existing one- to four-family homes. At April 30, 1996, $46.7 million,
or 59.6% of the Savings Bank's total gross loan portfolio, consisted of loans
secured by one- to four-family residences. The Savings Bank presently
originates both ARM loans and fixed-rate mortgage loans. The Savings Bank's
loans are generally underwritten and documented in accordance with the
guidelines established by the Federal Home Loan Mortgage Corporation ("FHLMC").
The Savings Bank generally sells to FHLMC or Fannie Mae (formerly known as the
Federal National Mortgage Association) all of the fixed-rate mortgage loans that
it originates. Generally, the Savings Bank sells whole loans to FHLMC and
Fannie Mae on a servicing-retained basis. All loans are sold without recourse.
The Savings Bank also sells a portion of the ARM loans that it originates to
other financial institutions. Such loans generally are sold on a servicing-
retained basis and the Savings Bank occasionally retains a participation
interest in the loan. The Savings Bank's decision to hold or sell loans is
based on its asset/liability management policies and goals and the market
conditions for mortgages. See "-- Lending Activities -- Loan Originations,
Sales and Purchases." At April 30, 1996 $62.3 million, or 79.5% of the Savings
Bank's total gross loans, were subject to periodic interest rate adjustments.
The Savings Bank offers ARM loans at rates and terms competitive with
market conditions. Substantially all of the ARM loans originated by the Savings
Bank meet the underwriting standards of FHLMC. The Savings Bank offers ARM
products that adjust either annually or every three years. These ARM products
utilize the national quarterly cost of funds index as published by the OTS plus
a margin of 3.0%. The initial interest rate on the Savings Bank's ARM loans is
generally at or near the fully indexed rate. Until recently, the Savings Bank's
ARM loans utilized the 8th District Cost of Funds Index. Accordingly, most of
the Savings Bank's ARM portfolio is based on this index. The Savings Bank
switched from the 8th District to the national cost of funds index because it
believes that the national cost of funds index is more stable and cannot easily
be influenced by the deposit pricing and borrowing costs of a few institutions.
Both the 8th District and the national cost of funds indices are lagging market
indices, which means that upward adjustments in these indices may occur more
slowly than changes in the Savings Bank's cost of interest-bearing liabilities,
especially during periods of rapidly increasing interest rates. ARM loans held
in the Savings Bank's portfolio do not permit negative amortization of principal
and carry no prepayment restrictions. The periodic interest rate cap (the
maximum amount by which the interest rate may be increased or decreased in a
given period) on the Savings Bank's ARM loans is generally 1.0% to 1.5% per
adjustment period and the lifetime interest rate cap is generally 4.5% to 6.0%
over the initial interest rate of the loan. The terms and conditions of the ARM
loans offered by the Savings Bank, including the index for interest rates, may
vary from time to time. Borrower demand for ARM loans versus fixed-rate
mortgage loans is a function of the level of interest rates, the expectations of
changes in the level of interest rates and the difference between the initial
interest rates and fees charged for each type of loan. The relative amount of
fixed-rate mortgage loans and ARM loans that can be originated at any time is
largely determined by the demand for each in a competitive environment.
The Savings Bank also offers ARM loans for non-owner-occupied one- to four-
family homes. The rates on such loans are generally slightly higher than for a
comparable loan for an owner-occupied residence. Loans secured by non-owner-
occupied residences generally involve greater risks than loans secured by owner-
occupied residences. Payments on loans secured by such properties are often
dependent on the successful operation or management of the properties. In
addition, repayment of such loans may be subject to a greater extent to adverse
conditions in the real estate market or the economy. The Savings Bank requires
that borrowers with loans secured by non-owner-occupied homes submit annual
financial statements. See "RISK FACTORS -- Certain Lending Risks."
The retention of ARM loans in the Savings Bank's loan portfolio helps
reduce the Savings Bank's exposure to changes in interest rates. There are,
however, unquantifiable credit risks resulting from the potential of increased
costs due to increased rates to be paid by the customer. It is possible that
during periods of rising interest rates the risk of default on ARM loans may
increase as a result of repricing and the increased payments required by the
borrower. See "RISK FACTORS -- Potential Adverse Impact of Changes in Interest
Rates." Another consideration is that although ARM loans allow the Savings Bank
to increase the sensitivity of its asset base to changes in the interest rates,
the extent of this interest sensitivity is limited by the periodic and lifetime
interest rate adjustment
33
<PAGE>
limits. Because of these considerations, the Savings Bank has no assurance that
yields on ARM loans will be sufficient to offset increases in the Savings Bank's
cost of funds.
While one- to four-family residential real estate loans are normally
originated with 15 to 30 year terms, such loans typically remain outstanding for
substantially shorter periods. This is because borrowers often prepay their
loans in full upon sale of the property pledged as security or upon refinancing
the original loan. In addition, substantially all mortgage loans in the Savings
Bank's loan portfolio contain due-on-sale clauses providing that the Savings
Bank may declare the unpaid amount due and payable upon the sale of the property
securing the loan. Typically, the Savings Bank enforces these due-on-sale
clauses to the extent permitted by law and as business judgment dictates. Thus,
average loan maturity is a function of, among other factors, the level of
purchase and sale activity in the real estate market, prevailing interest rates
and the interest rates payable on outstanding loans.
The Savings Bank generally requires title insurance insuring the status of
its lien or a title abstract and acceptable attorney's opinion on all loans
where real estate is the primary source of security. The Savings Bank also
requires that fire and casualty insurance (and, if appropriate, flood insurance)
be maintained in an amount at least equal to the outstanding loan balance.
The Savings Bank's lending policies generally limit the maximum loan-to-
value ratio on mortgage loans secured by owner-occupied properties to 95% of the
lesser of the appraised value or the purchase price, with the condition that
private mortgage insurance is generally required on loans with loan-to-value
ratios greater than 80%. The maximum loan-to-value ratio on mortgage loans
secured by non-owner-occupied properties is generally 80%.
Multi-Family Residential and Commercial Real Estate Lending. Multi-family
residential and commercial real estate lending has been a constant part of the
Savings Bank's lending strategy in recent years. At April 30, 1996, the Savings
Bank's loan portfolio included $3.8 million in multi-family real estate loans
and $8.7 million in commercial real estate loans. The Savings Bank frequently
sells participation interests in the larger multi-family and commercial real
estate loans that it originates. The Savings Bank retains the servicing rights
on such loans and generally retains 10% or 20% of the loan balance.
Multi-family and commercial real estate loans originated by the Savings
Bank are predominately adjustable rate loans and are generally for terms of up
to 20 years. The maximum loan-to-value ratio for multi-family and commercial
real estate loans is generally 75%. Multi-family loans typically are secured by
small to medium sized projects. The Savings Bank's commercial real estate loan
portfolio consists predominantly of loans secured by residential care
facilities, nursing homes, medical buildings, small shopping centers, small
office buildings and churches, most of which are located in the Savings Bank's
market area. Appraisals on properties that secure multi-family and commercial
real estate loans are performed by an independent appraiser engaged by the
Savings Bank before the loan is made. Underwriting of multi-family loans
includes a thorough analysis of the cash flows generated by the real estate to
support the debt service and the financial resources, experience, and income
level of the borrowers. Annual operating statements on each multi-family and
commercial real estate loan are required and reviewed by management.
Multi-family and commercial real estate lending affords the Savings Bank an
opportunity to receive interest at rates higher than those generally available
from one- to four-family residential lending. However, loans secured by such
properties usually are greater in amount, more difficult to evaluate and monitor
and, therefore, involve a greater degree of risk than one- to four-family
residential mortgage loans. Because payments on loans secured by multi-family
and commercial properties are often dependent on the successful operation and
management of the properties, repayment of such loans may be affected by adverse
conditions in the real estate market or the economy. The Savings Bank seeks to
minimize these risks by limiting the maximum loan-to-value ratio to 75% and
strictly scrutinizing the financial condition of the borrower, the quality of
the collateral and the management of the property securing the loan. The
Savings Bank also obtains loan guarantees from financially capable parties based
on a review of personal financial statements.
34
<PAGE>
Construction Lending. The Savings Bank originates residential construction
loans to individuals and, occasionally, to builders, to construct one- to four-
family homes. In addition, the Savings Bank occasionally originates
construction loans for multi-family or commercial properties. In addition, the
Savings Bank occasionally originates speculative construction loans, i.e, where
purchasers for the finished homes may be identified either during or following
the construction period. The Savings Bank limits the number of speculative
loans to a single builder in order to limit risk. At April 30, 1996, the
Savings Bank's construction loan portfolio totalled $7.7 million, or 9.8% of
total gross loans. At such date, the Savings Bank's construction loan portfolio
consisted of 56 residential construction loans totalling $6.3 million and four
commercial real estate construction loans totalling $1.4 million.
Construction loans are generally made in connection with permanent
financing. Construction loans that are not made in connection with the granting
of permanent financing on the property are for terms of six months.
Construction lending is considered to involve a higher level of risk as
compared to one- to four-family residential lending because of the inherent
difficulty in estimating both a property's value at completion of the project
and the estimated cost of the project. The nature of these loans is such that
they are more difficult to evaluate and monitor. If the estimate of value
proves to be inaccurate, the Savings Bank may be confronted at, or prior to, the
maturity of the loan, with a project the value of which is insufficient to
assure full repayment. The Savings Bank attempts to minimize these risks by
limiting the maximum loan-to-value ratio on construction loans to 85% for
residential construction loans and 80% for non-residential construction loans
and by conditioning disbursements on the presentation of itemized bills and an
inspection of the construction site. For non-residential construction loans,
the Savings Bank generally obtains personal guarantees and requires borrowers to
submit annual financial statements.
Land Lending. The Savings Bank occasionally originates loans for the
acquisition of land upon which the purchaser can then build or make improvements
necessary to build or to sell as improved lots. At April 30, 1996, the Savings
Bank's land loan portfolio totalled $1.5 million and consisted of 30 loans.
Land loans originated by the Savings Bank are generally adjustable-rate loans
and have maturities of ten to 20 years.
Loans secured by undeveloped land or improved lots involve greater risks
than one- to four-family residential mortgage loans because such loans are more
difficult to evaluate. If the estimate of value proves to be inaccurate, in the
event of default and foreclosure the Savings Bank may be confronted with a
property the value of which is insufficient to assure full repayment. The
Savings Bank attempts to minimize this risk by limiting the maximum loan-to-
value ratio on land loans to 65%.
Consumer and Other Lending. The Savings Bank originates a variety of
consumer and other non-mortgage loans. Consumer loans generally have shorter
terms to maturity and higher interest rates than mortgage loans. The Savings
Bank's consumer and other loans consist primarily of secured consumer loans,
automobile loans, home improvement loans, deposit account loans and student
loans. The Savings Bank also engages in a small amount of commercial business
lending. Such loans include asset-based loans secured by inventory and short-
term working capital loans. At April 30, 1996, the Savings Bank's consumer and
other loans totalled approximately $9.9 million, or 12.6%, of the Savings Bank's
total gross loans.
Consumer loans entail greater risk than do residential mortgage loans,
particularly in the case of consumer loans that are unsecured or secured by
rapidly depreciating assets such as automobiles. In such cases, 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. The remaining deficiency often does not warrant
further substantial collection efforts against the borrower beyond obtaining a
deficiency judgment. In addition, consumer loan collections are dependent on the
borrower's continuing financial stability, and thus are more likely to be
adversely affected by job loss, divorce, illness or personal bankruptcy.
Furthermore, the application of various federal and state laws, including
federal and state bankruptcy and insolvency laws, may limit the amount that can
be recovered on such loans. At April 30, 1996, the Savings Bank had no material
delinquencies in its consumer loan portfolio.
35
<PAGE>
Maturity of Loan Portfolio. The following table sets forth certain
information at April 30, 1996 regarding the dollar amount of principal
repayments becoming due during the periods indicated for loans. All loans are
included in the period in which the final contractual payment is due. Demand
loans, loans having no stated schedule of repayments and no stated maturity, and
overdrafts are reported as becoming due within one year. The table does not
include any estimate of prepayments which significantly shorten the average life
of all loans and may cause the Savings Bank's actual repayment experience to
differ from that shown below.
<TABLE>
<CAPTION>
After After After
One Year 3 Years 5 Years
Within Through Through Through Beyond
One Year 3 Years 5 Years 10 Years 10 Years Total
----------- ------- ------- -------- -------- -------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
One- to four-family..... $ 307 $1,142 $1,194 $4,837 $39,261 $46,741
Multi-family............ 4 55 49 266 3,471 3,845
Commercial.............. -- 285 444 613 7,364 8,706
Construction............ 7,686(1) -- -- -- -- 7,686
Land.................... 347 56 27 79 1,009 1,518
Consumer and other loans.. 3,556 3,478 1,566 974 348 9,922
------- ------ ------ ------ ------- -------
Total gross loans..... $11,900 $5,016 $3,280 $6,769 $51,453 $78,418
======= ====== ====== ====== ======= =======
- --------------
</TABLE>
(1) Includes 32 loans totalling $4.5 million that will convert to permanent
loans.
The following table sets forth the dollar amount of all loans due after April
30, 1997, which have fixed interest rates and have floating or adjustable
interest rates.
<TABLE>
<CAPTION>
Fixed- Floating- or
Rates Adjustable-Rates
------- ----------------
(In Thousands)
<S> <C> <C>
Mortgage loans:
One- to four-family...... $ 4,677 $41,757
Multi-family............. -- 3,841
Commercial............... 1,301 7,405
Construction............. -- --
Land..................... 57 1,114
Consumer and other loans.. 5,835 531
------- -------
Total gross loans $11,870 $54,648
======= =======
</TABLE>
36
<PAGE>
Scheduled contractual principal repayments of loans do not reflect the
actual life of such assets. The average life of a loan is substantially less
than its contractual terms because of prepayments. In addition, due-on-sale
clauses on loans generally give the Savings Bank the right to declare loans
immediately due and payable in the event, among other things, that the borrower
sells the real property subject to the mortgage and the loan is not repaid. The
average life of mortgage loans tends to increase, however, when current mortgage
loan market rates are substantially higher than rates on existing mortgage loans
and, conversely, decrease when rates on existing mortgage loans are
substantially higher than current mortgage loan market rates.
Loan Solicitation and Processing. Loan applicants come primarily through
existing customers, referrals by realtors, homebuilders and existing customers,
and walk-ins. The Savings Bank also uses radio and newspaper advertising to
create awareness of its loan products. Upon receipt of a loan application from
a prospective borrower, a credit report and other data are obtained to verify
specific information relating to the loan applicant's employment, income and
credit standing. An appraisal of the real estate offered as collateral
generally is undertaken by an independent fee appraiser certified by the State
of Missouri.
Real estate loans up to $250,000 must be approved by the Loan Committee,
which consists of the President and three non-employee Directors. Loans
exceeding $250,000 must be approved by the entire Board of Directors. The
Savings Bank's loan approval process allows mortgage loans to be approved in
approximately five days and closed in 20 days. Consumer loans may be approved
by any loan officer. Non-mortgage loans exceeding $100,000 must be approved by
the entire Board of Directors.
Loan Originations, Sales and Purchases. While the Savings Bank originates
both adjustable-rate and fixed-rate loans, its ability to generate each type of
loan is dependent upon relative customer demand for loans in its market. For
the years ended April 30, 1996, 1995 and 1994, the Savings Bank originated $51.3
million, $35.7 million and $43.1 million of loans, respectively. Of the $51.3
million of loans originated during the year ended April 30, 1996, 81.2% were
adjustable-rate loans and 18.8% were fixed-rate loans.
The Savings Bank generally sells all of its fixed-rate single-family
residential mortgage loans to the FHLMC or Fannie Mae and a portion of its
residential ARM loans to other financial institutions. Sales are made on a non-
recourse basis with servicing retained. Sales of loans to FHLMC and Fannie Mae
are whole loans, whereas the Savings Bank frequently retains a participation
interest in residential ARM loans sold to other financial institutions. The
Savings Bank also sells participation interests to other financial institutions
in the larger multi-family, commercial real estate and construction loans that
it originates. Such sales are also made on a non-recourse basis with servicing
retained. The Savings Bank has obtained commitments from several financial
institutions to purchase loans up to a specified aggregate amount. Sales of
loans and loan participations for the years ended April 30, 1996, 1995, and 1994
totalled $22.6 million, $11.8 million and $20.3 million, respectively. Sales of
loans generally are beneficial to the Savings Bank since these sales increase
the size of the Savings Bank's loan servicing portfolio. See "-- Lending
Activities -- Loan Servicing." Loan sales also provide funds for additional
lending and other investments and increase liquidity. In addition, sales of
participation interests in non-residential mortgage loans help to reduce the
risks associated with this type of lending. At April 30, 1996, the Savings Bank
had $2.3 million in loans held for sale.
37
<PAGE>
The following table shows total loans originated, purchased, sold and
repaid during the periods indicated.
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------
1996 1995 1994
------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Loans originated:
Mortgage loans:
One- to four-family............ $25,263 $19,150 $28,856
Multi-family................... 4,519 545 308
Commercial..................... 4,415 1,167 2,242
Construction................... 8,365 7,683 5,355
Land........................... 655 108 110
Consumer and other loans......... 8,079 7,002 6,249
------- ------- -------
Total loans originated....... 51,296 35,655 43,120
Loans purchased:
Mortgage loans:
One- to four-family............ -- 669 --
Construction................... 484 277 --
------- ------- -------
Total loans purchased........ 484 946 --
Loans sold:
Whole loans.................... 3,812 1,617 13,311
Participations................. 18,820 10,191 7,032
------- ------- -------
Total loans sold.............. 22,632 11,808 20,343
Less:
Principal repayments........... 20,463 16,507 18,823
Transfer to real estate owned.. 271 93 49
Loans held for sale............ 2,306 573 --
------- ------- -------
23,040 17,173 18,872
------- ------- -------
Net increase in loans
receivable, net................. $6,108 $7,620 $3,905
======= ======= =======
</TABLE>
Loan Commitments. The Savings Bank occasionally issues commitments to
originate loans conditioned upon the occurrence of certain events. Such
commitments are made on specified terms and conditions and are honored for up to
45 days from the date of loan approval. The Savings Bank had outstanding net
loan commitments of approximately $7.8 million at April 30, 1996.
Loan Origination and Other Fees. The Savings Bank, in some instances,
receives loan origination fees. Loan fees are a fixed dollar amount or a
percentage of the principal amount of the mortgage loan which is charged to the
borrower for funding the loan. The amount of fees charged by the Savings Bank
is currently $300 for loans secured by owner-occupied, single-family homes and
$500 for most larger loans. Current accounting standards require fees received
(net of certain loan origination costs) for originating loans to be deferred and
amortized into interest income over the contractual life of the loan. Net
deferred fees or costs associated with loans that are prepaid are recognized as
income at the time of prepayment.
Loan Servicing. The Savings Bank sells loans to FHLMC, Fannie Mae and other
financial institutions on a servicing-retained basis and receives fees in return
for performing the traditional services of collecting individual payments and
managing the loans. At April 30, 1996, the Bank was servicing $84.4 million of
loans for others. Loan servicing includes processing payments, accounting for
loan funds and collecting and paying real estate taxes,
38
<PAGE>
hazard insurance and other loan-related items such as private mortgage
insurance. When the Savings Bank receives the gross mortgage payment from
individual borrowers, it remits to the investor in the mortgage a predetermined
net amount based on the yield on that mortgage. The difference between the
coupon on the underlying mortgage and the predetermined net amount paid to the
investor is the gross loan servicing fee. For the year ended April 30, 1996,
loan servicing fees totalled $281,000. In addition, the Savings Bank retains
certain amounts in escrow for the benefit of the investor for which the Savings
Bank incurs no interest expense but is able to invest. At April 30, 1996, the
Savings Bank held $213,000 in escrow for its portfolio of loans serviced for
others.
Nonperforming Assets and Delinquencies. When a mortgage loan borrower fails
to make a required payment when due, the Savings Bank institutes collection
procedures. The first notice is mailed to the borrower approximately ten days
after the payment is due in order to permit the borrower to make the payment
before the imposition of a late fee. A second notice is generated when a
payment becomes 20 days past due. Attempts to contact the borrower by telephone
or letter generally begin when a payment becomes 30 days past due. If a
satisfactory response is not obtained, continuous follow-up contacts are
attempted until the loan has been brought current. Before the 90th day of
delinquency, attempts to interview the borrower, preferably in person, are made
to establish (i) the cause of the delinquency, (ii) whether the cause is
temporary, (iii) the attitude of the borrower toward the debt, and (iv) a
mutually satisfactory arrangement for curing the default.
In most cases, delinquencies are cured promptly; however, if by the 91st day
of delinquency, or sooner if the borrower is chronically delinquent and all
reasonable means of obtaining payment on time have been exhausted, foreclosure,
according to the terms of the security instrument and applicable law, is
initiated. Interest income on loans is reduced by the full amount of accrued
and uncollected interest.
The Savings Bank's Board of Directors is informed on a monthly basis as to
the status of all loans that are delinquent more than 60 days, the status on all
loans currently in foreclosure, and the status of all foreclosed and repossessed
property owned by the Savings Bank.
39
<PAGE>
The following table sets forth information with respect to the Savings
Bank's nonperforming assets and restructured loans within the meaning of SFAS
No. 15 at the dates indicated. It is the policy of the Savings Bank to cease
accruing interest on loans 90 days or more past due.
<TABLE>
<CAPTION>
At April 30,
-------------------------
1996 1995 1994
------- ------ --------
(Dollars in Thousands)
<S> <C> <C> <C>
Loans accounted for on
a nonaccrual basis:
Mortgage loans:
One- to four-family.......................... $ 175 $ 135 $ 247
Commercial................................... 69 -- 642
Consumer and other loans...................... 75 18 32
----- ----- ------
Total................................... 319 153 921
Accruing loans which are
contractually past due 90 days or more........ -- -- --
----- ----- ------
Total of nonaccrual and
90 days past due loans........................ 319 153 921
Real estate owned, net......................... 197 5 203
----- ----- ------
Total nonperforming assets................ $ 516 $ 158 $1,124
===== ===== ======
Restructured loans............................. $ 271 $ 273 $ 260
Nonaccrual and 90 days or more past due loans
as a percentage of loans receivable, net...... 0.43% 0.23% 1.53%
Nonaccrual and 90 days or more past due loans
as a percentage of total assets............... 0.37 0.19 1.25
Nonperforming assets as a percentage of
total assets.................................. 0.60 0.20 1.53
</TABLE>
Interest income that would have been recorded for the year ended April
30, 1996 had nonaccruing loans been current in accordance with their original
terms amounted to approximately $10,000. The amount of interest included in
interest income on such loans for the year ended April 30, 1996 amounted to
approximately $6,000.
Real Estate Owned and Held for Investment. Real estate acquired by
the Savings Bank as a result of foreclosure or by deed-in-lieu of foreclosure is
classified as real estate owned ("REO") until it is sold. When property is
acquired it is recorded at the lower of its cost, which is the unpaid principal
balance of the related loan plus foreclosure costs, or fair market value.
Subsequent to foreclosure, REO is carried at the lower of the foreclosed amount
or fair value, less estimated selling costs. At April 30, 1996, the Savings
Bank had $197,000 of REO, which consisted of one commercial building lot.
Real estate held for investment ("REI") is carried at the lower of
cost or net realizable value. All costs of anticipated disposition are
considered in the determination of net realizable value. At April 30, 1996, the
Savings Bank's REI totalled $253,000 and consisted of seven condominium units
and additional building lots, all of which
40
<PAGE>
are part of a single development consisting of ten units. The Savings Bank
acquired five units and the additional building lots through foreclosure and
purchased two additional units. The Savings Bank has subsequently purchased the
remaining three units, which it believes will facilitate the sale of the entire
development.
Asset Classification. The OTS has adopted various regulations regarding
problem assets of savings institutions. The regulations require that each
insured institution review and classify its assets on a regular basis. In
addition, in connection with examinations of insured institutions, OTS examiners
have authority to identify problem assets and, if appropriate, require them to
be classified. There are three classifications for problem assets: substandard,
doubtful and loss. Substandard assets have one or more defined weaknesses and
are characterized by the distinct possibility that the insured institution will
sustain some loss if the deficiencies are not corrected. Doubtful assets have
the weaknesses of substandard assets with the additional characteristic that the
weaknesses make collection or liquidation in full on the basis of currently
existing facts, conditions and values questionable, and there is a high
possibility of loss. An asset classified as loss is considered uncollectible and
of such little value that continuance as an asset of the institution is not
warranted. If an asset or portion thereof is classified as loss, the insured
institution establishes specific allowances for loan losses for the full amount
of the portion of the asset classified as loss. All or a portion of general loan
loss allowances established to cover possible losses related to assets
classified substandard or doubtful may be included in determining an
institution's regulatory capital, while specific valuation allowances for loan
losses generally do not qualify as regulatory capital. Assets that do not
currently expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories but possess weaknesses
are classified as special mention and monitored by the Savings Bank.
At April 30, 1996, assets classified as substandard or special mention
totalled $1.5 million and included 30 substandard loans, which consisted of 15
one- to four-family mortgage loans totalling $664,000, 5 commercial real estate
loans totalling $84,000 and 10 consumer loans totalling $50,000, and 27 special
mention loans, which consisted of 20 one- to four-family mortgage loans
totalling $667,000 and 7 consumer loans totalling $41,000. The aggregate
amounts of the Savings Bank's classified assets at the dates indicated were as
follows:
<TABLE>
<CAPTION>
At April 30,
-----------
1996 1995
---- ----
(In Thousands)
<S> <C> <C>
Loss...................... $ -- $ --
Doubtful.................. -- --
Substandard............... 798 1,135
Special mention........... 708 201
------ ------
Total classified assets.. $1,506 $1,336
====== ======
</TABLE>
Allowance for Loan Losses. The Savings Bank has established a systematic
methodology for the determination of provisions for loan losses. The methodology
is set forth in a formal policy and takes into consideration the need for an
overall general valuation allowance as well as specific allowances that are tied
to individual loans.
In originating loans, the Savings Bank recognizes that losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan, general economic conditions and, in the case of a secured loan, the
quality of the security for the loan. The Savings Bank increases its allowance
for loan losses by charging provisions for loan losses against income.
The general valuation allowance is maintained to cover losses inherent
in the portfolio of performing loans. Management's periodic evaluation of the
adequacy of the allowance is based on a number of factors, including
management's evaluation of the collectibility of the loan portfolio, the nature
of the portfolio, credit concentrations, trends in historical loss experience,
specific impaired loans and economic conditions. Specific valuation allowances
are established to absorb
41
<PAGE>
losses on loans for which full collectibility may not be reasonably assured.
The amount of the allowance is based on the estimated value of the collateral
securing the loan and other analyses pertinent to each situation. Generally, a
provision for losses is charged against income on a quarterly basis to maintain
the allowances.
At April 30, 1996, the Savings Bank had an allowance for loan losses
of $782,000. The allowance for loan losses is maintained at an amount
management considers adequate to absorb losses inherent in the portfolio.
Although management believes that it uses the best information available to make
such determinations, future adjustments to the allowance for loan losses may be
necessary and results of operations could be significantly and adversely
affected if circumstances differ substantially from the assumptions used in
making the determinations.
While the Savings Bank believes it has established its existing allowance
for loan losses in accordance with GAAP, there can be no assurance that
regulators, in reviewing the Savings Bank's loan portfolio, will not request the
Savings Bank to increase significantly its allowance for loan losses. In
addition, because future events affecting borrowers and collateral cannot be
predicted with certainty, there can be no assurance that the existing allowance
for loan losses is adequate or that substantial increases will not be necessary
should the quality of any loans deteriorate as a result of the factors discussed
above. Any material increase in the allowance for loan losses may adversely
affect the Savings Bank's financial condition and results of operations.
42
<PAGE>
The following table sets forth an analysis of the Savings Bank's allowance
for loan losses for the periods indicated. Where specific loan loss reserves
have been established, any differences between the loss allowances and the
amount of loss realized has been charged or credited to current income.
<TABLE>
<CAPTION>
Year Ended April 30,
-----------------------------------
1996 1995 1994
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Allowance at beginning of period................... $762 $665 $719
Provision for loan losses.......................... 44 118 48
Recoveries:
Mortgage loans:
One- to four-family.............................. 1 -- --
Multi-family..................................... -- -- --
Commercial....................................... -- -- --
Construction..................................... -- -- --
Land............................................. -- 2 4
Consumer and other loans.......................... 2 26 6
----- ---- ----
Total recoveries............................... 3 28 10
Charge-offs:
Mortgage loans:
One- to four-family.............................. 1 -- --
Multi-family..................................... -- -- --
Commercial....................................... -- -- --
Construction..................................... -- -- --
Land............................................. 10 22 61
Consumer and other loans.......................... 16 27 51
----- ---- ----
Total charge-offs.............................. 27 49 112
----- ---- ----
Net charge-offs................................ 24 21 102
----- ---- ----
Balance at end of period....................... $782 $762 $665
===== ==== ====
Allowance for loan losses as a percentage of
total loans outstanding at the end of the period.. 0.97% 1.07% 1.05%
Net charge-offs as a percentage of average
loans outstanding during the period............... 0.03 0.03 0.17
Allowance for loan losses as a percentage of
nonperforming loans at end of period.............. 245.44 498.05 72.18
</TABLE>
43
<PAGE>
The following table sets forth the breakdown of the allowance for loan
losses by loan category for the periods indicated. Management believes that the
allowance can be allocated by category only on an approximate basis. The
allocation of the allowance to each category is not necessarily indicative of
future losses and does not restrict the use of the allowance to absorb losses in
any other category.
<TABLE>
<CAPTION>
At April 30,
----------------------------------------------------------------
1996 1995 1994
--------------------- --------------- ---------------------
% of % of % of
Loans Loans Loans
in Each in Each in Each
Category Category Category
to Total to Total to Total
Amount Loans Amount Loans Amount Loans
------ -------- ------ ------ ------ --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
One- to four-family..... $ 322 59.61% $ 319 65.37% $251 66.46%
Multi-family............ 38 4.90 36 5.07 34 5.34
Commercial.............. 78 11.10 118 9.27 211 9.28
Construction............ 83 9.80 41 7.27 25 6.22
Land.................... 15 1.94 12 1.68 11 1.78
Consumer and other loans.. 104 12.65 78 11.34 79 10.92
Unallocated............... 142 N/A 158 N/A 54 N/A
----- ---- ----
Total allowance for
loan losses.......... $ 782 $ 762 $665
===== ===== ====
</TABLE>
Investment Activities
- ---------------------
The Savings Bank is permitted under federal and state law to invest in
various types of liquid assets, including U.S. Treasury obligations, securities
of various federal agencies and of state and municipal governments, deposits at
the FHLB-Des Moines, certificates of deposit of federally insured institutions,
certain bankers' acceptances and federal funds. Subject to various
restrictions, the Savings Bank may also invest a portion of its assets in
commercial paper and corporate debt securities. Savings institutions like the
Savings Bank are also required to maintain an investment in FHLB stock. The
Savings Bank is required under federal regulations to maintain a minimum amount
of liquid assets. See "REGULATION" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Liquidity and Capital
Resources."
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," requires the investments be categorized as "held to maturity,"
"trading securities" or "available for sale," based on management's intent as to
the ultimate disposition of each security. SFAS No. 115 allows debt securities
to be classified as "held to maturity" and reported in financial statements at
amortized cost only if the reporting entity has the positive intent and ability
to hold those securities to maturity. Securities that might be sold in response
to changes in market interest rates, changes in the security's prepayment risk,
increases in loan demand, or other similar factors cannot be classified as "held
to maturity." Debt and equity securities held for current resale are classified
as "trading securities." Such securities are reported at fair value, and
unrealized gains and losses on such securities would be included in earnings.
Debt and equity securities not classified as either "held to maturity" or
"trading securities" are classified as "available for sale." Such securities
are reported at fair value, and unrealized gains and losses on such securities
are excluded from earnings and reported as a net amount in a separate component
of equity. It is currently the intention of management to classify all
securities in the Savings Bank's investment portfolio as available for sale.
44
<PAGE>
A committee consisting of the Chief Executive Officer, the Chief Financial
Officer and three outside Directors determines appropriate investments in
accordance with the Board of Directors' approved investment policies and
procedures. The Savings Bank's investment policies generally limit investments
to U.S. Government and agency securities, municipal bonds, certificates of
deposits, marketable corporate debt obligations, mortgage-backed securities and
certain types of mutual funds. The Savings Bank's investment policy does not
permit engaging directly in hedging activities or purchasing high risk mortgage
derivative products or corporate bonds rated less than BBB. Investments are
made based on certain considerations, which include the interest rate, yield,
settlement date and maturity of the investment, the Savings Bank's liquidity
position, and anticipated cash needs and sources (which in turn include
outstanding commitments, upcoming maturities, estimated deposits and anticipated
loan amortization and repayments). The effect that the proposed investment
would have on the Savings Bank's credit and interest rate risk, and risk-based
capital is also given consideration during the evaluation.
The following table sets forth the composition of the Savings Bank's
investment and mortgage-backed securities portfolios at the dates indicated.
<TABLE>
<CAPTION>
At April 30,
---------------------------------------------------------------------------------
1996 1995 1994
------------------------- ------------------------ --------------------------
Carrying Percent of Carrying Percent of Carrying Percent of
Value Portfolio Value Portfolio Value Portfolio
---- ---------- ----- --------- ----- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Available for sale:
Investment securities:
U.S. Government and federal
agency obligations.......... $3,216 100.00% $4,201 99.98% $ -- --%
Mortgage-backed securities.... -- -- 1 .02 -- --
------ ------ ------ ------ ------ ------
Total available for sale.. 3,216 100.00 4,202 100.00 -- --
Held to maturity:
Investment securities:
U.S. Government and federal
agency obligations.......... -- -- -- -- 4,260 78.08
Mortgage-backed securities.... -- -- -- -- 1,196 21.92
------ ------ ------ ------ ------ ------
Total held to maturity... -- -- -- -- 5,456 100.00
------ ------ ------ ------ ------ ------
Total $3,216 100.00% $4,202 100.00% $5,456 100.00%
====== ====== ====== ====== ====== ======
</TABLE>
45
<PAGE>
The table below sets forth certain information regarding the carrying value,
weighted average yields and maturities or periods to repricing of the Savings
Bank's investment and mortgage-backed securities at April 30, 1996.
<TABLE>
<CAPTION>
At April 30, 1996
----------------------------------------------------------------
Amount Due or Repricing within:
Over One to
One Year or Less Five Years Totals
------------------- ---------------------- -------------------
Weighted Weighted Weighted
Carrying Average Carrying Average Carrying Average
Value Yield Value Yield Value Yield
-------- --------- -------- ------------ -------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Government and
federal agency
obligations........ $2,511 5.92% $705 6.65% $3,216 6.08%
</TABLE>
Deposit Activities and Other Sources of Funds
General. Deposits and loan repayments are the major sources of the Savings
Bank's funds for lending and other investment purposes. Scheduled loan
repayments are a relatively stable source of funds, while deposit inflows and
outflows and loan prepayments are influenced significantly by general interest
rates and money market conditions. Borrowings through the FHLB-Des Moines are
used to compensate for reductions in the availability of funds from other
sources. Presently, the Savings Bank has no other borrowing arrangements.
Deposit Accounts. Savings deposits are the primary source of funds for the
Savings Bank's lending and investment activities and for its general business
purposes. Substantially all of the Savings Bank's depositors are residents of
the State of Missouri. Deposits are attracted from within the Savings Bank's
market area through the offering of a broad selection of deposit instruments,
including NOW accounts, money market deposit accounts, regular savings accounts,
certificates of deposit and retirement savings plans. Deposit account terms
vary, according to the minimum balance required, the time periods the funds must
remain on deposit and the interest rate, among other factors. In determining
the terms of its deposit accounts, the Savings Bank considers current market
interest rates, profitability to the Savings Bank, matching deposit and loan
products and its customer preferences and concerns. The Savings Bank reviews
its deposit mix and pricing weekly. The Savings Bank does not accept brokered
deposits, nor has it aggressively sought jumbo certificates of deposit.
The Savings Bank currently offers certificates of deposit for terms not
exceeding 60 months. As a result, the Savings Bank believes that it is better
able to match the repricing of its liabilities to the repricing of its loan
portfolio. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS -- Asset and Liability Management."
In the unlikely event the Savings Bank is liquidated after the Conversion,
depositors will be entitled to full payment of their deposit accounts prior to
any payment being made to the Holding Company, as the sole stockholder of the
Savings Bank.
46
<PAGE>
The following table sets forth information concerning the Savings Bank's
time deposits and other interest-bearing deposits at April 30, 1996.
<TABLE>
<CAPTION>
Weighted Percentage
Average Minimum of Total
Interest Rate Term Checking and Savings Deposits Amount Balance Deposits
- ------------- ---- ----------------------------- ------ ------- ----------
(In Thousands)
<S> <C> <C> <C> <C> <C>
--% None Non-interest bearing $ 200 $ 1,710 2.43%
2.62 None NOW 400 4,259 6.06
3.43 None Money Market Deposit 1,500 3,040 4.32
3.03 None Passbook none 5,910 8.41
Certificates of Deposit
-----------------------
3.70 91 Day Fixed term, fixed rate 1,000 105 0.15
5.21 6 Mo. Fixed term, fixed rate 1,000 6,858 9.75
4.95 9 Mo. Fixed term, fixed rate 1,000 51 0.07
5.62 12 Mo. Fixed term, fixed rate 1,000 14,654 20.84
6.05 18 Mo. Fixed term, fixed rate 1,000 724 1.03
6.75 20 Mo. Fixed term, fixed rate 1,000 100 0.14
6.11 24 Mo. Fixed term, fixed rate 1,000 13,746 19.55
6.18 30 Mo. Fixed term, fixed rate 1,000 2,211 3.15
5.66 36 Mo. Fixed term, fixed rate 1,000 6,078 8.64
5.17 42 Mo. Fixed term, fixed rate 1,000 185 0.26
5.96 48 Mo. Fixed term, fixed rate 1,000 4,793 6.82
6.04 60 Mo. Fixed term, fixed rate 1,000 5,871 8.35
7.59 96 Mo. Fixed term, fixed rate 1,000 21 0.03
------- ------
Total $70,316 100.00%
======= ======
</TABLE>
The following table indicates the amount of the Savings Bank's jumbo
certificates of deposit by time remaining until maturity as of April 30, 1996.
Jumbo certificates of deposit are certificates in amounts of $100,000 or more.
<TABLE>
<CAPTION>
Maturity Period Amount
--------------- --------------
(In Thousands)
<S> <C>
Three months or less................ $ 418
Over three through six months....... 1,123
Over six through 12 months.......... 2,221
Over 12 months...................... 2,117
------
Total jumbo certificates
of deposit.................... $5,879
======
</TABLE>
47
<PAGE>
Deposit Flow. The following table sets forth the balances (inclusive of
interest credited) and changes in dollar amounts of deposits in the various
types of accounts offered by the Savings Bank between the dates indicated.
<TABLE>
<CAPTION>
At April 30,
-------------------------------------------------------------------------------
1996 1995 1994
---------------------------- --------------------------- -----------------
Percent Percent Percent
of Increase of Increase of
Amount Total (Decrease) Amount Total (Decrease) Amount Total
------- -------- ---------- ------- -------- ---------- ------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Passbook............................. $ 5,910 8.41% $ 417 $ 5,493 8.42% $ (995) $ 6,488 10.04%
NOW accounts......................... 4,259 6.06 379 3,880 5.95 (583) 4,463 6.90
Money market deposit................. 3,040 4.32 (1,526) 4,566 7.00 (2,871) 7,437 11.51
Fixed-rate certificates which
mature:
Within 1 year...................... 33,966 48.30 5,286 28,680 43.99 896 27,784 42.99
After 1 year, but within 2 years... 13,322 18.95 940 12,382 18.99 4,097 8,285 12.82
After 2 years, but within 4 years.. 7,662 10.90 (1,017) 8,679 13.31 750 7,929 12.27
After 4 years...................... 447 0.63 (590) 1,037 1.59 (808) 1,845 2.85
Other................................ 1,710 2.43 1,222 488 0.75 89 399 0.62
------- ------ ------- ------- ------ ------- ------- ------
Total.............................. $70,316 100.00% $ 5,111 $65,205 100.00% $ 575 $64,630 100.00%
======= ====== ======= ======= ====== ======= ======= ======
</TABLE>
48
<PAGE>
Time Deposits by Rates. The following table sets forth the time deposits in
the Savings Bank categorized by rates at the dates indicated.
<TABLE>
<CAPTION>
At April 30,
--------------------------------------
1996 1995 1994
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
2.00 - 2.99%........... $ -- $ 8 $ 77
3.00 - 3.99%........... 105 451 14,348
4.00 - 4.99%........... 6,119 12,879 18,785
5.00 - 5.99%........... 26,144 16,993 8,148
6.00 - 6.99%........... 20,261 17,539 3,005
7.00 - 7.99%........... 2,751 2,862 1,424
8.00 - 8.99%........... 17 45 55
9.00 - 9.99%........... -- -- --
10.00 - 10.99%......... -- 1 1
------- ------- -------
Total.................. $55,397 $50,778 $45,843
======= ======= =======
</TABLE>
The following table sets forth the amount and maturities of time deposits at
April 30, 1996.
<TABLE>
<CAPTION>
Amount Due
-----------------------------------------------------------------------
Less Than 1-2 2-3 3-4 After
One Year Years Years Years 4 Years Total
-------- ----- ----- ----- ------- -----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
3.00 - 3.99%..... $ 105 $ -- $ -- $ -- $ -- $ 105
4.00 - 4.99%..... 5,962 157 -- -- -- 6,119
5.00 - 5.99%..... 17,458 6,404 2,130 140 12 26,144
6.00 - 6.99%..... 8,674 6,628 2,117 2,506 336 20,261
7.00 - 7.99%..... 1,767 133 505 261 85 2,751
8.00 - 8.99%..... -- -- 3 -- 14 17
------- ------- ------ ------ ---- -------
Total............ $33,966 $13,322 $4,755 $2,907 $ 447 $55,397
======= ======= ====== ====== ==== =======
</TABLE>
Deposit Activity. The following table sets forth the deposit activities of
the Savings Bank for the periods indicated.
<TABLE>
<CAPTION>
Year Ended April 30,
---------------------------
1996 1995 1994
------- -------- --------
(In Thousands)
<S> <C> <C> <C>
Beginning balance................. $65,205 $64,630 $65,235
------- ------- -------
Net deposits (withdrawals)
before interest credited......... 2,941 (1,037) (2,149)
Interest credited................. 2,170 1,612 1,544
------- ------- -------
Net increase (decrease) in
deposits......................... 5,111 575 (605)
------- ------- -------
Ending balance.................... $70,316 $65,205 $64,630
======= ======= =======
</TABLE>
49
<PAGE>
Borrowings. The Savings Bank utilizes advances from the FHLB-Des
Moines to supplement its supply of lendable funds and to meet deposit withdrawal
requirements. The FHLB-Des Moines functions as a central reserve bank providing
credit for savings associations and certain other member financial institutions.
As a member of the FHLB-Des Moines, the Savings Bank is required to own capital
stock in the FHLB-Des Moines and is authorized to apply for advances on the
security of such stock and certain of its mortgage loans and other assets
(principally securities that are obligations of, or guaranteed by, the U.S.
Government) provided certain creditworthiness standards have been met. Advances
are made pursuant to several different credit programs. Each credit program has
its own interest rate and range of maturities. Depending on the program,
limitations on the amount of advances are based on the financial condition of
the member institution and the adequacy of collateral pledged to secure the
credit.
The following tables sets forth certain information regarding short-
term borrowings by the Bank at the dates and for the periods indicated:
<TABLE>
<CAPTION>
At of For the
Year Ended April 30,
----------------------------
1996 1995 1994
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Maximum amount of FHLB advances outstanding
at any month end during the period ......... $5,500 $4,500 --
Approximate average FHLB advances
outstanding................................. 4,555 3,093 --
Approximate weighted average rate paid on
FHLB advances during the period............. 6.62% 7.23% --
Balance of FHLB advances outstanding
at end of period............................ $5,000 $4,500 --
Weighted average rate paid on
FHLB advances at end of period.............. 6.75% 6.84% --
</TABLE>
Competition
The Savings Bank operates in a competitive market for the attraction of
savings deposits (its primary source of lendable funds) and in the origination
of loans. Its most direct competition for savings deposits has historically
come from local commercial banks and other thrifts operating in its market area.
As of April 30, 1996, there were five commercial banks and two other thrifts
operating in Callaway County, Missouri, of which only one commercial bank was
larger in terms of deposits than the Savings Bank. All of the other financial
institutions in Callaway County are locally owned. A portion of the Callaway
County residents commute to work in either Columbia or Jefferson City and, thus,
there is strong competition from other financial institutions in these larger
metropolitan areas. Particularly in times of high interest rates, the Savings
Bank has faced additional significant competition for investors' funds from
short-term money market securities and other corporate and government
securities. The Savings Bank's competition for loans also comes from mortgage
bankers. Such competition for deposits and the origination of loans may limit
the Savings Bank's growth in the future.
Subsidiary Activities
The Savings Bank has one subsidiary, Multi-Purpose Service Agency, Inc.
("Service Corporation"), whose activities consist primarily of selling credit
life insurance to the Savings Bank's customers. At April 30, 1996, the Savings
Bank's equity investment in its subsidiary was a deficit of $68,000.
50
<PAGE>
Federal savings associations generally may invest up to 3% of their assets
in service corporations, provided that at least one-half of any amount in excess
of 1% is used primarily for community, inner-city and community development
projects. The Savings Bank's investment in its subsidiary did not exceed these
limits at April 30, 1996.
Properties
The Savings Bank operates two full service facilities, both of which it
owns. At April 30, 1996, the net book value of the property (including land and
building) and the Savings Bank's fixtures, furniture and equipment was $1.3
million.
Personnel
As of April 30, 1996, the Savings Bank had 33 full-time and five part-time
employees. The employees are not represented by a collective bargaining unit
and the Savings Bank believes its relationship with its employees to be good.
Legal Proceedings
Periodically, there have been various claims and lawsuits involving the
Savings Bank, such as claims to enforce liens, condemnation proceedings on
properties in which the Savings Bank holds security interests, claims involving
the making and servicing of real property loans and other issues incident to the
Savings Bank's business. In September 1994, a former employee of the Savings
Bank filed a charge of race discrimination against the Savings Bank with the
Missouri Commission on Human Rights and the Equal Employment Opportunity
Commission based on the termination of her employment. The charge is being
investigated by the Missouri Commission on Human Rights. The Savings Bank has
vigorously contested the charge and believes the charge is without merit. No
lawsuit based on this charge has been filed against the Savings Bank. In the
opinion of management, the Savings Bank is not a party to any pending legal
proceedings that it believes would have a material adverse effect on the
financial condition or operations of the Savings Bank.
51
<PAGE>
MANAGEMENT OF THE HOLDING COMPANY
The Board of Directors of the Holding Company consists of seven persons
divided into three classes, each of which contains approximately one third of
the Board. The Directors shall be elected by the stockholders of the Holding
Company for staggered three-year terms, or until their successors are elected
and qualified. One class of Directors, consisting of Messrs. Richard W. Gohring
and Dennis J. Adrian, has a term of office expiring at the first annual meeting
of stockholders, a second class, consisting of Mrs. Bonnie K. Smith and Mr.
David W. West, has a term of office expiring at the second annual meeting of
stockholders, and a third class, consisting of Messrs. Kermit D. Gohring,
Clifford E. Hamilton and Billy M. Conner has a term of office expiring at the
third annual meeting of stockholders. The executive officers of the Holding
Company are elected annually and hold office until their respective successors
have been elected and qualified or until death, resignation or removal by the
Board of Directors.
The following individuals hold the offices set forth opposite their names
below.
Name Position held with Holding Company
---- ----------------------------------
Kermit D. Gohring President and Chief Executive Officer
Richard W. Gohring Vice-President
Bonnie K. Smith Secretary-Treasurer
Since the formation of the Holding Company, none of the executive officers,
directors or other personnel has received remuneration from the Holding Company.
Information concerning the principal occupations, employment and compensation of
the directors and executive officers of the Holding Company during the past five
years is set forth under "MANAGEMENT OF THE SAVINGS BANK -- Biographical
Information."
MANAGEMENT OF THE SAVINGS BANK
Directors and Executive Officers
The Board of Directors of the Savings Bank is presently composed of seven
members who are elected for terms of three years, approximately one third of
whom are elected annually in accordance with the Bylaws of the Savings Bank.
The Savings Bank also has three emeritus directors, Millard F. Stewart, Virgil
A. Johnston and Cecil M. Stock. The executive officers of the Savings Bank are
elected annually by the Board of Directors and serve at the Board's discretion.
The following table sets forth information with respect to the Directors and
executive officers of the Savings Bank.
52
<PAGE>
<TABLE>
<CAPTION>
Current
Director Term
Name Age (1) Position with Savings Bank Since Expires
- ---- ------- -------------------------- -------- -------
<S> <C> <C> <C> <C>
Dennis J. Adrian 47 Director 1995 1999
Billy M. Conner 65 Director 1995 1997
Kermit D. Gohring 60 Chief Executive Officer, President 1967 1998
and Director
Richard W. Gohring 41 Executive Vice President 1989 1998
and Director
Clifford E. Hamilton, Jr. 53 Director 1989 1997
Bonnie K. Smith 51 Senior Vice President, Secretary- 1985 1998
Treasurer and Director
David W. West 58 Director 1995 1999
</TABLE>
- -------------------
(1) As of April 30, 1996.
Biographical Information
Set forth below is certain information regarding the Directors and
executive officers of the Savings Bank. Unless otherwise stated, each Director
and executive officer has held his or her current occupation for the last five
years.
Dennis J. Adrian is the sole owner of Vandelicht Trucking, Inc., a
local trucking company. He is also the President and majority owner of Mo-Con,
Inc., a local concrete mixing and delivery firm with which he has been
associated since 1968.
Billy M. Conner is the co-owner and operator of BCGC, Inc., a local
family farming operation.
Kermit D. Gohring is the President and Chief Executive Officer and a
Director of the Holding Company and the Savings Bank. He has been associated
with the Savings Bank since 1964 and President since 1974.
Richard W. Gohring is Executive Vice President and a Director of the
Savings Bank and Vice-President and a Director of the Holding Company. He has
been associated with the Savings Bank since 1985.
Clifford E. Hamilton, Jr. is a Circuit Judge in Columbia, Missouri and
presently serves as a general jurisdiction judge in the Thirteenth Judicial
Circuit of Missouri, which includes Fulton and Columbia. He currently serves as
the Vice Chairman of the Board.
Bonnie K. Smith is Senior Vice President, Secretary-Treasurer and a
Director of the Savings Bank and Secretary-Treasurer of the Holding Company.
She has been associated with the Savings Bank since 1971.
David W. West is the co-owner and operator of a local family farming
operation.
Meetings and Committees of the Board of Directors
The business of the Savings Bank is conducted through meetings and
activities of the Board of Directors and its committees. During the fiscal year
ended April 30, 1996, the Board of Directors held 15 meetings. No
53
<PAGE>
director attended fewer than 75% of the total meetings of the Board of Directors
and of committees on which such director served.
The Audit Committee, consisting of Directors Hamilton (Chairman),
Conner and West, meets with the Savings Bank's outside auditor to discuss the
results of the annual audit. The Audit Committee met one time during the fiscal
year ended April 30, 1996.
The Salary Committee, consisting of Directors Kermit Gohring
(Chairman), Conner and Hamilton, is responsible for determining compensation for
all employees. The Salary Committee met one time during the fiscal year ended
April 30, 1996.
The Savings Bank also maintains standing Loan, Interest Rate Risk,
Community Reinvestment Act, Nominating and Compliance Committees.
Directors' Compensation
Non-employee Directors receive a fee of $1,000 per month. Employee
Directors receive a fee of $500 per month. It is currently anticipated that,
after completion of the Conversion, directors' fees will continue to be paid by
the Savings Bank and no separate fees will be paid for service on the Board of
Directors of the Holding Company.
Executive Compensation
Summary Compensation Table. The following information is furnished
for the President of the Savings Bank for the year ended April 30, 1996. No
other executive officers of the Savings Bank received salary and bonus in excess
of $100,000 during the year ended April 30, 1996.
<TABLE>
<CAPTION>
Annual Compensation(1)
-------------------------
Name and Other Annual All Other
Position Year Salary($) Bonus($) Compensation($)(2) Compensation($)(3)
- ------------------- ---- ------- -------- -------------------- ------------------
<S> <C> <C> <C> <C> <C>
Kermit D. Gohring 1996 $58,015 $51,029 $6,000 $3,271
President
</TABLE>
- ---------------------------------------
(1) Compensation information for fiscal years ended April 30, 1995 and 1994
has been omitted as the Savings Bank was not a public company nor a
subsidiary thereof at such time.
(2) Consists of directors' fees. The aggregate amount of perquisites and
other personal benefits was less than 10% of the total annual salary and
bonus reported.
(3) Amount contributed by the Savings Bank to 410(k) plan.
Employment Agreements. In connection with the Conversion, the Holding
Company and the Savings Bank (collectively, the "Employers") will enter into a
three-year employment agreement with Mr. Kermit Gohring. The Savings Bank has
eliminated its bonus program, and under the agreement the initial salary level
for Mr. Gohring will be $96,000, which amount will be paid by the Savings Bank
and may be increased at the discretion of the Board of Directors or an
authorized committee of the Board. On each anniversary of the commencement date
of the agreement, the term of the agreement may be extended for an additional
year. The agreement is terminable by the Employers at any time or upon the
occurrence of certain events specified by federal regulations.
The employment agreement provides for severance payments and other benefits
in the event of involuntary termination of employment in connection with any
change in control of the Employers. Severance payments also will be provided on
a similar basis in connection with a voluntary termination of employment where,
subsequent to
54
<PAGE>
a change in control, Mr. Gohring is assigned duties inconsistent with his
position, duties, responsibilities and status immediately prior to such change
in control. The term "change in control" is defined in the agreements as having
occurred when, among other things, (a) a person other than the Holding Company
purchases shares of Common Stock pursuant to a tender or exchange offer for such
shares, (b) any person (as such term is used in Sections 13(d) and 14(d)(2) of
the Securities Exchange Act of 1934, as amended ("Exchange Act")) is or becomes
the beneficial owner, directly or indirectly, of securities of the Holding
Company representing 25% or more of the combined voting power of the Holding
Company's then outstanding securities, (c) the membership of the Board of
Directors changes as the result of a contested election, or (d) shareholders of
the Holding Company approve a merger, consolidation, sale or disposition of all
or substantially all of the Holding Company's assets, or a plan of partial or
complete liquidation.
The severance payment from the Employers will equal 2.99 times Mr. Gohring's
average annual compensation during the five-year period preceding the change in
control. Such amount will be paid in a lump sum within ten business days
following the termination of employment. Assuming that a change in control had
occurred at April 30, 1996, Mr. Gohring would be entitled to a severance
payments of approximately $271,500. Section 280G of the Internal Revenue Code
of 1986, as amended ("Code"), states that severance payments which equal or
exceed three times the base compensation of the individual are deemed to be
"excess parachute payments" if they are contingent upon a change in control.
Individuals receiving excess parachute payments are subject to a 20% excise tax
on the amount of such excess payments, and the Employers would not be entitled
to deduct the amount of such excess payments.
The agreement restricts Mr. Gohring's right to compete against the Employers
for a period of one year from the date of termination of the agreement if he
voluntarily terminates employment, except in the event of a change in control.
The Holding Company and the Savings Bank intend to enter into similar
employment agreements with Mr. Richard Gohring and Mrs. Bonnie Smith that would
have a term of 18 months and provide for a severance payment in the event of a
change in control equal to 1.5 times the executive's annual compensation during
the five-year period preceding the change in control. The Board of Directors of
the Holding Company or the Savings Bank may, from time to time, also enter into
employment agreements with other senior executive officers.
Benefits
General. The Savings Bank currently pays the premiums for medical, dental,
life and disability insurance benefits for full-time employees, subject to
certain deductibles.
401(k) Plan. The Savings Bank maintains the Fulton Savings Bank 401(k) Plan
(the "401(k) Plan") for the benefit of eligible employees of the Savings Bank.
The 401(k) Plan is intended to be a tax-qualified plan under Sections 401(a) and
401(k) of the Code. Employees of the Savings Bank who have completed 1,000
hours of service during 12 consecutive months and who have attained age 19 are
eligible to participate in the 401(k) Plan. Participants may contribute a
portion of their annual compensation to the 401(k) Plan through a salary
reduction election in an amount not in excess of applicable Code limits. The
limit for 1996 is $9,500. The Savings Bank matches participant contributions on
a discretionary basis. In addition to employer matching contributions, the
Savings Bank may contribute a discretionary amount to the 401(k) Plan in any
plan year which is allocated to individual participants in the proportion that
their annual compensation (excluding commissions) bears to the total
compensation of all participants during the plan year. To be eligible to
receive a discretionary employer contribution, the participant must complete
1,000 hours of service during the plan year and remain employed by the Savings
Bank on the last day of the plan year. Participants are at all times 100%
vested in salary reduction contributions. With respect to employer matching and
discretionary employer contributions, participants vest in such contributions at
the rate of 20% per year beginning with the completion of their third year of
service with full vesting occurring after seven years of service. For the
fiscal year ended April 30, 1996, the Savings Bank incurred total contribution-
related expenses of $19,000 in connection with the 401(k) Plan.
55
<PAGE>
In general, the investment of 401(k) Plan assets is directed by an
investment committee authorized by the Board of Directors of the Savings Bank.
However, in connection with the Conversion, the 401(k) Plan has been amended to
provide participants with the opportunity to direct the investment of up to ___%
of their vested account balance to purchase shares of the Common Stock. A
participant in the 401(k) Plan who elects to purchase Common Stock in the
Conversion through the 401(k) Plan will receive the same subscription priority
and be subject to the same individual purchase limitations as if the participant
had elected to make such purchase using other funds. See "THE CONVERSION --
Limitations on Purchases of Shares."
Employee Stock Ownership Plan. The Board of Directors has authorized the
adoption by the Savings Bank of an ESOP for employees of the Savings Bank to
become effective upon the completion of the Conversion. The ESOP is intended to
satisfy the requirements for an employee stock ownership plan under the Code and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
Full-time employees of the Holding Company and the Savings Bank who have been
credited with at least 1,000 hours of service during a 12-month period and who
have attained age 19 will be eligible to participate in the ESOP.
In order to fund the purchase of up to 8% of the Common Stock to be issued
in the Conversion, it is anticipated that the ESOP will borrow funds from the
Holding Company. Such loan will equal 100% of the aggregate purchase price of
the Common Stock. The loan to the ESOP will be repaid principally from the
Savings Bank's contributions to the ESOP and dividends payable on Common Stock
held by the ESOP over the anticipated ten-year term of the loan. The interest
rate for the ESOP loan is expected to be the prime rate as published in The Wall
Street Journal on the closing date of the Conversion. See "PRO FORMA DATA." In
any plan year, the Savings Bank may make additional discretionary contributions
to the ESOP for the benefit of plan participants in either cash or shares of
Common Stock, which may be acquired through the purchase of outstanding shares
in the market or from individual stockholders or which constitute authorized but
unissued shares or shares held in treasury by the Holding Company. The timing,
amount, and manner of such discretionary contributions will be affected by
several factors, including applicable regulatory policies, the requirements of
applicable laws and regulations, and market conditions.
Shares purchased by the ESOP with the proceeds of the loan will be held in a
suspense account and released on a pro rata basis as the loan is repaid.
Discretionary contributions to the ESOP and shares released from the suspense
account will be allocated among participants on the basis of each participant's
proportional share of total compensation. Forfeitures will be reallocated among
the remaining plan participants.
Participants will vest in their accrued benefits under the ESOP upon the
completion of five years of service. Benefits may be payable upon a
participant's retirement, early retirement, death, disability, or termination of
employment. The Savings Bank's contributions to the ESOP are not fixed, so
benefits payable under the ESOP cannot be estimated.
It is anticipated that Messrs. ______, _____ and ________ will be appointed
by the Board of Directors of the Savings Bank to serve as trustees of the ESOP.
Under the ESOP, the trustees must vote all allocated shares held in the ESOP in
accordance with the instructions of plan participants and allocated shares for
which no instructions are received must be voted in the same ratio on any matter
as those shares for which instructions are given.
Pursuant to SOP 93-6, the Savings Bank will recognize compensation expense
in an amount equal to the fair market value of the ESOP shares when such shares
are committed to be released to participants' accounts.
If the ESOP purchases newly issued shares from the Holding Company, total
stockholders' equity would neither increase nor decrease. However, on a per
share basis, stockholders' equity and per share net earnings would decrease
because of the increase in the number of outstanding shares.
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The ESOP will be subject to the requirements of ERISA and the regulations of
the IRS and the Department of Labor issued thereunder. The Savings Bank intends
to request a determination letter from the IRS regarding the tax-qualified
status of the ESOP. Although no assurance can be given that a favorable
determination letter will be issued, the Savings Bank expects that a favorable
determination letter will be received by the ESOP.
1996 Stock Option Plan. The Board of Directors of the Holding Company
intends to adopt the Stock Option Plan and to submit the Stock Option Plan to
the stockholders for approval at a meeting held no earlier than six months
following consummation of the Conversion. The approval of a majority vote of
the Holding Company's outstanding shares is required prior to the implementation
of the Stock Option Plan within one year of the consummation of the Conversion.
The Stock Option Plan will comply with all applicable regulatory requirements.
However, the Stock Option Plan will not be approved or endorsed by the OTS.
The Stock Option Plan will be designed to attract and retain qualified
management personnel and nonemployee directors, to provide such officers, key
employees and nonemployee directors with a proprietary interest in the Holding
Company as a incentive to contribute to the success of the Holding Company and
the Savings Bank, and to reward officers and key employees for outstanding
performance. The Stock Option Plan will provide for the grant of incentive
stock options ("ISOs") intended to comply with the requirements of Section 422
of the Code and for nonqualified stock options ("NQOs"). Upon receipt of
stockholder approval of the Stock Option Plan, stock options may be granted to
key employees of the Holding Company and its subsidiaries, including the Savings
Bank. Unless sooner terminated, the Stock Option Plan will continue in effect
for a period of ten years from the date the Stock Option Plan is approved by
stockholders.
A number of authorized shares of Common Stock equal to 10% of the number of
shares of Common Stock issued in connection with the Conversion will be reserved
for future issuance under the Stock Option Plan (149,500 shares based on the
issuance of 1,495,000 shares at the maximum of the Estimated Valuation Range).
Shares acquired upon exercise of options will be authorized but unissued shares
or treasury shares. In the event of a stock split, reverse stock split, stock
dividend, or similar event, the number of shares of Common Stock under the Stock
Option Plan, the number of shares to which any award relates and the exercise
price per share under any option may be adjusted by the Committee to reflect the
increase or decrease in the total number of shares of Common Stock outstanding.
The Stock Option Plan will be administered and interpreted by a committee of
the Board of Directors ("Committee"). Under the Stock Option Plan, the
Committee will determine which officers and key employees will be granted
options, whether such options will be ISOs or NQOs, the number of shares subject
to each option, and the exercisability of such options. The per share exercise
price of an option will equal at least 100% of the fair market value of a share
of Common Stock on the date the option is granted. All options granted to
nonemployee directors will be NQOs and such options will be granted at an
exercise price equal to 100% of the fair market value of the Common Stock on the
date the option is granted. Options granted upon the effective date of the
Stock Option Plan will become exercisable ratably over a five-year period
following the date of grant. However, unvested options will be immediately
exercisable in the event of the recipient's death or disability. Unvested
options will also be exercisable following a change in control (as defined in
the Stock Option Plan) of the Holding Company or the Savings Bank to the extent
authorized or not prohibited by applicable law or regulations.
Each stock option that is awarded to an officer or key employee will remain
exercisable at any time on or after the date it vests through the earlier to
occur of the tenth anniversary of the date of grant or three months after the
date on which the optionee terminates employment (one year in the event of the
optionee's termination by reason of death or disability), unless such period is
extended by the Committee. Each stock option that is awarded to a nonemployee
director will remain exercisable through the earlier to occur of the tenth
anniversary of the date of grant or one year (two years in the event of a
nonemployee director's death or disability) following the termination of a
nonemployee director's service on the Board. All stock options are generally
nontransferable except by will or the laws of descent or distribution.
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The Stock Option Plan will also provide that upon the payment of an
"extraordinary dividend" by the Holding Company, each optionee will receive a
cash payment equivalent to the dividends that would have been payable to such
optionee had the options been exercised on or before the record date of such
dividend. For purposes of the Stock Option Plan, an "extraordinary dividend" is
a dividend payable at a rate in excess of the Savings Bank's weighted average
cost of funds on interest-bearing liabilities for the 12-month period preceding
the record date of the dividend.
Under current provisions of the Code, the federal tax treatment of ISOs and
NQOs is different. With respect to ISOs, an optionee who satisfies certain
holding period requirements will not recognize income at the time the option is
granted or at the time the option is exercised. If the holding period
requirements are satisfied, the optionee will generally recognize capital gain
or loss upon a subsequent disposition of the shares of Common Stock received
upon the exercise of a stock option. If the holding period requirements are not
satisfied, the difference between the fair market value of the Common Stock on
the date of grant and the option exercise price, if any, will be taxable to the
optionee at ordinary income tax rates. A federal income tax deduction generally
will not be available to the Holding Company as a result of the grant or
exercise of an ISO, unless the optionee fails to satisfy the holding period
requirements. With respect to NQOs, the grant of an NQO generally is not a
taxable event for the optionee and no tax deduction will be available to the
Holding Company. However, upon the exercise of an NQO, the difference between
the fair market value of the Common Stock on the date of exercise and the option
exercise price generally will be treated as compensation to the optionee upon
exercise, and the Holding Company will be entitled to a compensation expense
deduction in the amount of income realized by the optionee.
Although no specific award determinations have been made, the Savings Bank
anticipates that if stockholder approval is obtained it would provide awards to
its directors, officers and employees to the extent permitted by applicable
regulations. OTS regulations currently provide that no individual officer or
employee may receive more than 25% of the shares reserved for issuance under any
stock compensation plan and that non-employee directors may not receive more
than 5% of such shares individually or 30% in the aggregate for all non-employee
directors.
Management Recognition Plan. Following the Conversion, the Board of
Directors of the Holding Company intends to adopt an MRP for officers,
employees, and nonemployee directors of the Holding Company and the Savings
Bank. The MRP will enable the Holding Company and the Savings Bank to provide
participants with a proprietary interest in the Holding Company as an incentive
to contribute to the success of the Holding Company and the Savings Bank.
The MRP will be submitted to stockholders for approval at a meeting to be
held no earlier than six months following consummation of the Conversion. The
approval of a majority vote of the Holding Company's stockholders is required
prior to implementation of the MRP within one year of the consummation of the
Conversion. The MRP will comply with all applicable regulatory requirements.
However, the OTS will not approve or endorse the MRP. The MRP expects to
acquire a number of shares of Common Stock equal to 4% of the Common Stock
issued in connection with the Conversion (59,800 shares based on the issuance of
1,495,000 shares in the Conversion at the maximum of the Estimated Valuation
Range). Such shares will be acquired on the open market, if available, with
funds contributed by the Holding Company to a trust which the Holding Company
may establish in conjunction with the MRP ("MRP Trust") or from authorized but
unissued shares or treasury shares of the Holding Company.
A committee of the Board of Directors of the Holding Company will administer
the MRP, the members of which will also serve as trustees of the MRP Trust, if
formed. The trustees will be responsible for the investment of all funds
contributed by the Holding Company to the MRP Trust.
Shares of Common Stock granted pursuant to the MRP will be in the form of
restricted stock vesting ratably over a five-year period following the date of
grant. During the period of restriction, all shares will be held in escrow by
the Holding Company or by the MRP Trust. If a recipient terminates employment
for reasons other than death or disability, the recipient will forfeit all
rights to allocated shares that are then subject to restriction. In the event
of the recipient's death or disability, all restrictions will expire and all
allocated shares will become unrestricted.
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In addition, all allocated shares will become unrestricted in the event of a
change in control (as defined in the MRP) of the Holding Company or the Savings
Bank to the extent authorized or not prohibited by applicable law or
regulations. Compensation expense in the amount of the fair market value of the
Common Stock at the date of the grant to the recipient will be recognized during
the years in which the shares vest.
The Board of Directors of the Holding Company may terminate the MRP at any
time and, upon termination, all unallocated shares of Common Stock will revert
to the Holding Company.
A recipient of an MRP award in the form of restricted stock generally will
not recognize income upon an award of shares of Common Stock, and the Holding
Company will not be entitled to a federal income tax deduction, until the
termination of the restrictions. Upon such termination, the recipient will
recognize ordinary income in an amount equal to the fair market value of the
Common Stock at the time and the Holding Company will be entitled to a deduction
in the same amount after satisfying federal income tax withholding requirements.
However, the recipient may elect to recognize ordinary income in the year the
restricted stock is granted in an amount equal to the fair market value of the
shares at that time, determined without regard to the restrictions. In that
event, the Holding Company will be entitled to a deduction in such year and in
the same amount. Any gain or loss recognized by the recipient upon subsequent
disposition of the stock will be either a capital gain or capital loss.
Although no specific award determinations have been made, the Savings Bank
anticipates that if stockholder approval is obtained it would provide awards to
its directors, officers and employees to the extent permitted by applicable
regulations. OTS regulations currently provide that no individual officer or
employee may receive more than 25% of the shares reserved for issuance under any
stock compensation plan.
Transactions with the Savings Bank
Federal regulations require that all loans or extensions of credit to
executive officers and directors must be made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with other persons and must not involve more than the
normal risk of repayment or present other unfavorable features. The Savings
Bank is therefore prohibited from making any new loans or extensions of credit
to the Savings Bank's executive officers and directors at different rates or
terms than those offered to the general public and has adopted a policy to this
effect. In addition, loans made to a director or executive officer in an amount
that, when aggregated with the amount of all other loans to such person and his
or her related interests, are in excess of the greater of $25,000 or 5% of the
Savings Bank's capital and surplus (up to a maximum of $500,000) must be
approved in advance by a majority of the disinterested members of the Board of
Directors. See "REGULATION -- Federal Regulation of Savings Associations --
Transactions with Affiliates." The aggregate amount of loans by the Savings
Bank to its executive officers and directors was $357,000 at April 30, 1996, or
approximately 1.6% of pro forma stockholders' equity (based on the issuance of
the maximum of the Estimated Valuation Range).
REGULATION
General
The Savings Bank is subject to extensive regulation, examination and
supervision by the OTS as its chartering agency, and the FDIC, as the insurer of
its deposits. The activities of federal savings institutions are governed by
the Home Owners' Loan Act, as amended (the "HOLA") and, in certain respects, the
Federal Deposit Insurance Act ("FDIA") and the regulations issued by the OTS and
the FDIC to implement these statutes. These laws and regulations delineate the
nature and extent of the activities in which federal savings associations may
engage. Lending activities and other investments must comply with various
statutory and regulatory capital requirements. In addition, the Savings Bank's
relationship with its depositors and borrowers is also regulated to a great
extent, especially in such matters as the ownership of deposit accounts and the
form and content of the Savings
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Bank's mortgage documents. The Savings Bank must file reports with the OTS and
the FDIC concerning its activities and financial condition in addition to
obtaining regulatory approvals prior to entering into certain transactions such
as mergers with, or acquisitions of, other financial institutions. There are
periodic examinations by the OTS and the FDIC to review the Savings Bank's
compliance with various regulatory requirements. The regulatory structure also
gives the regulatory authorities extensive discretion in connection with their
supervisory and enforcement activities and examination policies, including
policies with respect to the classification of assets and the establishment of
adequate loan loss reserves for regulatory purposes. Any change in such
policies, whether by the OTS, the FDIC or Congress, could have a material
adverse impact on the Holding Company, the Savings Bank and their operations.
The Holding Company, as a savings and loan holding company, will also be
required to file certain reports with, and otherwise comply with the rules and
regulations of, the OTS.
Federal Regulation of Savings Associations
Office of Thrift Supervision. The OTS is an office in the Department of the
Treasury subject to the general oversight of the Secretary of the Treasury. The
OTS generally possesses the supervisory and regulatory duties and
responsibilities formerly vested in the Federal Home Loan Bank Board. Among
other functions, the OTS issues and enforces regulations affecting federally
insured savings associations and regularly examines these institutions.
Federal Home Loan Bank System. The FHLB System, consisting of 12 FHLBs, is
under the jurisdiction of the Federal Housing Finance Board ("FHFB"). The
designated duties of the FHFB are to supervise the FHLBs, to ensure that the
FHLBs carry out their housing finance mission, to ensure that the FHLBs remain
adequately capitalized and able to raise funds in the capital markets, and to
ensure that the FHLBs operate in a safe and sound manner.
The Savings Bank, as a member of the FHLB-Des Moines, is required to acquire
and hold shares of capital stock in the FHLB-Des Moines in an amount equal to
the greater of (i) 1.0% of the aggregate outstanding principal amount of
residential mortgage loans, home purchase contracts and similar obligations at
the beginning of each year, or (ii) 1/20 of its advances (borrowings) from the
FHLB-Des Moines. The Savings Bank is in compliance with this requirement with
an investment in FHLB-Des Moines stock of $637,000 at April 30, 1996.
Among other benefits, the FHLB provides a central credit facility primarily
for member institutions. It is funded primarily from proceeds derived from the
sale of consolidated obligations of the FHLB System. It makes advances to
members in accordance with policies and procedures established by the FHFB and
the Board of Directors of the FHLB-Des Moines.
Federal Deposit Insurance Corporation. The FDIC is an independent federal
agency established originally to insure the deposits, up to prescribed statutory
limits, of federally insured banks and to preserve the safety and soundness of
the banking industry. In 1989 the FDIC also became the insurer, up to the
prescribed limits, of the deposit accounts held at federally insured savings
associations and established two separate insurance funds: the BIF and the SAIF.
As insurer of deposits, the FDIC has examination, supervisory and enforcement
authority over all savings associations.
The Savings Bank's accounts are insured by the SAIF. The FDIC insures
deposits at the Savings Bank to the maximum extent permitted by law. The
Savings Bank currently pays deposit insurance premiums to the FDIC based on a
risk-based assessment system established by the FDIC for all SAIF-member
institutions. Under applicable regulations, institutions are assigned to one of
three capital groups that are based solely on the level of an institution's
capital -- "well capitalized," "adequately capitalized," and "undercapitalized"
- -- which are defined in the same manner as the regulations establishing the
prompt corrective action system, as discussed below. These three groups are
then divided into three subgroups which reflect varying levels of supervisory
concern, from those which are considered to be healthy to those which are
considered to be of substantial supervisory concern. The matrix so created
results in nine assessment risk classifications, with rates currently ranging
from .23% for well capitalized,
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financially sound institutions with only a few minor weaknesses to .31% for
undercapitalized institutions that pose a substantial risk of loss to the SAIF
unless effective corrective action is taken. Until the second half of 1995, the
same matrix applied to BIF-member institutions. The FDIC is authorized to raise
assessment rates in certain circumstances. The Savings Bank's assessments
expensed for the year ended April 30, 1996, totalled $153,000.
Effective January 1, 1996, the FDIC substantially reduced deposit insurance
premiums for well-capitalized, well-managed financial institutions that are
members of the BIF. Under the new assessment schedule, rates were reduced to a
range of 0 to 27 basis points, with approximately 92% of BIF members paying the
statutory minimum annual assessment rate of $2,000. With respect to SAIF member
institutions, the FDIC has retained the existing rate schedule of 23 to 31 basis
points. The Savings Bank is, and after the Conversion will remain, a member of
the SAIF rather than the BIF. See "RISK FACTORS -- Recapitalization of SAIF and
Its Impact on SAIF Premiums."
The FDIC may terminate the deposit insurance of any insured depository
institution if it determines after a hearing that the institution has engaged or
is engaging in unsafe or unsound practices, is in an unsafe or unsound condition
to continue operations, or has violated any applicable law, regulation, order or
any condition imposed by an agreement with the FDIC. It also may suspend
deposit insurance temporarily during the hearing process for the permanent
termination of insurance, if the institution has no tangible capital. If
insurance of accounts is terminated, the accounts at the institution at the time
of termination, less subsequent withdrawals, shall continue to be insured for a
period of six months to two years, as determined by the FDIC. Management is
aware of no existing circumstances that could result in termination of the
deposit insurance of the Savings Bank.
Liquidity Requirements. Under OTS regulations, each savings institution is
required to maintain an average daily balance of liquid assets (cash, certain
time deposits and savings accounts, bankers' acceptances, and specified U.S.
Government, state or federal agency obligations and certain other investments)
equal to a monthly average of not less than a specified percentage (currently
5.0%) of its net withdrawable accounts plus short-term borrowings. OTS
regulations also require each savings institution to maintain an average daily
balance of short-term liquid assets at a specified percentage (currently 1.0%)
of the total of its net withdrawable savings accounts and borrowings payable in
one year or less. Monetary penalties may be imposed for failure to meet
liquidity requirements. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- Liquidity and Capital Resources."
Prompt Corrective Action. Under the FDIA, each federal banking agency is
required to implement a system of prompt corrective action for institutions that
it regulates. The federal banking agencies have promulgated substantially
similar regulations to implement this system of prompt corrective action. Under
the regulations, an institution shall be deemed to be (i) "well capitalized" if
it has a total risk-based capital ratio of 10.0% or more, has a Tier I risk-
based capital ratio of 6.0% or more, has a leverage ratio of 5.0% or more and is
not subject to specified requirements to meet and maintain a specific capital
level for any capital measure; (ii) "adequately capitalized" if it has a total
risk-based capital ratio of 8.0% or more, a Tier I risk-based capital ratio of
4.0% or more and a leverage ratio of 4.0% or more (3.0% under certain
circumstances) and does not meet the definition of "well capitalized;" (iii)
"undercapitalized" if it has a total risk-based capital ratio that is less than
8.0%, a Tier I risk-based capital ratio that is less than 4.0% or a leverage
ratio that is less than 4.0% (3.0% under certain circumstances); (iv)
"significantly undercapitalized" if it has a total risk-based capital ratio that
is less than 6.0%, a Tier I risk-based capital ratio that is less than 3.0% or a
leverage ratio that is less than 3.0%; and (v) "critically undercapitalized" if
it has a ratio of tangible equity to total assets that is equal to or less than
2.0%.
A federal banking agency may, after notice and an opportunity for a hearing,
reclassify a well capitalized institution as adequately capitalized and may
require an adequately capitalized institution or an undercapitalized institution
to comply with supervisory actions as if it were in the next lower category if
the institution is in an unsafe or unsound condition or has received in its most
recent examination, and has not corrected, a less than satisfactory rating for
asset quality, management, earnings or liquidity. (The OTS may not, however,
reclassify a significantly undercapitalized institution as critically
undercapitalized.)
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An institution generally must file a written capital restoration plan that
meets specified requirements, as well as a performance guaranty by each company
that controls the institution, with the appropriate federal banking agency
within 45 days of the date that the institution receives notice or is deemed to
have notice that it is undercapitalized, significantly undercapitalized or
critically undercapitalized. Immediately upon becoming undercapitalized, an
institution shall become subject to various mandatory and discretionary
restrictions on its operations.
At April 30, 1996, the Savings Bank was categorized as "well capitalized"
under the prompt corrective action regulations of the OTS.
Standards for Safety and Soundness. The FDIA requires the federal banking
regulatory agencies to prescribe, by regulation, standards for all insured
depository institutions relating to: (i) internal controls, information systems
and internal audit systems; (ii) loan documentation; (iii) credit underwriting;
(iv) interest rate risk exposure; (v) asset growth; and (vi) compensation, fees
and benefits. The federal banking agencies adopted regulations and Interagency
Guidelines Prescribing Standards for Safety and Soundness ("Guidelines") to
implement safety and soundness standards required by the FDIA. The Guidelines
set forth the safety and soundness standards that the federal banking agencies
use to identify and address problems at insured depository institutions before
capital becomes impaired. The agencies also proposed asset quality and earnings
standards which, if adopted in final, would be added to the Guidelines. If the
OTS determines that the Savings Bank fails to meet any standard prescribed by
the Guidelines, the agency may require the Savings Bank to submit to the agency
an acceptable plan to achieve compliance with the standard, as required by the
FDIA. OTS regulations establish deadlines for the submission and review of such
safety and soundness compliance plans.
Qualified Thrift Lender Test. All savings associations are required to meet
a qualified thrift lender ("QTL") test to avoid certain restrictions on their
operations. A savings institution that fails to become or remain a QTL shall
either become a national bank or be subject to the following restrictions on its
operations: (i) the association may not make any new investment or engage in
activities that would not be permissible for national banks; (ii) the
association may not establish any new branch office where a national bank
located in the savings institution's home state would not be able to establish a
branch office; (iii) the association shall be ineligible to obtain new advances
from any FHLB; and (iv) the payment of dividends by the association shall be
subject to the rules regarding the statutory and regulatory dividend
restrictions applicable to national banks. Also, beginning three years after
the date on which the savings institution ceases to be a QTL, the savings
institution would be prohibited from retaining any investment or engaging in any
activity not permissible for a national bank and would be required to repay any
outstanding advances to any FHLB. In addition, within one year of the date on
which a savings association controlled by a company ceases to be a QTL, the
company must register as a bank holding company and become subject to the rules
applicable to such companies. A savings institution may requalify as a QTL if
it thereafter complies with the QTL test.
Currently, the QTL test requires that 65% of an institution's "portfolio
assets" (as defined) consist of certain housing and consumer-related assets on a
monthly average basis in nine out of every 12 months. Assets that qualify
without limit for inclusion as part of the 65% requirement are loans made to
purchase, refinance, construct, improve or repair domestic residential housing
and manufactured housing; home equity loans; mortgage-backed securities (where
the mortgages are secured by domestic residential housing or manufactured
housing); FHLB stock; and direct or indirect obligations of the FDIC. In
addition, the following assets, among others, may be included in meeting the
test subject to an overall limit of 20% of the savings institution's portfolio
assets: 50% of residential mortgage loans originated and sold within 90 days of
origination; 100% of consumer and educational loans (limited to 10% of total
portfolio assets); and stock issued by the FHLMC or Fannie Mae. Portfolio
assets consist of total assets minus the sum of (i) goodwill and other
intangible assets, (ii) property used by the savings institution to conduct its
business, and (iii) liquid assets up to 20% of the institution's total assets.
At April 30, 1996, the qualified thrift investments of the Savings Bank were
approximately 84.1% of its portfolio assets.
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Capital Requirements. Under OTS regulations a savings association must
satisfy three minimum capital requirements: core capital, tangible capital and
risk-based capital. Savings associations must meet all of the standards in
order to comply with the capital requirements. The Holding Company is not
subject to any minimum capital requirements.
OTS capital regulations establish a 3% core capital or leverage ratio
(defined as the ratio of core capital to adjusted total assets). Core capital
is defined to include common stockholders' equity, noncumulative perpetual
preferred stock and any related surplus, and minority interests in equity
accounts of consolidated subsidiaries, less (i) any intangible assets, except
for certain qualifying intangible assets; (ii) certain mortgage servicing
rights; and (iii) equity and debt investments in subsidiaries that are not
"includable subsidiaries," which is defined as subsidiaries engaged solely in
activities not impermissible for a national bank, engaged in activities
impermissible for a national bank but only as an agent for its customers, or
engaged solely in mortgage-banking activities. In calculating adjusted total
assets, adjustments are made to total assets to give effect to the exclusion of
certain assets from capital and to account appropriately for the investments in
and assets of both includable and nonincludable subsidiaries. Institutions that
fail to meet the core capital requirement would be required to file with the OTS
a capital plan that details the steps they will take to reach compliance. In
addition, the OTS's prompt corrective action regulation provides that a savings
institution that has a leverage ratio of less than 4% (3% for institutions
receiving the highest CAMEL examination rating) will be deemed to be
"undercapitalized" and may be subject to certain restrictions. See "--Federal
Regulation of Savings Associations -- Prompt Corrective Action."
As required by federal law, the OTS has proposed a rule revising its minimum
core capital requirement to be no less stringent than that imposed on national
banks. The OTS has proposed that only those savings associations rated a
composite one (the highest rating) under the CAMEL rating system for savings
associations will be permitted to operate at or near the regulatory minimum
leverage ratio of 3%. All other savings associations will be required to
maintain a minimum leverage ratio of 4% to 5%. The OTS will assess each
individual savings association through the supervisory process on a case-by-case
basis to determine the applicable requirement. No assurance can be given as to
the final form of any such regulation, the date of its effectiveness or the
requirement applicable to the Savings Bank.
Savings associations also must maintain "tangible capital" not less than
1.5% of the Savings Bank's adjusted total assets. "Tangible capital" is defined,
generally, as core capital minus any "intangible assets" other than purchased
mortgage servicing rights.
Each savings institution must maintain total risk-based capital equal to at
least 8% of risk-weighted assets. Total risk-based capital consists of the sum
of core and supplementary capital, provided that supplementary capital cannot
exceed core capital, as previously defined. Supplementary capital includes (i)
permanent capital instruments such as cumulative perpetual preferred stock,
perpetual subordinated debt and mandatory convertible subordinated debt, (ii)
maturing capital instruments such as subordinated debt, intermediate-term
preferred stock and mandatory convertible subordinated debt, subject to an
amortization schedule, and (iii) general valuation loan and lease loss
allowances up to 1.25% of risk-weighted assets.
The risk-based capital regulation assigns each balance sheet asset held by a
savings institution to one of four risk categories based on the amount of credit
risk associated with that particular class of assets. Assets not included for
purposes of calculating capital are not included in calculating risk-weighted
assets. The categories range from 0% for cash and securities that are backed by
the full faith and credit of the U.S. Government to 100% for repossessed assets
or assets more than 90 days past due. Qualifying residential mortgage loans
(including multi-family mortgage loans) are assigned a 50% risk weight.
Consumer, commercial, home equity and residential construction loans are
assigned a 100% risk weight, as are nonqualifying residential mortgage loans and
that portion of land loans and nonresidential construction loans that do not
exceed an 80% loan-to-value ratio. The book value of assets in each category is
multiplied by the weighing factor (from 0% to 100%) assigned to that category.
These products are then totalled to arrive at total risk-weighted assets. Off-
balance sheet items are included in risk-weighted assets by converting them to
an approximate balance sheet "credit equivalent amount" based on a
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conversion schedule. These credit equivalent amounts are then assigned to risk
categories in the same manner as balance sheet assets and included risk-weighted
assets.
The OTS has incorporated an interest rate risk component into its regulatory
capital rule. Under the rule, savings associations with "above normal" interest
rate risk exposure would be subject to a deduction from total capital for
purposes of calculating their risk-based capital requirements. A savings
association's interest rate risk is measured by the decline in the net portfolio
value of its assets (i.e., the difference between incoming and outgoing
----
discounted cash flows from assets, liabilities and off-balance sheet contracts)
that would result from a hypothetical 200 basis point increase or decrease in
market interest rates divided by the estimated economic value of the
association's assets, as calculated in accordance with guidelines set forth by
the OTS. A savings association whose measured interest rate risk exposure
exceeds 2% must deduct an interest rate risk component in calculating its total
capital under the risk-based capital rule. The interest rate risk component is
an amount equal to one-half of the difference between the institution's measured
interest rate risk and 2%, multiplied by the estimated economic value of the
association's assets. That dollar amount is deducted from an association's
total capital in calculating compliance with its risk-based capital requirement.
Under the rule, there is a two quarter lag between the reporting date of an
institution's financial data and the effective date for the new capital
requirement based on that data. A savings association with assets of less than
$300 million and risk-based capital ratios in excess of 12% is not subject to
the interest rate risk component, unless the OTS determines otherwise. The rule
also provides that the Director of the OTS may waive or defer an association's
interest rate risk component on a case-by-case basis. Under certain
circumstances, a savings association may request an adjustment to its interest
rate risk component if it believes that the OTS-calculated interest rate risk
component overstates its interest rate risk exposure. In addition, certain
"well-capitalized" institutions may obtain authorization to use their own
interest rate risk model to calculate their interest rate risk component in lieu
of the OTS-calculated amount. The OTS has postponed the date that the component
will first be deducted from an institution's total capital until savings
associations become familiar with the process for requesting an adjustment to
its interest rate risk component.
See "HISTORICAL AND PRO FORMA CAPITAL COMPLIANCE" for a table that sets
forth in terms of dollars and percentages the OTS tangible, core and risk-based
capital requirements, the Savings Bank's historical amounts and percentages at
April 30, 1996 and pro forma amounts and percentages based upon the assumptions
stated therein.
Limitations on Capital Distributions. OTS regulations impose uniform
limitations on the ability of all savings associations to engage in various
distributions of capital such as dividends, stock repurchases and cash-out
mergers. In addition, OTS regulations require the Savings Bank to give the OTS
30 days' advance notice of any proposed declaration of dividends, and the OTS
has the authority under its supervisory powers to prohibit the payment of
dividends. The regulation utilizes a three-tiered approach which permits
various levels of distributions based primarily upon a savings association's
capital level.
A Tier 1 savings association has capital in excess of its fully phased-in
capital requirement (both before and after the proposed capital distribution).
Tier 1 savings association may make (without application but upon prior notice
to, and no objection made by, the OTS) capital distributions during a calendar
year up to 100% of its net income to date during the calendar year plus one-half
its surplus capital ratio (i.e., the amount of capital in excess of its fully
----
phased-in requirement) at the beginning of the calendar year or the amount
authorized for a Tier 2 association. Capital distributions in excess of such
amount require advance notice to the OTS. A Tier 2 savings association has
capital equal to or in excess of its minimum capital requirement but below its
fully phased-in capital requirement (both before and after the proposed capital
distribution). Such an association may make (without application) capital
distributions up to an amount equal to 75% of its net income during the previous
four quarters depending on how close the association is to meeting its fully
phased-in capital requirement. Capital distributions exceeding this amount
require prior OTS approval. Tier 3 associations are savings associations with
capital below the minimum capital requirement (either before or after the
proposed capital distribution). Tier 3 associations may not make any capital
distributions without prior approval from the OTS.
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The Savings Bank is currently meeting the criteria to be designated a Tier 1
association and, consequently, could at its option (after prior notice to, and
no objection made by, the OTS) distribute up to 100% of its net income during
the calendar year plus 50% of its surplus capital ratio at the beginning of the
calendar year less any distributions previously paid during the year.
Loans to One Borrower. Under the HOLA, savings institutions are generally
subject to the national bank limit on loans to one borrower. Generally, this
limit is 15% of the Savings Bank's unimpaired capital and surplus, plus an
additional 10% of unimpaired capital and surplus, if such loan is secured by
readily-marketable collateral, which is defined to include certain financial
instruments and bullion. The OTS by regulation has amended the loans to one
borrower rule to permit savings associations meeting certain requirements,
including capital requirements, to extend loans to one borrower in additional
amounts under circumstances limited essentially to loans to develop or complete
residential housing units. At April 30, 1996, the Savings Bank's limit on loans
to one borrower was $1.4 million. At April 30, 1996, the Savings Bank's largest
aggregate amount of loans to one borrower was $977,000.
Activities of Associations and Their Subsidiaries. When a savings
association establishes or acquires a subsidiary or elects to conduct any new
activity through a subsidiary that the association controls, the savings
association must notify the FDIC and the OTS 30 days in advance and provide the
information each agency may, by regulation, require. Savings associations also
must conduct the activities of subsidiaries in accordance with existing
regulations and orders.
The OTS may determine that the continuation by a savings association of its
ownership control of, or its relationship to, the subsidiary constitutes a
serious risk to the safety, soundness or stability of the association or is
inconsistent with sound banking practices or with the purposes of the FDIA.
Based upon that determination, the FDIC or the OTS has the authority to order
the savings association to divest itself of control of the subsidiary. The FDIC
also may determine by regulation or order that any specific activity poses a
serious threat to the SAIF. If so, it may require that no SAIF member engage in
that activity directly.
Transactions with Affiliates. Savings associations must comply with
Sections 23A and 23B of the Federal Reserve Act ("Sections 23A and 23B")
relative to transactions with affiliates in the same manner and to the same
extent as if the savings association were a Federal Reserve member bank. A
savings and loan holding company, its subsidiaries and any other company under
common control are considered affiliates of the subsidiary savings association
under the HOLA. Generally, Sections 23A and 23B: (i) limit the extent to which
the insured association or its subsidiaries may engage in certain covered
transactions with an affiliate to an amount equal to 10% of such institution's
capital and surplus and place an aggregate limit on all such transactions with
affiliates to an amount equal to 20% of such capital and surplus, and (ii)
require that all such transactions be on terms substantially the same, or at
least as favorable to the institution or subsidiary, as those provided to a non-
affiliate. The term "covered transaction" includes the making of loans, the
purchase of assets, the issuance of a guarantee and similar types of
transactions.
Three additional rules apply to savings associations: (i) a savings
association may not make any loan or other extension of credit to an affiliate
unless that affiliate is engaged only in activities permissible for bank holding
companies; (ii) a savings association may not purchase or invest in securities
issued by an affiliate (other than securities of a subsidiary); and (iii) the
OTS may, for reasons of safety and soundness, impose more stringent restrictions
on savings associations but may not exempt transactions from or otherwise
abridge Section 23A or 23B. Exemptions from Section 23A or 23B may be granted
only by the Federal Reserve Board, as is currently the case with respect to all
FDIC-insured banks. The Savings Bank has not been significantly affected by the
rules regarding transactions with affiliates.
The Savings Bank's authority to extend credit to executive officers,
directors and 10% shareholders, as well as entities controlled by such persons,
is currently governed by Sections 22(g) and 22(h) of the Federal Reserve Act,
and Regulation O thereunder. Among other things, these regulations require that
such loans be made on terms and conditions substantially the same as those
offered to unaffiliated individuals and not involve more than the normal
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risk of repayment. Regulation O also places individual and aggregate limits on
the amount of loans the Savings Bank may make to such persons based, in part, on
the Savings Bank's capital position, and requires certain board approval
procedures to be followed. The OTS regulations, with certain minor variances,
apply Regulation O to savings institutions.
Savings and Loan Holding Company Regulations
Holding Company Acquisitions. The HOLA and OTS regulations issued
thereunder generally prohibit a savings and loan holding company, without prior
OTS approval, from acquiring more than 5% of the voting stock of any other
savings association or savings and loan holding company or controlling the
assets thereof. They also prohibit, among other things, any director or officer
of a savings and loan holding company, or any individual who owns or controls
more than 25% of the voting shares of such holding company, from acquiring
control of any savings association not a subsidiary of such savings and loan
holding company, unless the acquisition is approved by the OTS.
Holding Company Activities. 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 association as a separate
subsidiary other than in a supervisory acquisition, it would become a multiple
savings and loan holding company. There generally are more restrictions on the
activities of a multiple savings and loan holding company than on those of a
unitary savings and loan holding company. The HOLA provides that, among other
things, no multiple savings and loan holding company or subsidiary thereof which
is not an insured association shall commence or continue for more than two years
after becoming a multiple savings and loan association holding company or
subsidiary thereof, any business activity other than: (i) furnishing or
performing management services for a subsidiary insured institution, (ii)
conducting an insurance agency or escrow business, (iii) holding, managing, or
liquidating assets owned by or acquired from a subsidiary insured institution,
(iv) holding or managing properties used or occupied by a subsidiary insured
institution, (v) acting as trustee under deeds of trust, (vi) those activities
previously directly authorized by regulation as of March 5, 1987 to be engaged
in by multiple holding companies or (vii) those activities authorized by the
Federal Reserve Board as permissible for bank holding companies, unless the OTS
by regulation, prohibits or limits such activities for savings and loan holding
companies. Those activities described in (vii) above also must be approved by
the OTS prior to being engaged in by a multiple holding company.
Qualified Thrift Lender Test. The HOLA requires any savings and loan
holding company that controls a savings association that fails the QTL test, as
explained under "-- Federal Regulation of Savings Associations --Qualified
Thrift Lender Test," must, within one year after the date on which the
association ceases to be a QTL, register as and be deemed a bank holding company
subject to all applicable laws and regulations.
TAXATION
Federal Taxation
General. The Holding Company and the Savings Bank will report their income
on a calendar year basis using the accrual method of accounting and will be
subject to federal income taxation in the same manner as other corporations with
some exceptions. The following discussion of tax matters is intended only as a
summary and does not purport to be a comprehensive description of the tax rules
applicable to the Savings Bank or the Holding Company.
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Tax Bad Debt Reserves. For taxable years beginning prior to January 1,
1996, savings institutions such as the Savings Bank which met certain
definitional tests primarily relating to their assets and the nature of their
business ("qualifying thrifts") were permitted to establish a reserve for bad
debts and to make annual additions thereto, which additions may, within
specified formula limits, have been deducted in arriving at their taxable
income. The Savings Bank's deduction with respect to "qualifying loans," which
are generally loans secured by certain interests in real property, may have been
computed using an amount based on the Savings Bank's actual loss experience, or
a percentage equal to 8% of the Savings Bank's taxable income, computed with
certain modifications and reduced by the amount of any permitted additions to
the nonqualifying reserve. The Savings Bank's deduction with respect to
nonqualifying loans was computed under the experience method, which essentially
allows a deduction based on the Savings Bank's actual loss experience over a
period of several years. Each year the Savings Bank selected the most favorable
way to calculate the deduction attributable to an addition to the tax bad debt
reserve. The Savings Bank used the percentage method bad debt deduction for the
taxable years ended December 31, 1995, 1994 and 1993. However, the use of the
percentage method for the taxable year ended December 31, 1995 resulted in no
bad debt deduction because of other limitations in the computation.
Recently enacted legislation repealed the reserve method of accounting for
bad debt reserves for tax years beginning after December 31, 1995. As result,
savings associations will no longer be able to calculate their deduction for bad
debts using the percentage-of-taxable-income method. Instead, savings
associations will be required to compute their deduction based on specific
charge-offs during the taxable year or, if the savings association or its
controlled group had assets of less than $500 million, based on actual loss
experience over a period of years. This legislation also requires savings
associations to recapture into income over a six-year period their post-1987
additions to their bad debt tax reserves, thereby generating additional tax
liability. At April 30, 1996, the Savings Bank's post-1987 reserves totalled
approximately $174,000. The recapture may be suspended for up to two years if,
during those years, the institution satisfies a residential loan requirement.
The Savings Bank anticipates that it will meet the residential loan requirement
for the taxable year ending December 31, 1996.
Under prior law, if the Savings Bank failed to satisfy the qualifying
thrift definitional tests in any taxable year, it would be unable to make
additions to its bad debt reserve. Instead, the Savings Bank would be required
to deduct bad debts as they occur and would additionally be required to
recapture its bad debt reserve deductions ratably over a multi-year period. At
April 30, 1996, the Savings Bank's total bad debt reserve for tax purposes was
approximately $1.9 million. Among other things, the qualifying thrift
definitional tests required the Savings Bank to hold at least 60% of its assets
as "qualifying assets." Qualifying assets generally include cash, obligations of
the United States or any agency or instrumentality thereof, certain obligations
of a state or political subdivision thereof, loans secured by interests in
improved residential real property or by savings accounts, student loans and
property used by the Savings Bank in the conduct of its banking business. Under
current law, a savings association will not be required to recapture its pre-
1988 bad debt reserves if it ceases to meet the qualifying thrift definitional
tests.
Distributions. To the extent that the Savings Bank makes "nondividend
distributions" to the Holding Company that are considered as made: (i) from the
reserve for losses on qualifying real property loans, to the extent the reserve
for such losses exceeds the amount that would have been allowed under the
experience method; or (ii) from the supplemental reserve for losses on loans
("Excess Distributions"), then an amount based on the amount distributed will be
included in the Savings Bank's taxable income. Nondividend distributions
include distributions in excess of the Savings Bank's current and accumulated
earnings and profits, distributions in redemption of stock, and distributions in
partial or complete liquidation. However, dividends paid out of the Savings
Bank's current or accumulated earnings and profits, as calculated for federal
income tax purposes, will not be considered to result in a distribution from the
Savings Bank's bad debt reserve. Thus, any dividends to the Holding Company
that would reduce amounts appropriated to the Savings Bank's bad debt reserve
and deducted for federal income tax purposes would create a tax liability for
the Savings Bank. The amount of additional taxable income attributable to an
Excess Distribution is an amount that, when reduced by the tax attributable to
the income, is equal to the amount of the distribution. Thus, if, after the
Conversion, the Savings Bank makes a "nondividend distribution," then
approximately
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one and one-half times the amount so used would be includable in gross income
for federal income tax purposes, assuming a 35% corporate income tax rate
(exclusive of state and local taxes). See "REGULATION" and "DIVIDEND POLICY"
for limits on the payment of dividends by the Savings Bank. The Savings Bank
does not intend to pay dividends that would result in a recapture of any portion
of its tax bad debt reserve.
Corporate Alternative Minimum Tax. The Code imposes a tax on alternative
minimum taxable income ("AMTI") at a rate of 20%. The excess of the tax bad
debt reserve deduction using the percentage of taxable income method over the
deduction that would have been allowable under the experience method is treated
as a preference item for purposes of computing the AMTI. In addition, only 90%
of AMTI can be offset by net operating loss carryovers. AMTI is increased by an
amount equal to 75% of the amount by which the Savings Bank's adjusted current
earnings exceeds its AMTI (determined without regard to this preference and
prior to reduction for net operating losses). For taxable years beginning after
December 31, 1986, and before January 1, 1996, an environmental tax of .12% of
the excess of AMTI (with certain modification) over $2.0 million is imposed on
corporations, including the Savings Bank, whether or not an Alternative Minimum
Tax ("AMT") is paid.
Dividends-Received Deduction and Other Matters. The Holding Company may
exclude from its income 100% of dividends received from the Savings Bank as a
member of the same affiliated group of corporations. The corporate dividends-
received deduction is generally 70% in the case of dividends received from
unaffiliated corporations with which the Holding Company and the Savings Bank
will not file a consolidated tax return, except that if the Holding Company or
the Savings Bank owns more than 20% of the stock of a corporation distributing a
dividend, then 80% of any dividends received may be deducted.
There have not been any IRS audits of the Savings Bank's federal income tax
returns during the past five years.
State Taxation
Missouri. Missouri-based thrift institutions, such as the Savings Bank, are
subject to a special financial institutions tax, based on net income without
regard to net operating loss carryforwards, at the rate of 7% of net income.
This tax is in lieu of certain other state taxes on thrift institutions, on
their property, capital or income, except taxes on tangible personal property
owned by the Savings Bank and held for lease or rental to others and on real
estate, contributions paid pursuant to the Unemployment Compensation Law of
Missouri, social security taxes, sales taxes and use taxes. In addition, the
Savings Bank is entitled to credit against this tax all taxes paid to the State
of Missouri or any political subdivision, except taxes on tangible personal
property owned by the Savings Bank and held for lease or rental to others and on
real estate, contributions paid pursuant to the Unemployment Compensation Law of
Missouri, social security taxes, sales and use taxes, and taxes imposed by the
Missouri Financial Institutions Tax Law. Missouri thrift institutions are not
subject to the regular corporate income tax.
Delaware. As a Delaware holding company not earning income in Delaware, the
Holding Company is exempted from Delaware corporate income tax, but is required
to file an annual report with and pay an annual franchise tax to the State of
Delaware.
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THE CONVERSION
The OTS has given approval to the Plan subject to the Plan's approval by
the members of the Savings Bank entitled to vote on the matter and subject to
the satisfaction of certain other conditions imposed by the OTS in its approval.
OTS approval, however, does not constitute a recommendation or endorsement of
the Plan.
General
On January 9, 1996, the Board of Directors of the Savings Bank unanimously
adopted the Plan of Conversion, pursuant to which the Savings Bank will be
converted from a federally chartered mutual savings bank to a federally
chartered stock savings bank to be held as a wholly-owned subsidiary of the
Holding Company, a newly formed Delaware corporation. The following discussion
of the Plan of Conversion is qualified in its entirety by reference to the Plan
of Conversion, which is attached as Exhibit A to the Savings Bank's Proxy
Statement and is available from the Savings Bank upon request. The OTS has
approved the Plan of Conversion subject to the Plan's approval by the members of
the Savings Bank entitled to vote on the matter at a Special Meeting called for
that purpose to be held on ________, 1996, and subject to the satisfaction of
certain other conditions imposed by the OTS in its approval.
The Conversion will be accomplished through adoption of a Federal Stock
Charter and Bylaws to authorize the issuance of capital stock by the Savings
Bank. Under the Plan, 1,105,000 to 1,495,000 shares of Common Stock are being
offered for sale by the Holding Company at the Purchase Price of $10.00 per
share. As part of the Conversion, the Savings Bank will issue all of its newly
issued common stock (1,000 shares) to the Holding Company in exchange for 50% of
the net proceeds from the sale of Common Stock by the Holding Company.
The Plan of Conversion provides generally that: (i) the Savings Bank will
convert from a federally chartered mutual savings bank to a federally chartered
stock savings bank; (ii) the Common Stock will be offered by the Holding Company
in the Subscription Offering to persons having Subscription Rights, subject to
certain limitations; (iii) if necessary, shares of Common Stock not subscribed
for in the Subscription Offering will be offered in a 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, and then
to certain members of the general public in a Syndicated Community Offering
through a syndicate of registered broker-dealers pursuant to selected dealers
agreements; and (iv) the Holding Company will purchase all of the capital stock
of the Savings Bank to be issued in connection with the Conversion. The
Conversion will be effected only upon completion of the sale of at least
$11,050,000 of Common Stock to be issued pursuant to the Plan of Conversion.
As part of the Conversion, the Holding Company is making a Subscription
Offering of its Common Stock to holders of Subscription Rights in the following
order of priority: (i) Eligible Account Holders (depositors with $50.00 or more
on deposit as of December 31, 1994); (ii) the Savings Bank's ESOP; (iii)
Supplemental Eligible Account Holders (depositors with $50.00 or more on deposit
as of June 30, 1996); and (iv) Other Members (depositors of the Savings Bank as
of September 3, 1996 and borrowers of the Savings Bank with loans outstanding as
of April 15, 1995 which continue to be outstanding as of September 3, 1996).
Shares of Common Stock not subscribed for in the Subscription Offering may
be offered for sale in the Direct Community Offering to members of the general
public, with priority being given to natural persons and trusts of natural
persons residing in the Local Community. The Direct Community Offering, if one
is held, is expected to begin immediately after the Expiration Date, but may
begin at anytime during the Subscription Offering. Shares of Common Stock not
sold in the Subscription and Direct Community Offerings may be offered in the
Syndicated Community Offering. Regulations require that the Direct Community
and Syndicated Community Offerings be completed within 45 days after completion
of the Subscription Offering unless extended by the Savings Bank or the Holding
Company with the approval of the regulatory authorities. If the Syndicated
Community Offering is determined not to be feasible, the Board of Directors of
the Savings Bank will consult with the regulatory authorities
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to determine an appropriate alternative method for selling the unsubscribed
shares of Common Stock. The Plan of Conversion provides that the Conversion
must be completed within 24 months after the date of the approval of the Plan of
Conversion by the members of the Savings Bank.
No sales of Common Stock may be completed, either in the Subscription,
Direct Community or Syndicated Community Offerings, unless the Plan of
Conversion is approved by the members of the Savings Bank.
The completion of the Offerings, however, is subject to market conditions
and other factors beyond the Savings Bank's control. 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 Direct Community or Syndicated
Community Offerings or other sale of the Common Stock. If delays are
experienced, significant changes may occur in the estimated pro forma market
value of the Holding Company and the Savings Bank as converted, together with
corresponding changes in the net proceeds realized by the Holding Company from
the sale of the Common Stock. In the event the Conversion is terminated, the
Savings Bank would be required to charge all Conversion expenses against current
income.
Orders for shares of Common Stock will not be filled until at least
1,105,000 shares of Common Stock have been subscribed for or sold and the OTS
approves the final valuation and the Conversion closes. If the Conversion is
not completed within 45 days after the last day of the fully extended
Subscription Offering and the OTS consents to an extension of time to complete
the Conversion, subscribers will be given the right to increase, decrease or
rescind their subscriptions. Unless an affirmative indication is received from
subscribers that they wish to continue to subscribe for shares, the funds will
be returned promptly, together with accrued interest at the Savings Bank's
passbook rate from the date payment is received until the funds are returned to
the subscriber. If such period is not extended, or, in any event, if the
Conversion is not completed, all withdrawal authorizations will be terminated
and all funds held will be promptly returned together with accrued interest at
the Savings Bank's passbook rate from the date payment is received until the
Conversion is terminated.
Purposes of Conversion
The Savings Bank's Board of Directors has formed the Holding Company to
serve upon consummation of the Conversion as a holding company with the Savings
Bank as its subsidiary. The Savings Bank, as a mutual savings association, does
not have stockholders and has no authority to issue capital stock. By
converting to the stock form of organization, the Holding Company and the
Savings Bank will be structured in the form used by holding companies of
commercial banks and by a large number of savings institutions. Management of
the Savings Bank believes that the Conversion offers a number of advantages
which will be important to the future growth and performance of the Savings Bank
in that it is intended: (i) to improve the overall competitive position of the
Savings Bank in its market area and to support possible future expansion and
diversification of operations (currently there are no specific plans,
arrangements or understandings, written or oral, regarding any such activities);
(ii) to afford members of the Savings Bank and others the opportunity to become
stockholders of the Holding Company and thereby participate more directly in,
and contribute to, any future growth of the Holding Company and the Savings
Bank; and (iii) to provide future access to capital markets.
Effects of Conversion to Stock Form on Depositors and Borrowers of the Savings
Bank
Voting Rights. Savings members and borrowers will have no voting rights in
the converted Savings Bank or the Holding Company and therefore will not be able
to elect directors of the Savings Bank or the Holding Company or to control
their affairs. Currently, these rights are accorded to savings members of the
Savings Bank. Subsequent to the Conversion, voting rights will be vested
exclusively in the Holding Company with respect to the Savings Bank and the
holders of the Common Stock as to matters pertaining to the Holding Company.
Each holder of Common Stock shall be entitled to vote on any matter to be
considered by the stockholders of the Holding Company. A stockholder will be
entitled to one vote for each share of Common Stock owned.
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Savings Accounts and Loans. The Savings Bank's savings accounts, account
balances and existing FDIC insurance coverage of savings accounts will not be
affected by the Conversion. Furthermore, the Conversion will not affect the
loan accounts, loan balances or obligations of borrowers under their individual
contractual arrangements with the Savings Bank.
Tax Effects. The Savings Bank has received an opinion from Breyer &
Aguggia, Washington, D.C., that the Conversion will constitute a nontaxable
reorganization under Section 368(a)(1)(F) of the Code. Among other things, the
opinion states that: (i) no gain or loss will be recognized to the Savings Bank
in its mutual or stock form by reason of its Conversion; (ii) no gain or loss
will be recognized to its account holders upon the issuance to them of accounts
in the Savings Bank immediately after the Conversion, in the same dollar amounts
and on the same terms and conditions as their accounts at the Savings Bank in
its mutual form plus interest in the liquidation account; (iii) the tax basis of
account holders' accounts in the Savings Bank immediately after the Conversion
will be the same as the tax basis of their accounts immediately prior to
Conversion; (iv) the tax basis of each account holder's interest in the
liquidation account will be zero; (v) the tax basis of the Common Stock
purchased in the Conversion will be the amount paid and the holding period for
such stock will commence at the date of purchase; and (vi) no gain or loss will
be recognized to account holders upon the receipt or exercise of Subscription
Rights in the Conversion, except to the extent Subscription Rights are deemed to
have value as discussed below. Unlike a private letter ruling issued by the
IRS, an opinion of counsel is not binding on the IRS and the IRS could disagree
with the conclusions reached therein. In the event of such disagreement, no
assurance can be given that the conclusions reached in an opinion of counsel
would be sustained by a court if contested by the IRS.
Based upon past rulings issued by the IRS, the opinion provides that the
receipt of Subscription Rights by Eligible Account Holders, Supplemental
Eligible Account Holders and Other Members under the Plan will be taxable to the
extent, if any, that the Subscription Rights are deemed to have a fair market
value. RP Financial, a financial consulting firm retained by the Savings Bank,
whose findings are not binding on the IRS, has indicated that the Subscription
Rights do not have any value, based on the fact that such rights are acquired by
the recipients without cost, are nontransferable and of short duration and
afford the recipients the right only to purchase shares of the Common Stock at a
price equal to its estimated fair market value, which will be the same price
paid by purchasers in the Direct Community Offering for unsubscribed shares of
Common Stock. If the Subscription Rights are deemed to have a fair market
value, the receipt of such rights may only be taxable to those Eligible Account
Holders, Supplemental Eligible Account Holders and Other Members who exercise
their Subscription Rights. The Savings Bank could also recognize a gain on the
distribution of such Subscription Rights. Eligible Account Holders,
Supplemental Eligible Account Holders and Other Members are encouraged to
consult with their own tax advisors as to the tax consequences in the event the
Subscription Rights are deemed to have a fair market value.
The Savings Bank has also received an opinion from Moore, Horton & Carlson,
P.C., Mexico, Missouri, that, assuming the Conversion does not result in any
federal income tax liability to the Savings Bank, its account holders, or the
Holding Company, implementation of the Plan of Conversion will not result in any
Missouri income tax liability to such entities or persons.
The opinions of Breyer & Aguggia and Moore, Horton & Carlson, P.C. and the
letter from RP Financial are filed as exhibits to the Registration Statement.
See "ADDITIONAL INFORMATION."
PROSPECTIVE INVESTORS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS
REGARDING THE TAX CONSEQUENCES OF THE CONVERSION PARTICULAR TO THEM.
Liquidation Account. In the unlikely event of a complete liquidation of
the Savings Bank in its present mutual form, each depositor in the Savings Bank
would receive a pro rata share of any assets of the Savings Bank remaining after
payment of claims of all creditors (including the claims of all depositors up to
the withdrawal value of their accounts). Each depositor's pro rata share of
such remaining assets would be in the same proportion as the value of his
deposit account to the total value of all deposit accounts in the Savings Bank
at the time of liquidation.
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After the Conversion, holders of withdrawable deposit(s) in the Savings
Bank, including certificates of deposit ("Savings Account(s)"), shall not be
entitled to share in any residual assets in the event of liquidation of the
Savings Bank. However, pursuant to OTS regulations, the Savings Bank shall, at
the time of the Conversion, establish a liquidation account in an amount equal
to its total equity as of the date of the latest statement of financial
condition contained herein.
The liquidation account shall be maintained by the Savings Bank subsequent
to the Conversion for the benefit of Eligible Account Holders and Supplemental
Eligible Account Holders who retain their Savings Accounts in the Savings Bank.
Each Eligible Account Holder and Supplemental Eligible Account Holder shall,
with respect to each Savings Account held, have a related inchoate interest in a
portion of the liquidation account balance ("subaccount").
The initial subaccount balance for a Savings Account held by an Eligible
Account Holder or a 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 such holder's "qualifying deposit" in the
Savings Account and the denominator is the total amount of the "qualifying
deposits" of all such holders. 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 Savings Account of an Eligible Account Holder
or Supplemental Eligible Account Holder at the close of business on any annual
closing day of the Savings Bank subsequent to December 31, 1994 is less than the
lesser of (i) the deposit balance in such Savings Account at the close of
business on any other annual closing date subsequent to December 31, 1994 or
June 30, 1996 or (ii) the amount of the "qualifying deposit" in such Savings
Account on December 31, 1994 or June 30, 1996, then the subaccount balance for
such Savings Account shall be adjusted by reducing such subaccount balance in an
amount proportionate to the reduction in such deposit balance. In the event of
a downward adjustment, such subaccount balance shall not be subsequently
increased, notwithstanding any increase in the deposit balance of the related
Savings Account. If any such Savings Account is closed, the related subaccount
balance shall be reduced to zero.
In the event of a complete liquidation of the Savings 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
balance(s) for Savings Account(s) then held by such holder before any
liquidation distribution may be made to stockholders. No merger, consolidation,
bulk purchase of assets with assumptions of Savings Accounts and other
liabilities or similar transactions with another federally insured institution
in which the Savings Bank is not the surviving institution shall be considered
to be a complete liquidation. In any such transaction the liquidation account
shall be assumed by the surviving institution.
The Subscription, Direct Community and Syndicated Community Offerings
The Subscription Offering is expected to expire at 4:30 p.m., Central Time,
on the Expiration Date, unless extended or continued as described on the cover
page of this Prospectus.
Subscription Offering. In accordance with the Plan, nontransferable
Subscription Rights to purchase the Common Stock have been issued to all persons
and entities entitled to purchase the Common Stock in the Subscription Offering.
The amount of the Common Stock which these parties may purchase will be subject
to the availability of the Common Stock for purchase under the categories set
forth in the Plan. Subscription priorities have been established for the
allocation of stock to the extent that the Common Stock is available. These
priorities are as follows:
Category 1: Eligible Account Holders. Each depositor with $50.00 or more
on deposit at the Savings Bank as of December 31, 1994 will receive
nontransferable Subscription Rights to subscribe for up to the greater of
$150,000 of Common Stock, one-tenth of one percent of the total offering of
Common Stock or 15 times the product (rounded down to the next whole number)
obtained by multiplying the total number of shares of Common Stock to
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be issued by a fraction of which the numerator is the amount of qualifying
deposit of the Eligible Account Holder and the denominator is the total amount
of qualifying deposits of all Eligible Account Holders. If the exercise of
Subscription Rights in this category results in an oversubscription, shares of
Common Stock will be allocated among subscribing Eligible Account Holders so as
to permit each Eligible Account Holder, to the extent possible, to purchase a
number of shares sufficient to make such person's total allocation equal 100
shares or the number of shares actually subscribed for, whichever is less.
Thereafter, unallocated shares will be allocated among subscribing Eligible
Account Holders proportionately, based on the amount of their respective
qualifying deposits as compared to total qualifying deposits of all Eligible
Account Holders. Subscription Rights received by officers and directors in this
category based on their increased deposits in the Savings Bank in the one year
period preceding December 31, 1994 are subordinated to the Subscription Rights
of other Eligible Account Holders.
Category 2: ESOP. The Plan of Conversion provides that the ESOP shall
receive nontransferable Subscription Rights to purchase up to 8% of the shares
of Common Stock issued in the Conversion. The ESOP intends to purchase 8% of
the shares of Common Stock issued in the Conversion. In the event the number of
shares offered in the Conversion is increased above the maximum of the Estimated
Valuation Range, the ESOP shall have a priority right to purchase any such
shares exceeding the maximum of the Estimated Valuation Range up to an aggregate
of 8% of the Common Stock.
Category 3: Supplemental Eligible Account Holders. Each depositor with
$50.00 or more on deposit as of June 30, 1996 will receive nontransferable
Subscription Rights to subscribe for up to the greater of $150,000 of Common
Stock, one-tenth of one percent of the total offering of Common Stock 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 qualifying deposits of the
Supplemental Eligible Account Holder and the denominator is the total amount of
qualifying deposits of all Supplemental Eligible Account Holders. If the
exercise of Subscription Rights in this category results in an oversubscription,
shares of Common Stock will be allocated among subscribing Supplemental Eligible
Account Holders so as to permit each Supplemental Eligible Account Holder, to
the extent possible, to purchase a number of shares sufficient to make such
person's total allocation equal 100 shares or the number of shares actually
subscribed for, whichever is less. Thereafter, unallocated shares will be
allocated among subscribing Supplemental Eligible Account Holders
proportionately, based on the amount of their respective qualifying deposits as
compared to total qualifying deposits of all Supplemental Eligible Account
Holders.
Category 4: Other Members. Each depositor of the Savings Bank as of the
Voting Record Date and each borrower with a loan outstanding on April 15, 1995
which continues to be outstanding as of the Voting Record Date will receive
nontransferable Subscription Rights to purchase up to $150,000 of Common Stock
in the Conversion to the extent shares are available following subscriptions by
Eligible Account Holders, the Savings Bank's ESOP and Supplemental Eligible
Account Holders. In the event of an oversubscription in this category, the
available shares will be allocated proportionately based on the amount of the
respective subscriptions.
Subscription Rights are nontransferable. Persons selling or otherwise
transferring their rights to subscribe for Common Stock in the Subscription
Offering or subscribing for 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 or another agency of the U.S. Government. Each
person exercising Subscription Rights will be required to certify that he or she
is purchasing such shares solely for his or her own account and that he or she
has no agreement or understanding with any other person for the sale or transfer
of such shares. ONCE TENDERED, SUBSCRIPTION ORDERS CANNOT BE REVOKED OR
MODIFIED WITHOUT THE CONSENT OF THE SAVINGS BANK AND THE HOLDING COMPANY.
The Subscription Offering and all Subscription Rights under the Plan will
expire at 4:30 p.m., Central Time, on the Expiration Date, whether or not the
Savings Bank has been able to locate each person entitled to such Subscription
Rights. The Subscription Offering may be extended by the Holding Company and
the Savings Bank up to _______, 1996 without the OTS's approval. OTS
regulations require that the Holding Company complete the
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sale of Common Stock within 45 days after the close of the Subscription
Offering. If the sale of Common Stock is not completed within such period, all
funds received will be promptly returned with interest at the Savings Bank's
passbook rate and all withdrawal authorizations will be canceled. If regulatory
approval of an extension of the time period has been granted, all subscribers
will be notified of such extension and of the duration of any extension that has
been granted, and will be given the right to increase, decrease or rescind their
orders. If an affirmative response to any resolicitation is not received by the
Holding Company from a subscriber, the subscriber's order will be rescinded and
all funds received will be promptly returned with interest (or withdrawal
authorizations will be canceled). No single extension can exceed 90 days.
Direct Community Offering. Any shares of Common Stock which remain
unsubscribed for in the Subscription Offering may be offered by the Holding
Company to certain members of the general public in a Direct Community Offering,
with preference given to natural persons and trusts of natural persons residing
in the Local Community. Purchasers in the Direct Community Offering are
eligible to purchase up to $150,000 of Common Stock in the Conversion (or 15,000
shares based on the Purchase Price). No person or entity, together with
associates of and persons acting in concert with such person or entity, may
purchase in the aggregate shares with an aggregate purchase price of more than
$200,000 (or 20,000 shares based on the Purchase Price). In the event an
insufficient number of shares are available to fill orders in the Direct
Community Offering, the available shares will be allocated on a pro rata basis
determined by the amount of the respective orders. The Direct Community
Offering, if held, is expected to commence immediately subsequent to the
Expiration Date, but may begin at anytime during the Subscription Offering. The
Direct Community Offering may terminate on or at any time subsequent to the
Expiration Date, but no later than 45 days after the close of the Subscription
Offering, unless extended by the Holding Company and the Savings Bank with
approval of the OTS. Any extensions beyond 45 days after the close of the
Subscription Offering would require a resolicitation of orders, wherein
subscribers would be given the opportunity to continue their orders, in which
case they will need to affirmatively reconfirm their subscriptions prior to the
expiration of the resolicitation offering or their subscription funds will be
promptly refunded with interest at the Savings Bank's passbook rate, or be
permitted to modify or cancel their orders. The right of any person to purchase
shares in the Direct Community Offering is subject to the absolute right of the
Holding Company and the Savings Bank to accept or reject such purchases in whole
or in part. If an order is rejected in part, the purchaser does not have the
right to cancel the remainder of the order. The Holding Company presently
intends to terminate the Direct Community Offering as soon as it has received
orders for all shares available for purchase in the Conversion.
If all of the Common Stock offered in the Subscription Offering is
subscribed for, no Common Stock will be available for purchase in the Direct
Community Offering.
Syndicated Community Offering. The Plan provides that, if necessary, all
shares of Common Stock not purchased in the Subscription and Direct Community
Offering, if any, may be offered for sale to certain members of the general
public in a Syndicated Community Offering through a syndicate of registered
broker-dealers to be managed by Trident Securities acting as agent of the
Holding Company. The Holding Company and the Savings 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 the 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.
Stock sold in the Syndicated Community Offering will be sold at the $10.00
Purchase Price, the same price as all other shares in the Offering. See "--
Stock Pricing and Number of Shares to be Issued." No person will be permitted
to subscribe in the Syndicated Community Offering for shares of Common Stock
with an aggregate purchase price of more than $150,000. See "-- Plan of
Distribution for the Subscription, Community and Syndicated Community Offerings"
for a description of the commission to be paid to the selected dealers and to
Trident Securities.
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Trident Securities may enter into agreements with selected dealers to
assist in the sale of shares in the Syndicated Community Offering. During the
Syndicated Community Offering, 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 Conversion Stock.
When and if Trident Securities and the Holding Company believe that enough
indications of interest and orders have been received in the Subscription
Offering, the Direct Community Offering and the Syndicated Community Offering 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
received indications of interest from their customers. Selected dealers will
send confirmations to such customers on the next business day after the Order
Date. Selected dealers may debit the accounts of their customers on a date
which will be three business days from the Order Date ("Settlement 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 that the Holding Company established for each selected dealer. Each
customer's funds so forwarded to the Holding Company, along with all other
accounts held in the same title, will be insured by the FDIC up to the
applicable $100,000 legal limit. After payment has been received by the Holding
Company from selected dealers, funds will earn interest at the Savings Bank's
passbook rate until the completion of the Offerings. At the completion of the
Conversion, the funds received in the Offerings will be used to purchase the
shares of Common Stock ordered. The shares issued in the Conversion cannot and
will not be insured by the FDIC or any other government agency. In the event
the Conversion is not consummated as described above, funds with interest will
be returned promptly to the selected dealers, who, in turn, will promptly credit
their customers' brokerage accounts.
The Syndicated Community Offering may terminate no more than 45 days
following the Expiration Date, unless extended by the Holding Company with the
approval of the OTS.
In the event the Savings Bank is unable to find purchasers from the general
public for all unsubscribed shares, other purchase arrangements will be made by
the Board of Directors of the Savings Bank, if feasible. Such other
arrangements will be subject to the approval of the OTS. The OTS may grant one
or more extensions of the offering period, provided that (i) no single extension
exceeds 90 days, (ii) subscribers are given the right to increase, decrease or
rescind their subscriptions during the extension period, and (iii) the
extensions do not go more than two years beyond the date on which the members
approved the Plan. If the Conversion is not completed within 45 days after the
close of the Subscription Offering, either all funds received will be returned
with interest (and withdrawal authorizations canceled) or, if the OTS has
granted an extension of time, all subscribers will be given the right to
increase, decrease or rescind their subscriptions at any time prior to 20 days
before the end of the extension period. If an extension of time is obtained,
all subscribers will be notified of such extension and of their rights to modify
their orders. If an affirmative response to any resolicitation is not received
by the Holding Company from a subscriber, the subscriber's order will be
rescinded and all funds received will be promptly returned with interest (or
withdrawal authorizations will be canceled).
Persons in Non-Qualified States. The Holding Company and the Savings 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 stock pursuant to
the Plan reside. However, the Holding Company and the Savings Bank are not
required to offer stock in the Subscription Offering to any person who resides
in a foreign country or resides in a state of the United States with respect to
which: (i) a small number of persons otherwise eligible to subscribe for shares
of Common Stock reside in such state; (ii) the granting of Subscription Rights
or offer or sale of shares of Common Stock to such persons would require the
Holding Company to register, under the securities laws of such state, as a
broker or dealer or to register or otherwise qualify the Common Stock for sale
in such state; or (iii) such registration or qualification would be impractical
for reasons of cost or otherwise. Where the number of persons eligible to
subscribe for shares in one state is small, the Holding Company and the Savings
Bank will base their decision as to whether or not to offer the Common stock in
such state on a number of factors, including the size of accounts held by
account holders in the state and the cost of registering or qualifying the
shares.
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Plan of Distribution for the Subscription, Direct Community and Syndicated
Community Offerings
The Savings Bank and the Holding Company have retained Trident Securities
to consult with and advise the Savings Bank and to assist the Savings Bank and
the Holding Company, on a best efforts basis, in the distribution of shares in
the Offerings. Trident Securities is a broker-dealer registered with the SEC
and a member of the NASD. Trident Securities will assist the Savings Bank in
the Conversion as follows: (i) it will act as marketing advisor with respect to
the Subscription Offering and will represent the Savings Bank as placement agent
on a best efforts basis in the sale of the Common Stock in the Direct Community
Offering if one is held; (ii) it will conduct training sessions to ensure that
directors, officers and employees of the Savings Bank are knowledgeable
regarding the Conversion process; and (iii) it will provide assistance in the
establishment and supervision of the Stock Information Center and will train the
Savings Bank's staff to record properly and tabulate orders for the purchase of
Common Stock and to respond appropriately to customer inquiries.
Based upon negotiations between Trident Securities on the one hand and the
Holding Company and the Savings Bank on the other hand concerning fee structure,
Trident Securities will receive a management fee in the amount of $157,500.
Trident and selected dealers participating in the Syndicated Community Offering
shall receive a commission in an amount to be agreed upon jointly by Trident
Securities and the Savings Bank for shares sold by them in the Syndicated
Community Offering. Fees and commissions paid to Trident Securities and to any
selected dealers may be deemed to be underwriting fees, and Trident Securities
and such selected dealers may be deemed to be underwriters. Trident Securities
will also be reimbursed for its reasonable out-of-pocket expenses, including
legal fees, not to exceed $38,500 in the aggregate. Trident Securities has
received an advance of $10,000 towards its reimbursable expenses. For
additional information, see "-- Stock Pricing and Number of Shares to be Issued"
and "USE OF PROCEEDS."
The Holding Company and the Savings Bank have also agreed to indemnify
Trident Securities against liabilities and expenses (including legal fees)
incurred in connection with certain claims or litigation arising out of or based
upon untrue statements or omissions contained in the offering material for the
Common Stock or with regard to allocations of shares (in the event of
oversubscription) or determinations of eligibility to purchase shares.
Description of Sales Activities
The Common Stock will be offered in the Subscription and Direct Community
Offerings principally by the distribution of this Prospectus and through
activities conducted at the Savings Bank's Stock Information Center at its main
office facility. The Stock Information Center is expected to operate during
normal business hours throughout the Subscription and Direct Community
Offerings. It is expected that at any particular time, one or more Trident
Securities employees will be working at the Stock Information Center. Such
employees of Trident Securities will be responsible for mailing materials
relating to the Subscription and Direct Community Offerings, responding to
questions regarding the Conversion and the Subscription and Direct Community
Offerings and processing stock orders.
Sales of Common Stock will be made by registered representatives affiliated
with Trident Securities or by the selected dealers managed by Trident
Securities. The management and employees of the Savings Bank may participate in
the Offerings in clerical capacities, providing administrative support in
effecting sales transactions or, when permitted by state securities laws,
answering questions of a mechanical nature relating to the proper execution of
the Order Form. Management of the Savings Bank may answer questions regarding
the business of the Savings Bank when permitted by state securities laws. Other
questions of prospective purchasers, including questions as to the advisability
or nature of the investment, will be directed to registered representatives.
The management and employees of the Holding Company and the Savings Bank have
been instructed not to solicit offers to purchase Common Stock or provide advice
regarding the purchase of Common Stock.
No officer, director or employee of the Savings Bank or the Holding Company
will be compensated, directly or indirectly, for any activities in connection
with the offer or sale of securities issued in the Conversion.
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None of the Savings Bank's personnel participating in the Subscription and
Direct Community Offering is registered or licensed as a broker or dealer or an
agent of a broker or dealer. The Savings Bank's personnel will assist in the
above-described sales activities pursuant to an exemption from registration as a
broker or dealer provided by Rule 3a4-1 ("Rule 3a4-1") promulgated under the
Exchange Act. Rule 3a4-1 generally provides that an "associated person of an
issuer" of securities shall not be deemed a broker solely by reason of
participation in the sale of securities of such issuer if the associated person
meets certain conditions. Such conditions include, but are not limited to, that
the associated person participating in the sale of an issuer's securities not be
compensated in connection therewith at the time of participation, that such
person not be associated with a broker or dealer and that such person observe
certain limitations on his participation in the sale of securities. For
purposes of this exemption, "associated person of an issuer" is defined to
include any person who is a director, officer or employee of the issuer or a
company that controls, is controlled by or is under common control with the
issuer.
Procedure for Purchasing Shares in the Subscription and Direct Community
Offerings
To ensure that each purchaser receives a prospectus at least 48 hours prior
to the 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 Savings Bank will accept
for processing only orders submitted on Order Forms.
To purchase shares in the Subscription Offering, an executed Order Form
with the required full payment for each share subscribed for, or with
appropriate authorization for withdrawal of full payment from the subscriber's
deposit account with the Savings Bank (which may be given by completing the
appropriate blanks in the Order Form), must be received by the Savings Bank by
4:30 p.m., Central Time, on the Expiration Date. Order Forms which are not
received by such time or are executed defectively or are received without full
payment (or without appropriate withdrawal instructions) are not required to be
accepted. In addition, the Savings Bank is not obligated to accept orders
submitted on photocopied or telecopied Order Forms. The Holding Company and the
Savings Bank have the right to waive or permit the correction of incomplete or
improperly executed Order Forms, but do not represent that they will do so.
Pursuant to the Plan of Conversion, the interpretation by the Holding Company
and the Savings Bank of the terms and conditions of the Plan of Conversion and
of the Order Form will be final. In order to purchase shares in the Direct
Community Offering, the Stock Order Form, accompanied by the required payment
for each share subscribed for, must be received by the Savings Bank prior to the
time the Direct Community Offering terminates, which may be at any time
subsequent to the Expiration Date. Once received, an executed Order Form may
not be modified, amended or rescinded without the consent of the Savings Bank
unless the Conversion has not been completed within 45 days after the end of the
Subscription Offering, unless such period has been extended.
In order to ensure that Eligible Account Holders, Supplemental Eligible
Account Holders and Other Members are properly identified as to their stock
purchase priorities, depositors as of the Eligibility Record Date (December 31,
1994) and/or the Supplemental Eligibility Record Date (June 30, 1996) and/or the
Voting Record Date (September 3, 1996) must list all accounts on the Order
Form giving all names in each account, the account number and the approximate
account balance as of such date.
Full payment for subscriptions may be made (i) in cash if delivered in
person at the Savings Bank, (ii) by check, bank draft, or money order, or (iii)
by authorization of withdrawal from deposit accounts maintained with the Savings
Bank. Appropriate means by which such withdrawals may be authorized are
provided on the Order Form. No wire transfers will be accepted. Interest will
be paid on payments made by cash, check, bank draft or money order at the
Savings Bank's passbook rate from the date payment is received until the
completion or termination of the Conversion. If payment is made by
authorization of withdrawal from deposit accounts, the funds authorized to be
withdrawn from a deposit account will continue to accrue interest at the
contractual rates until completion or termination of the Conversion (unless the
certificate matures after the date of receipt of the Order Form but prior to
closing, in which case funds will earn interest at the passbook rate from the
date of maturity until consummation
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of the Conversion), but a hold will be placed on such funds, thereby making them
unavailable to the depositor until completion or termination of the Conversion.
At the completion of the Conversion, the funds received in the Offerings will be
used to purchase the shares of Common Stock ordered. The shares issued in the
Conversion cannot and will not be insured by the FDIC or any other government
agency. In the event that the Conversion is not consummated for any reason, all
funds submitted will be promptly refunded with interest as described above.
If a subscriber authorizes the Savings Bank to withdraw the amount of the
aggregate Purchase Price from his deposit account, the Savings Bank will do so
as of the effective date of Conversion, though the account must contain the full
amount necessary for payment at the time the subscription order is received.
The Savings Bank will waive any applicable penalties for early withdrawal from
certificate accounts. If the remaining balance in a certificate account is
reduced below the applicable minimum balance requirement at the time that the
funds actually are transferred under the authorization the certificate will be
canceled at the time of the withdrawal, without penalty, and the remaining
balance will earn interest at the Savings Bank's passbook rate.
If the ESOP subscribes for shares during the Subscription Offering, the
ESOP will not be required to pay for the shares subscribed for at the time it
subscribes, but rather may pay for such shares of Common Stock subscribed for at
the Purchase Price upon consummation of the Conversion, provided that there is
in force from the time of its subscription until such time, a loan commitment
from an unrelated financial institution or the Holding Company to lend to the
ESOP, at such time, the aggregate Purchase Price of the shares for which it
subscribed.
Individual Retirement Accounts ("IRAs") maintained in the Savings Bank do
not permit investment in the Common Stock. A depositor interested in using his
or her IRA funds to purchase Common Stock must do so through a self-directed
IRA. Since the Savings Bank does not offer such accounts, it will allow such a
depositor to make a trustee-to-trustee transfer of the IRA funds to a trustee
offering a self-directed IRA program with the agreement that such funds will be
used to purchase the Holding Company's Common Stock in the Offerings. There
will be no early withdrawal or IRS interest penalties for such transfers. The
new trustee would hold the Common Stock in a self-directed account in the same
manner as the Savings Bank now holds the depositor's IRA funds. An annual
administrative fee may be payable to the new trustee. Depositors interested in
using funds in a Savings Bank IRA to purchase Common Stock should contact the
Stock Information Center at the Savings Bank so that the necessary forms may be
forwarded for execution and returned prior to the Expiration Date. In addition,
the provisions of ERISA and IRS regulations require that officers, directors and
10% shareholders who use self-directed IRA funds to purchase shares of Common
Stock in the Subscription Offering, make such purchases for the exclusive
benefit of IRAs.
Certificates representing shares of Common Stock purchased, and any refund
due, will be mailed to purchasers at such address as may be specified in
properly completed Order Forms or to the last address of such persons appearing
on the records of the Savings Bank as soon as practicable following consummation
of the sale of all shares of Common Stock. Any certificates returned as
undeliverable will be disposed of in accordance with applicable law. Until
certificates for the Common Stock are available and delivered to purchasers,
purchasers may not be able to sell the shares of Common Stock which they
purchased, even though trading of the Common Stock may have commenced.
Stock Pricing and Number of Shares to be Issued
Federal regulations require that the aggregate purchase price of the
securities sold in connection with the Conversion be based upon an estimated pro
forma value of the Holding Company and the Savings Bank as converted (i.e.,
----
taking into account the expected receipt of proceeds from the sale of securities
in the Conversion), as determined by an independent appraisal. The Savings Bank
and the Holding Company have retained RP Financial to prepare an appraisal of
the pro forma market value of the Holding Company and the Savings Bank as
converted, as well as a business plan. RP Financial will receive a fee expected
to total approximately $27,500 for its appraisal services and preparation of a
business plan, plus reasonable out-of-pocket expenses incurred in connection
with the
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appraisal. The Savings Bank 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 Holding Company and the Savings Bank as converted taking into
account the formation of the Holding Company as the holding company for the
Savings Bank. For its analysis, RP Financial undertook substantial
investigations to learn about the Savings Bank's business and operations.
Management supplied financial information, including annual financial
statements, information on the composition of assets and liabilities, and other
financial schedules. In addition to this information, RP Financial reviewed the
Savings Bank's Form AC Application for Approval of Conversion and the Holding
Company's Form S-1 Registration Statement. Furthermore, RP Financial visited
the Savings Bank's facilities and had discussions with the Savings Bank's
management and its special conversion legal counsel, Breyer & Aguggia. No
detailed individual analysis of the separate components of the Holding Company's
or the Savings Bank's assets and liabilities was performed in connection with
the evaluation.
In estimating the pro forma market value of the Holding Company and the
Savings Bank as converted, as required by applicable regulatory guidelines, RP
Financial's analysis utilized three selected valuation procedures, the
Price/Book ("P/B") method, the Price/Earnings ("P/E") method, and Price/Assets
("P/A") method, all of which are described in its report. RP Financial placed
the greatest emphasis on the P/E and P/B methods in estimating pro forma market
value. In applying these procedures, RP Financial reviewed, among other
factors, the economic make-up of the Savings Bank's primary market area, the
Savings Bank's financial performance and condition in relation to publicly-
traded institutions that RP Financial deemed comparable to the Savings Bank, the
specific terms of the offering of the Holding Company's Common Stock, the pro
forma impact of the additional capital raised in the Conversion, conditions of
securities markets in general, and the market for thrift institution common
stock in particular. RP Financial's analysis provides an approximation of the
pro forma market value of the Holding Company and the Savings Bank as converted
based on the valuation methods applied and the assumptions outlined in its
report. Included in its report were certain assumptions as to the pro forma
earnings of the Holding Company after the Conversion that were utilized in
determining the appraised value. These assumptions included expenses of
$542,000, an assumed after-tax rate of return on the net Conversion proceeds of
4.02%, purchases by the ESOP of 8% of the stock sold in the Conversion and
purchases in the open market by the MRP of a number of shares equal to 4% of the
stock sold in the Conversion at the Purchase Price. See "PRO FORMA DATA" for
additional information concerning these assumptions. The use of different
assumptions may yield somewhat different results.
On the basis of the foregoing, RP Financial has advised the Holding Company
and the Savings Bank that, in its opinion, as of July 12, 1996, the aggregate
estimated pro forma market value of the Holding Company and the Savings Bank as
converted and, therefore, the Common Stock was within the valuation range of
$11,050,000 to $14,950,000 with a midpoint of $13,000,000. After reviewing the
methodology and the assumptions used by RP Financial in the preparation of the
appraisal, the Board of Directors established the Estimated Valuation Range
which is equal to the valuation range of $11,050,000 to $14,950,000 with a
midpoint of $13,000,000. In determining the reasonableness and adequacy of the
appraisal, consistent with OTS regulations and policies, the Board of Directors
reviewed the methodology and reasonableness of the assumptions utilized by RP
Financial in the preparation of the appraisal. Assuming that the shares are sold
at $10.00 per share in the Conversion, the estimated number of shares would be
between 1,105,000 and 1,495,000 with a midpoint of 1,300,000. The Purchase Price
of $10.00 was determined by discussion among the Boards of Directors of the
Savings Bank and the Holding Company and Trident Securities, taking into
account, among other factors (i) the requirement under OTS regulations that the
Common Stock be offered in a manner that will achieve the widest distribution of
the stock and (ii) desired liquidity in the Common Stock subsequent to the
Conversion. Since the outcome of the Offerings relate in large measure to market
conditions at the time of sale, it is not possible to determine the exact number
of shares that will be issued by the Holding Company at this time. The Estimated
Valuation Range may be amended, with the approval of the OTS, if necessitated by
developments following the date of such appraisal in, among other things, market
conditions, the financial condition or operating results of the Savings Bank,
regulatory guidelines or national or local economic conditions.
RP Financial's appraisal report is filed as an exhibit to the Registration
Statement. See "ADDITIONAL INFORMATION."
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If, upon completion of the Subscription Offering, at least the minimum
number of shares are subscribed for, RP Financial, after taking into account
factors similar to those involved in its prior appraisal, will determine its
estimate of the pro forma market value of the Holding Company and the Savings
Bank as converted, as of the close of the Subscription Offering.
No sale of the shares will take place unless prior thereto RP Financial
confirms to the OTS that, to the best of RP Financial's knowledge and judgment,
nothing of a material nature has occurred that would cause it to conclude that
the actual total purchase price on an aggregate basis was incompatible with its
estimate of the total pro forma market value of the Holding Company and the
Savings Bank as converted at the time of the sale. If, however, the facts do
not justify such a statement, the Offerings or other sale may be canceled, a new
Estimated Valuation Range and price per share set and new Subscription, Direct
Community and Syndicated Community Offerings held. Under such circumstances,
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.
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. In the
event the total amount of shares issued is less than 1,105,000 or more than
1,719,250 (15% above the maximum of the Estimated Valuation Range), for
aggregate gross proceeds of less than $11,050,000 or more than $17,192,500,
subscription funds will be returned promptly with interest to each subscriber
unless he indicates otherwise. In the event a new valuation range is
established by RP Financial, such new range will be subject to approval by the
OTS.
If purchasers cannot 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 Savings 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 for investment purposes by directors, officers, their
associates and other persons in excess of the limitations provided in the Plan
of Conversion and in excess of the proposed director purchases set forth herein,
although no such purchases are currently intended. If such other purchase
arrangements cannot be made, the Plan will terminate.
In formulating its appraisal, RP Financial relied upon the truthfulness,
accuracy and completeness of all documents the Savings Bank furnished it. RP
Financial also considered financial and other information from regulatory
agencies, other financial institutions, and other public sources, as
appropriate. While RP Financial believes this information to be reliable, RP
Financial does not guarantee the accuracy or completeness of such information
and did not independently verify the financial statements and other data
provided by the Savings Bank and the Holding Company or independently value the
assets or liabilities of the Holding Company and the Savings Bank. The
appraisal by RP Financial is not intended to be, and must not be interpreted 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
appraisal is necessarily based on many factors which change from time to time,
there is no assurance that persons who purchase such shares in the Conversion
will later be able to sell shares thereafter at prices at or above the Purchase
Price.
Limitations on Purchases of Shares
The Plan of Conversion provides for certain limitations to be placed upon
the purchase of Common Stock by eligible subscribers and others in the
Conversion. Each subscriber must subscribe for a minimum of 25 shares. With
the exception of the ESOP, which is expected to purchase 8% of the shares of
Common Stock issued in the Conversion, no person or entity may purchase shares
with an aggregate purchase price of more than $150,000 (or 15,000 shares based
on the Purchase Price); and no person or entity, together with associates of and
persons acting in concert with such person or entity, may purchase in the
aggregate shares with an aggregate purchase price of more than $200,000 (or
20,000 shares based on the Purchase Price). Officers, directors and their
associates may not purchase, in the aggregate, more than 34% of the shares of
Common Stock offered in the Conversion. For purposes
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of the Plan, the directors are not deemed to be acting in concert solely by
reason of their Board membership. Pro rata reductions within each Subscription
Rights category will be made in allocating shares to the extent that the maximum
purchase limitations are exceeded.
The Savings Bank's and the Holding Company's Boards of Directors may, in
their sole discretion, increase the maximum purchase limitation set forth above
up to 9.99% of the shares of Common Stock sold in the Conversion, provided that
orders for shares which exceed 5% of the shares of Common Stock sold in the
Conversion may not exceed, in the aggregate, 10% of the shares sold in the
Conversion. The Savings Bank and the Holding Company do not intend to increase
the maximum purchase limitation unless market conditions are such that an
increase in the maximum purchase limitation is necessary to sell a number of
shares in excess of the minimum of the Estimated Valuation Range. If the Boards
of Directors decide to increase the purchase limitation, all persons who
subscribed for the maximum number of shares will be given the opportunity to
increase their subscriptions accordingly, subject to the rights and preferences
of any person who has priority Subscription Rights.
The term "acting in concert" is defined in the Plan to mean (i) knowing
participation in a joint activity or interdependent conscious parallel action
towards a common goal whether or not pursuant to an express agreement; or (ii) 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 arrangement, whether written or otherwise. In
general, a person who acts in concert with another other party shall also be
deemed to be acting in concert with any person who is also acting in concert
with that other party.
The term "associate" of a person is defined in the Plan to mean (i) any
corporation or organization (other than the Savings Bank or a majority-owned
subsidiary of the Savings Bank) of which such person is an officer or partner or
is, directly or indirectly, the beneficial owner of 10% 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 (excluding tax-qualified employee plans); and
(iii) any relative or spouse of such person, or any relative of such spouse, who
either has the same home as such person or who is a director or officer of the
Savings Bank or any of its parents or subsidiaries. For example, a corporation
of which a person serves as an officer would be an associate of such person,
and, therefore, all shares purchased by such corporation would be included with
the number of shares which such person could purchase individually under the
above limitations.
The term "officer" is defined in the Plan to mean an executive officer of
the Savings Bank, including its Chairman of the Board, President, Executive Vice
Presidents, Senior Vice Presidents, Vice Presidents in charge of principal
business functions, Secretary and Treasurer.
Common Stock purchased pursuant to the Conversion will be freely
transferable, except for shares purchased by directors and officers of the
Savings Bank and the Holding Company and by NASD members. See "--Restrictions
on Transferability by Directors and Officers and NASD Members."
Restrictions on Repurchase of Stock
Pursuant to OTS regulations, OTS-regulated savings associations (and their
holding companies) may not for a period of three years from the date of an
institution's mutual-to-stock conversion repurchase any of its common stock from
any person, except in the event of (i) an offer made to all of its stockholders
to repurchase the common stock on a pro rata basis, approved by the OTS; or (ii)
the repurchase of qualifying shares of a director; or (iii) a purchase in the
open market by a tax-qualified or non-tax-qualified employee stock benefit plan
in an amount reasonable and appropriate to fund the plan. Furthermore,
repurchases any of its common stock are prohibited if the effect thereof would
cause the association's regulatory capital to be reduced below (a) the amount
required for the liquidation account or (b) the regulatory capital requirements
imposed by the OTS. Repurchases are generally prohibited during the first year
following conversion. However, recent OTS policy has relaxed this restriction,
particularly during the second six months after conversion. While an applicant
needs to demonstrate the existence
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of "exceptional circumstances" during the first six months after conversion, the
OTS has indicated that it would analyze repurchases during months six through 12
after conversion on a case-by-case basis. Upon ten days' written notice to the
OTS, and if the OTS does not object, an institution may make open market
repurchases of its outstanding common stock during years two and three following
the conversion, provided that (x) no more than 5% of the outstanding common
stock is to be purchased during any 12-month period, (y) the repurchases do not
cause the association to become undercapitalized as defined under the OTS prompt
corrective action regulations and (z) the repurchase would not adversely affect
the financial condition of the association. No assurances, however, can be
given that the OTS will approve a repurchase program under current policy or
that such policy will not change or become more restrictive.
Restrictions on Transferability by Directors and Officers and NASD Members
Shares of Common Stock purchased in the Offerings by directors and officers
of the Holding Company may not be sold for a period of one year following
consummation of the Conversion, except in the event of the death of the
stockholder or in any exchange of the Common Stock in connection with a merger
or acquisition of the Holding Company. Shares of Common Stock received by
directors or officers through the ESOP or the MRP or upon exercise of options
issued pursuant to the Stock Option Plan or purchased subsequent to the
Conversion are not subject to this restriction. Accordingly, shares of Common
Stock issued by the Holding Company to directors and officers shall bear a
legend giving appropriate notice of the restriction, and, in addition, the
Holding Company will give appropriate instructions to the transfer agent for the
Holding Company's Common Stock with respect to the restriction on transfers.
Any shares issued to directors and officers as a stock dividend, stock split or
otherwise with respect to restricted Common Stock shall be subject to the same
restrictions.
Purchases of outstanding shares of Common Stock of the Holding Company by
directors, executive officers (or any person who was an executive officer or
director of the Savings Bank after adoption of the Plan of Conversion) and their
associates during the three-year period following Conversion may be made only
through a broker or dealer registered with the SEC, except with the prior
written approval of the OTS. This restriction does not apply, however, to
negotiated transactions involving more than 1% of the Holding Company's
outstanding Common Stock or to the purchase of stock pursuant to the Stock
Option Plan.
The Holding Company has filed with the SEC a registration statement under
the Securities Act for the registration of the Common Stock to be issued
pursuant to the Conversion. The registration under the Securities Act of shares
of the Common Stock to be issued in the Conversion does not cover the resale of
such shares. Shares of Common Stock purchased by persons who are not affiliates
of the Holding Company may be resold without registration. Shares purchased by
an affiliate of the Holding Company will be subject to the resale restrictions
of Rule 144 under the Securities Act. If the Holding Company meets the current
public information requirements of Rule 144 under the Securities Act, each
affiliate of the Holding Company who complies with the other conditions of Rule
144 (including those that require the affiliate's sale to be aggregated with
those of certain other persons) would be able to sell in the public market,
without registration, a number of shares not to exceed, in any three-month
period, the greater of (i) 1% of the outstanding shares of the Holding Company
or (ii) the average weekly volume of trading in such shares during the preceding
four calendar weeks. Provision may be made in the future by the Holding Company
to permit affiliates to have their shares registered for sale under the
Securities Act under certain circumstances.
In addition, under guidelines of the NASD, members of the NASD and their
associates are subject to certain restrictions on the transfer of securities
purchased in accordance with Subscription Rights and to certain reporting
requirements upon purchase of such securities.
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RESTRICTIONS ON ACQUISITION OF THE HOLDING COMPANY
The following discussion is a summary of certain provisions of federal law
and regulations and Delaware corporate law, as well as the Certificate of
Incorporation and Bylaws of the Holding Company, relating to stock ownership and
transfers, the Board of Directors and business combinations, all of which may be
deemed to have "anti-takeover" effects. The description of these provisions is
necessarily general and reference should be made to the actual law and
regulations and to the Certificate of Incorporation and Bylaws of the Holding
Company. See "ADDITIONAL INFORMATION" as to how to obtain a copy of these
documents.
Conversion Regulations
OTS regulations prohibit any person from making an offer, announcing an
intent to make an offer or participating in any other arrangement to purchase
stock or acquiring stock or subscription rights in a converting institution (or
its holding company) from another person prior to completion of its conversion.
Further, without the prior written approval of the OTS, no person may make such
an offer or announcement of an offer to purchase shares or actually acquire
shares in the converting institution (or its holding company) for a period of
three years from the date of the completion of the conversion if, upon the
completion of such offer, announcement or acquisition, that person would become
the beneficial owner of more than 10% of the outstanding stock of the
institution (or its holding company). The OTS has defined "person" to include
any individual, group acting in concert, corporation, partnership, association,
joint stock company, trust, unincorporated organization or similar company, a
syndicate or any other group formed for the purpose of acquiring, holding or
disposing of securities of an insured institution. However, offers made
exclusively to an association (or its holding company) or an underwriter or
member of a selling group acting on the converting institution's (or its holding
company's) behalf for resale to the general public are excepted. The regulation
also provides civil penalties for willful violation or assistance in any such
violation of the regulation by any person connected with the management of the
converting institution (or its holding company) or who controls more than 10% of
the outstanding shares or voting rights of a converting or converted institution
(or its holding company).
Change of Control Regulations
Under the Change in Bank Control Act, no person may acquire control of an
insured federal savings association or its parent holding company unless the OTS
has been given 60 days' prior written notice and has not issued a notice
disapproving the proposed acquisition. In addition, OTS regulations provide
that no company may acquire control of a savings association without the prior
approval of the OTS. Any company that acquires such control becomes a "savings
and loan holding company" subject to registration, examination and regulation by
the OTS.
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
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 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 that acquire
beneficial ownership exceeding 10% or more of any class of a savings
association's stock must file with the OTS a certification form 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. There are also rebuttable presumptions in
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the regulations concerning whether a group "acting in concert" exists, including
presumed action in concert among members of an "immediate family."
The OTS may prohibit an acquisition of control if it finds, among other
things, that (i) the acquisition would result in a monopoly or substantially
lessen competition, (ii) the financial condition of the acquiring person might
jeopardize the financial stability of the institution, or (iii) the competence,
experience or integrity of the acquiring person indicates that it would not be
in the interest of the depositors or the public to permit the acquisition of
control by such person.
Anti-takeover Provisions in the Holding Company's Certificate of Incorporation
and Bylaws and Delaware Law
A number of provisions of the Holding Company's Certificate of
Incorporation and Bylaws deal with matters of corporate governance and certain
rights of stockholders. The following discussion is a general summary of
certain provisions of the Holding Company's Certificate of Incorporation and
Bylaws and regulatory provisions relating to stock ownership and transfers, the
Board of Directors and business combinations, which might be deemed to have a
potential "anti-takeover" effect. These provisions may have the effect of
discouraging a future takeover attempt which is not approved by the Board of
Directors but which individual Holding Company stockholders may deem to be in
their best interests or in 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 an opportunity to
do so. Such provisions will also render the removal of the incumbent Board of
Directors or management of the Holding Company more difficult. The following
description of certain of the provisions of the Certificate of Incorporation and
Bylaws of the Holding Company is necessarily general and reference should be
made in each case to such Certificate of Incorporation and Bylaws, which are
incorporated herein by reference. See "ADDITIONAL INFORMATION" as to how to
obtain a copy of these documents.
Limitation on Voting Rights. The Certificate of Incorporation of the
Holding Company provides 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 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, unless permitted by a resolution adopted
by a majority of the board of directors. Beneficial ownership is determined
pursuant to Rule 13d-3 of the General Rules and Regulations of the Exchange Act
and includes shares beneficially owned by such person or any of such person's
affiliates (as defined in the Certificate of Incorporation), shares which such
person or such person's affiliates have the right to acquire upon the exercise
of conversion rights or options and shares as to which such person and such
person's affiliates have or share investment or voting power, but shall not
include shares beneficially owned by the ESOP or directors, officers and
employees of the Savings Bank or Holding Company or shares that are subject to a
revocable proxy and that are not otherwise beneficially, or deemed by the
Holding Company to be beneficially, owned by such person and his affiliates.
Board of Directors. The Board of Directors of the Holding Company is
divided into three classes, each of which shall contain approximately one-third
of the whole number of the members of the Board. The members of each class
shall be elected for a term of three years, with the terms of office of all
members of one class expiring each year so that approximately one-third of the
total number of directors are elected each year. The Holding Company's
Certificate of Incorporation provides that the size of the Board shall be as set
forth in the Bylaws. The Bylaws currently set the number of directors at seven.
The Certificate of Incorporation provides that any vacancy occurring in the
Board, including a vacancy created by an increase in the number of directors,
shall be filled by a vote of two-thirds of the directors then in office and any
director so chosen shall hold office for a term expiring at the annual meeting
of stockholders at which the term of the class to which the director has been
chosen expires. The classified Board is intended to provide for continuity of
the Board of Directors and to make it more difficult and time consuming for a
stockholder group to fully use its voting power to gain control of the Board of
Directors without the consent of the incumbent Board of Directors of the Holding
Company. The Certificate of Incorporation of the Holding Company provides that
a director may be removed from the Board of Directors prior to the expiration
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of his or her term only for cause and only upon the vote of 80% of the
outstanding shares of voting stock. In the absence of this provision, the vote
of the holders of a majority of the shares could remove the entire Board, but
only with cause, and replace it with persons of such holders' choice.
Cumulative Voting, Special Meetings and Action by Written Consent. The
Certificate of Incorporation does not provide for cumulative voting for any
purpose. Moreover, the Certificate of Incorporation provides that special
meetings of stockholders of the Holding Company may be called only by the Board
of Directors of the Holding Company and that stockholders may take action only
at a meeting and not by written consent.
Authorized Shares. The Certificate of Incorporation authorizes the
issuance of 6,000,000 shares of Common Stock and 1,000,000 shares of preferred
stock. The shares of Common Stock and preferred stock were authorized in an
amount greater than that to be issued in the Conversion to provide the Holding
Company's Board of Directors with as much flexibility as possible to effect,
among other transactions, financings, acquisitions, stock dividends, stock
splits, restricted stock grants and the exercise of stock options. However,
these additional authorized shares may also be used by the Board of Directors,
consistent with fiduciary duties, to deter future attempts to gain control of
the Holding Company. The Board of Directors also has sole authority to
determine the terms of any one or more series of preferred stock, including
voting rights, conversion rates, and liquidation preferences. As a result of
the ability to fix voting rights for a series of preferred stock, the Board has
the power, to the extent consistent with its fiduciary duty, to issue a series
of preferred stock to persons friendly to management in order to attempt to
block a tender offer, merger or other transaction by which a third party seeks
control of the Holding Company, and thereby assist members of management to
retain their positions. The Holding Company's Board currently has no plans for
the issuance of additional shares, other than the issuance of shares of Common
Stock upon exercise of stock options and in connection with the MRP.
Stockholder Vote Required to Approve Business Combinations with Principal
Stockholders. The Certificate of Incorporation requires the approval of the
holders of at least 80% of the Holding Company's outstanding shares of voting
stock to approve certain "Business Combinations" (as defined therein) involving
a "Related Person" (as defined therein) except in cases where the proposed
transaction has been approved in advance by a majority of those members of the
Holding Company's Board of Directors who are unaffiliated with the Related
Person and were directors prior to the time when the Related Person became a
Related Person. The term "Related Person" is defined to include any individual,
corporation, partnership or other entity (other than the Holding Company or its
subsidiary) which owns beneficially or controls, directly or indirectly, 10% or
more of the outstanding shares of voting stock of the Holding Company or an
affiliate of such person or entity. This provision of the Certificate of
Incorporation applies to any "Business Combination," which is defined to
include: (i) any merger or consolidation of the Holding Company with or into
any Related Person; (ii) any sale, lease, exchange, mortgage, transfer, or other
disposition of 25% or more of the assets of the Holding Company or combined
assets of the Holding Company and its subsidiaries to a Related Person; (iii)
any merger or consolidation of a Related Person with or into the Holding Company
or a subsidiary of the Holding Company; (iv) any sale, lease, exchange,
transfer, or other disposition of 25% or more of the assets of a Related Person
to the Holding Company or a subsidiary of the Holding Company; (v) the issuance
of any securities of the Holding Company or a subsidiary of the Holding Company
to a Related Person; (vi) the acquisition by the Holding Company or a subsidiary
of the Holding Company of any securities of a Related Person; (vii) any
reclassification of common stock of the Holding Company or any recapitalization
involving the common stock of the Holding Company; or (viii) any agreement or
other arrangement providing for any of the foregoing.
Under Delaware law, absent this provision, business combinations, including
mergers, consolidations and sales of substantially all of the assets of a
corporation must, subject to certain exceptions, be approved by the vote of the
holders of a majority of the outstanding shares of common stock of the Holding
Company and any other affected class of stock. One exception under Delaware law
to the majority approval requirement applies to stockholders owning 15% or more
of the common stock of a corporation for a period of less than three years.
Such 15% stockholder, in order to obtain approval of a business combination,
must obtain the approval of two-thirds of the outstanding stock, excluding the
stock owned by such 15% stockholder, or satisfy other requirements under
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Delaware law relating to board of director approval of his or her acquisition of
the shares of the Holding Company. The increased stockholder vote required to
approve a business combination may have the effect of foreclosing mergers and
other business combinations which a majority of stockholders deem desirable and
place the power to prevent such a merger or combination in the hands of a
minority of stockholders.
Amendment of Certificate of Incorporation and Bylaws. Amendments to the
Holding Company's Certificate of Incorporation must be approved by a majority
vote of its Board of Directors and also by a majority of the outstanding shares
of its voting stock, provided, however, that an affirmative vote of at least 80%
of the outstanding voting stock entitled to vote (after giving effect to the
provision limiting voting rights) is required to amend or repeal certain
provisions of the Certificate of Incorporation, including the provision limiting
voting rights, the provisions relating to approval of certain business
combinations, calling special meetings, the number and classification of
directors, director and officer indemnification by the Holding Company and
amendment of the Holding Company's Bylaws and Certificate of Incorporation. The
Holding Company's Bylaws may be amended by its Board of Directors, or by a vote
of 80% of the total votes eligible to be voted at a duly constituted meeting of
stockholders.
Stockholder Nominations and Proposals. The Certificate of Incorporation of
the Holding Company requires a stockholder who intends to nominate a candidate
for election to the Board of Directors, or to raise new business at a
stockholder meeting to give not less than 30 nor more than 60 days' advance
notice to the Secretary of the Holding Company. The notice provision requires a
stockholder who desires to raise new business to provide certain information to
the Holding Company concerning the nature of the new business, the stockholder
and the stockholder's interest in the business matter. Similarly, a stockholder
wishing to nominate any person for election as a director must provide the
Holding Company with certain information concerning the nominee and the
proposing stockholder.
Purpose and Takeover Defensive Effects of the Holding Company's Certificate
of Incorporation and Bylaws. The Board of Directors of the Savings Bank
believes that the provisions described above are prudent and will reduce the
Holding Company's vulnerability to takeover attempts and certain other
transactions that have not been negotiated with and approved by its Board of
Directors. These provisions will also assist the Savings 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 Savings Bank and Holding Company and its
stockholders. In the judgment of the Board of Directors, the Holding Company's
Board will be in the best 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 interest 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 a price reflective of the true value of the
Holding Company and that is in the best interest of all stockholders.
Attempts to acquire control of financial institutions and their holding
companies have recently become increasingly common. Takeover attempts that have
not been negotiated with and approved by the Board of Directors present to
stockholders the risk of a takeover on terms that may be less favorable than
might otherwise be available. A transaction that 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 of the Holding
Company for 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 the 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
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at a time that may be disadvantageous, or retaining their investment in an
enterprise that 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 benefits of certain
protective provisions of the Exchange Act, if the number of beneficial owners
became less than 300, thereby allowing for Exchange Act deregistration.
Despite the belief of the Savings 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 that 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 Board of Directors of the Savings 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
charter provisions regarding the acquisition of its equity securities that would
be permitted for a Delaware business corporation. The Holding Company and the
Savings Bank do not presently intend to propose the adoption of further
restrictions on the acquisition of the Holding Company's equity securities.
The cumulative effect of the restriction on acquisition of the Holding
Company contained in the Certificate of Incorporation and Bylaws of the Holding
Company and in Federal and Delaware law may be to discourage potential takeover
attempts and perpetuate incumbent management, even though certain stockholders
of the Holding Company may deem a potential acquisition to be in their best
interests, or deem existing management not to be acting in their best interests.
DESCRIPTION OF CAPITAL STOCK
OF THE HOLDING COMPANY
General
The Holding Company is authorized to issue 6,000,000 shares of Common Stock
having a par value of $.01 per share and 1,000,000 shares of preferred stock
having a par value of $.01 per share. The Holding Company currently expects to
issue up to 1,495,000 shares of Common Stock and no shares of preferred stock in
the Conversion. Each share of the Holding Company's Common Stock will have the
same relative rights as, and will be identical in all respects with, each other
share of Common Stock. Upon payment of the Purchase Price for the Common Stock,
in accordance with the Plan of Conversion, all such stock will be duly
authorized, fully paid and nonassessable.
The Common Stock of the Holding Company will represent nonwithdrawable
capital, will not be an account of any type, and will not be insured by the FDIC
or any other government agency.
Common Stock
Dividends. The Holding Company can pay dividends out of statutory surplus
or from certain net profits if, as and when declared by its Board of Directors.
The payment of dividends by the Holding Company is subject to limitations which
are imposed by law and applicable regulation. See "DIVIDEND POLICY" and
"REGULATION." The holders of Common Stock of the Holding Company will be
entitled to receive and share equally in such dividends as may be declared by
the Board of Directors of the Holding Company out of funds legally available
therefor. If the Holding Company issues preferred stock, the holders thereof
may have a priority over the holders of the Common Stock with respect to
dividends.
87
<PAGE>
Stock Repurchases. The Plan and OTS regulations place certain limitations
on the repurchase of the Holding Company's capital stock. See "THE CONVERSION -
- - Restrictions on Repurchase of Stock" and "USE OF PROCEEDS."
Voting Rights. Upon Conversion, the holders of Common Stock of the Holding
Company will possess exclusive voting rights in the Holding Company. They will
elect the Holding Company's Board of Directors and act on such other matters as
are required to be presented to them under Delaware law or as are otherwise
presented to them by the Board of Directors. Except as discussed in
"RESTRICTIONS ON ACQUISITION OF THE HOLDING COMPANY," each holder of Common
Stock will be entitled to one vote per share and will not have any right to
cumulate votes in the election of directors. If the Holding Company issues
preferred stock, holders of the Holding Company preferred stock may also possess
voting rights. Certain matters require a vote of 80% of the outstanding shares
entitled to vote thereon. See "RESTRICTIONS ON ACQUISITION OF THE HOLDING
COMPANY."
As a federal mutual savings bank, corporate powers and control of the
Savings Bank are vested in its Board of Directors, who elect the officers of the
Savings Bank and who fill any vacancies on the Board of Directors as it exists
upon Conversion. Subsequent to Conversion, voting rights will be vested
exclusively in the owners of the shares of capital stock of the Savings Bank,
all of which will be owned by the Holding Company, and voted at the direction of
the Holding Company's Board of Directors. Consequently, the holders of the
Common Stock will not have direct control of the Savings Bank.
Liquidation. In the event of any liquidation, dissolution or winding up of
the Savings Bank, the Holding Company, as holder of the Savings Bank's capital
stock would be entitled to receive, after payment or provision for payment of
all debts and liabilities of the Savings Bank (including all deposit accounts
and accrued interest thereon) and after distribution of the balance in the
special liquidation account to Eligible Account Holders and Supplemental
Eligible Account Holders (see "THE CONVERSION"), all assets of the Savings Bank
available for distribution. In the event of liquidation, dissolution or winding
up of the Holding Company, the holders of its common stock would be entitled to
receive, after payment or provision for payment of all its debts and
liabilities, all of the assets of the Holding Company available for
distribution. If Holding Company preferred stock is issued, the holders thereof
may have a priority over the holders of the Common Stock in the event of
liquidation or dissolution.
Preemptive Rights. Holders of the Common Stock of the Holding Company will
not be entitled to preemptive rights with respect to any shares that may be
issued. The Common Stock is not subject to redemption.
Preferred Stock
None of the shares of the authorized Holding Company preferred stock will
be issued in the Conversion and there are no plans to issue the preferred stock.
Such stock may be issued with such designations, powers, preferences and rights
as the Board of Directors may from time to time determine. The Board of
Directors can, without stockholder approval, issue preferred stock with voting,
dividend, liquidation and conversion rights that could dilute the voting
strength of the holders of the Common Stock and may assist management in
impeding an unfriendly takeover or attempted change in control.
Restrictions on Acquisition
Acquisitions of the Holding Company are restricted by provisions in its
Certificate of Incorporation and Bylaws and by the rules and regulations of
various regulatory agencies. See "REGULATION" and "RESTRICTIONS ON ACQUISITION
OF THE HOLDING COMPANY."
88
<PAGE>
REGISTRATION REQUIREMENTS
The Holding Company will register the Common Stock with the SEC pursuant to
Section 12(g) of the Exchange Act upon the completion of the Conversion and will
not deregister its Common Stock for a period of at least three years following
the completion of the Conversion. Upon such registration, the proxy and tender
offer rules, insider trading reporting and restrictions, annual and periodic
reporting and other requirements of the Exchange Act will be applicable.
LEGAL AND TAX OPINIONS
The legality of the Common Stock has been passed upon for the Holding
Company by Breyer & Aguggia, Washington, D.C. The federal tax consequences of
the Offerings have been opined upon by Breyer & Aguggia and the Missouri tax
consequences of the Offerings have been opined upon by Moore, Horton & Carlson,
P.C., Mexico, Missouri. Breyer & Aguggia and Moore, Horton & Carlson, P.C. have
consented to the references herein to their opinions. Certain legal matters
will be passed upon for Trident Securities by Malizia, Spidi, Sloane & Fisch,
P.C., Washington, D.C.
EXPERTS
The consolidated financial statements of the Savings Bank as of April 30,
1996 and 1995 and for each of the three years in the period ended April 30, 1996
included in this Prospectus have been audited by Moore, Horton & Carlson, P.C.,
independent auditors, as stated in its report appearing herein, and have been so
included in reliance upon the report of such firm given upon its authority as
experts in accounting and auditing.
RP Financial has consented to the publication herein of the summary of its
report to the Savings Bank setting forth its opinion as to the estimated pro
forma market value of the Holding Company and the Savings Bank as converted and
its letter with respect to subscription rights and to the use of its name and
statements with respect to it appearing herein.
ADDITIONAL INFORMATION
The Holding Company has filed with the SEC a Registration Statement on Form
S-1 (File No. 333-8461) under the Securities Act with respect to the Common
Stock offered in the Conversion. This Prospectus does not contain all the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the SEC. Such
information may be inspected at the public reference facilities maintained by
the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at its
regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies
may be obtained at prescribed rates from the Public Reference Section of the SEC
at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the
Registration Statement is publicly available through the SEC's World Wide Web
site on the Internet (http://www.sec.gov).
The Savings Bank has filed with the OTS an Application for Approval of
Conversion, which includes proxy materials for the Savings Bank's Special
Meeting and certain other information. This Prospectus omits certain
information contained in such Application. The Application, including the proxy
materials, exhibits and certain other information that are a part thereof, may
be inspected, without charge, at the offices of the OTS, 1700 G Street, N.W.,
Washington, D.C. 20552 and at the office of the Regional Director of the OTS at
the Midwest Regional Office of the OTS, 122 W. John Carpenter Freeway, Suite
600, Irving, Texas 75039.
89
<PAGE>
Index To Consolidated Financial Statements
Fulton Savings Bank, FSB
<TABLE>
<CAPTION>
Pages
<S> <C>
Independent Auditors' Report................................ F-1
Consolidated Statements of Financial Condition as of
April 30, 1996 and 1995.................................... F-2
Consolidated Statements of Changes in Equity for the Years
Ended April 30, 1996, 1995 and 1994........................ F-3
Consolidated Statements of Income for the Years Ended
April 30, 1996, 1995 and 1994.............................. 19
Consolidated Statements of Cash Flows for the Years
Ended April 30, 1996, 1995 and 1994........................ F-4
Notes to Consolidated Financial Statements.................. F-6
</TABLE>
* * *
All schedules are omitted as the required information either is not
applicable or is included in the Consolidated Financial Statements or related
Notes.
Separate financial statements on the Holding Company have not been included
since it will not engage in material transactions, if any, until after the
Conversion. The Holding Company, which has been inactive to date, has no
significant assets, liabilities, revenues, expenses or contingent liabilities.
90
<PAGE>
[LETTERHEAD OF MOORE, HORTON & CARLSON, P.C. APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Fulton Savings Bank, FSB and Subsidiary
Fulton, Missouri
We have audited the accompanying consolidated statements of financial condition
of Fulton Savings Bank, FSB and Subsidiary ("Bank") as of April 30, 1996 and
1995, and the related consolidated statements of income, changes in equity, and
cash flows for each of the three years in the period ended April 30, 1996.
These consolidated financial statements are the responsibility of the 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 audit 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 Fulton Savings Bank,
FSB and Subsidiary as of April 30, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
April 30, 1996, in conformity with generally accepted accounting principles.
As described in Note A to the consolidated financial statements, the Bank
changed its method of accounting for investment securities to conform with
Statement of Financial Accounting Standards No. 115 effective May 1, 1994 and
accounting for impaired loans to conform with Statements of Financial Accounting
Standards Nos. 114 and 118 effective May 1, 1995.
/s/ Moore, Horton & Carlson, P.C.
Mexico, Missouri
June 14, 1996
F-1
<PAGE>
Fulton Savings Bank, FSB and Subsidiary
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
April 30
1996 1995
------------------------
<S> <C> <C> <C>
ASSETS
Cash (includes interest-bearing deposits of $1,081,064 and
$1,795,987, respectively) $ 2,923,739 $ 4,188,434
Investment securities, available-for-sale--Note B 3,216,157 4,202,298
Stock in Federal Home Loan Bank of Des Moines 637,200 624,700
Loans held for sale 2,306,090 573,434
Loans receivable--Note C 73,893,045 67,805,044
Accrued interest receivable--Note D 607,572 493,053
Premises and equipment--Note E 1,307,144 1,120,410
Foreclosed real estate--Note C 197,525 4,815
Other assets 407,516 338,419
----------- -----------
TOTAL ASSETS $85,495,988 $79,350,607
=========== ===========
LIABILITIES AND EQUITY
Liabilities
Deposits--Note F $70,315,921 $65,204,680
Advances from Federal Home Loan Bank of
Des Moines--Note H 5,000,000 4,500,000
Advances from borrowers for property taxes and
insurance 619,539 666,932
Accrued interest payable 299,514 271,642
Other liabilities 144,271 223,202
----------- -----------
TOTAL LIABILITIES 76,379,245 70,866,456
Commitments and contingencies--Notes M and N
Equity
Retained earnings - substantially restricted--Note I 9,095,894 8,475,818
Unrealized gain on securities available-for-sale,
net of taxes--Note G 20,849 8,333
----------- -----------
TOTAL EQUITY 9,116,743 8,484,151
----------- -----------
TOTAL LIABILITIES AND EQUITY $85,495,988 $79,350,607
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-2
<PAGE>
Fulton Savings Bank, FSB and Subsidiary
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years ended April 30, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Unrealized
Gain (Loss)
on
Securities
Available-
For-Sale,
Retained Net of
Earnings Taxes Equity
---------------------------------
<S> <C> <C> <C> <C>
Balance at April 30, 1993 $7,052,034 $ --- $7,052,034
Net income 881,049 --- 881,049
---------- ------- ----------
BALANCE AT APRIL 30, 1994 7,933,083 --- 7,933,083
Adoption of accounting change to record
net unrealized loss on securities
available-for-sale at May 1, 1994,
net of taxes --- (4,490) (4,490)
Net income 542,735 --- 542,735
Change in unrealized gain (loss) on
securities available-for-sale, net
of taxes --- 12,823 12,823
---------- ------- ----------
BALANCE AT APRIL 30, 1995 8,475,818 8,333 8,484,151
Net income 620,076 --- 620,076
Change in unrealized gain (loss) on
securities available-for-sale, net
of taxes --- 12,516 12,516
---------- ------- ----------
BALANCE AT APRIL 30, 1996 $9,095,894 $20,849 $9,116,743
========== ======= ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
Fulton Savings Bank, FSB and Subsidiary
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended April 30
1996 1995 1994
--------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 620,076 $ 542,735 $ 881,049
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 126,863 119,185 106,702
Amortization of premiums and discounts (1,167) 20,796 49,013
Provisions for loan losses 44,242 118,000 48,214
Deferred income taxes 5,000 8,000 (21,000)
Proceeds from sales of loans held for sale 22,632,003 11,808,305 20,343,296
Originations of loans held for sale (24,364,659) (12,381,739) (20,343,296)
Stock and patronage dividends (44,421) --- (12,200)
Loss on sale of securities available-for-sale --- 55,290 ---
Loss on sale of securities held-to-maturity --- --- 11,496
Change to assets and liabilities
increasing (decreasing) cash flows
Accrued interest receivable (114,519) (33,641) 51,516
Other assets (43,591) (38,656) 3,099
Accrued interest payable 27,872 68,186 (21,889)
Other liabilities (91,319) (21,191) (208,575)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (1,203,620) 265,270 887,425
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of available-for-sale securities (193,687) (1,978,521) (1,475,703)
Proceeds from maturities of investment securities
Held-to-maturity --- --- 1,292,382
Available-for-sale 1,200,899 32,401 ---
Proceeds from sales of investment securities
Held-to-maturity --- --- 1,195,429
Available-for-sale --- 3,136,792 ---
Loans originated, net of repayments (5,837,654) (6,678,253) (4,007,122)
Purchase of mortgage loans (484,200) (946,148) ---
Purchase of premises and equipment (307,182) (85,076) (167,849)
Proceeds from sale of foreclosed real estate --- --- 77,516
Expenditures on foreclosed real estate (3,099) --- ---
------------ ------------ ------------
NET CASH USED IN
INVESTING ACTIVITIES (5,624,923) (6,518,805) (3,085,347)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 5,111,241 574,591 (604,792)
Advances from Federal Home Loan Bank of DesMoines
Borrowings 1,500,000 6,500,000 ---
Repayments (1,000,000) (2,000,000) ---
Net increase (decrease) in advance payments
by borrowers for taxes and insurance
(47,393) 44,954 (27,257)
------------ ------------ ------------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 5,563,848 5,119,545 (632,049)
------------ ------------ ------------
NET DECREASE IN CASH (1,264,695) (1,133,990) (2,829,971)
Cash, beginning of period 4,188,434 5,322,424 8,152,395
------------ ------------ ------------
CASH, END OF PERIOD $ 2,923,739 $ 4,188,434 $ 5,322,424
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
Fulton Savings Bank, FSB and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
April 30, 1996, 1995 and 1994
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations: The Fulton Savings Bank, FSB and Subsidiary (the "Bank")
- --------------------
provides a variety of financial services to individuals and corporate customers
through its headquarters located in Fulton, Missouri and its branch located in
Holts Summit, Missouri. The Bank's primary deposit products are interest-
bearing checking accounts and certificates of deposit. Its primary lending
products are one-to four-family residential loans.
The Bank was formerly known as Fulton Savings and Loan Association prior to its
conversion from a state to a federal charter on April 15, 1995.
Principles of Consolidation: The consolidated financial statements include the
- ---------------------------
accounts of Fulton Savings Bank, FSB and its wholly-owned subsidiary, Multi-
Purpose Service Agency, Inc. Multi-Purpose Service Agency, Inc. principally
provides insurance products for the Bank's customers. All significant
intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates: The preparation of financial statements in conformity with
- ----------------
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change
relate to the determination of the allowance for losses on loans and the
valuation of real estate acquired in connection with foreclosures or in
satisfaction of loans. In connection with the determination of the allowances
for losses on loans and foreclosed real estate, management obtains independent
appraisals for significant properties.
A majority of the Bank's loan portfolio consist of one-to four-family
residential loans in the central Missouri area. The central Missouri economy is
primarily dependent upon state government, light manufacturing and agriculture.
Accordingly, the ultimate collectibility of a substantial portion of the Bank's
portfolio is susceptible to changes in local market conditions.
While management uses available information to recognize losses on loans and
foreclosed real estate, future additions to the allowances may be necessary
based on changes in local economic conditions. In addition, regulatory
agencies, as an integral part of their examination process, periodically review
the Bank's allowances for losses on loans and foreclosed real estate. Such
agencies may require the Bank to recognize additions to the allowances based on
their judgements about information available to them at the time of their
examination. Because of these factors, in management's judgement the allowances
for loan losses reflected in the consolidated financial statements is adequate
to absorb estimated losses that may exist in the current portfolio.
F-5
<PAGE>
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cont'd
Liquidity Requirement: Regulations require the Bank to maintain an amount equal
- ---------------------
to 5% of deposits (net of loans on deposits) plus short-term borrowings in cash
and U.S. Government and other approved securities.
Investment Securities: Effective May 1, 1994, the Bank adopted Statement of
- ---------------------
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities", which established three
classifications of investment securities: trading, held-to-maturity and
available-for-sale. Trading securities are acquired principally for the purpose
of near-term sales. Such securities are reported at fair value and unrealized
gains and losses are included in income. Securities which are designated as
held-to-maturity are designated as such because the investor has the ability and
the intent to hold these securities to maturity. Such securities are reported
at amortized cost.
All other securities are designated as available-for-sale, a designation which
provides the investor with certain flexibility in managing its investment
portfolio. Such securities are reported at fair value; net unrealized gains and
losses are excluded from income and reported net of applicable income taxes as
a separate component of equity.
Gains or losses on sales of securities are recognized in operations at the time
of sale and are determined by the difference between the net sales proceeds and
the cost of the securities using the specific identification method, adjusted
for any unamortized premiums or discounts. Premiums or discounts are amortized
or accreted to income using the interest method over the period to maturity.
In adopting SFAS No. 115, the Bank modified its accounting policies and
designated its securities in accordance with the three classifications. The
Bank's adoption of SFAS No. 115 resulted in the classification of all securities
as available-for-sale. At April 30, 1996 and 1995 the Bank had no securities
designated as trading or held-to-maturity.
Mortgage-backed Securities: Mortgage-backed securities represent participating
- --------------------------
interests in pools of long-term first mortgage loans originated and serviced by
issuers of the securities. Mortgage-backed securities are reported at fair
value; net unrealized gains and losses are excluded from income and reported net
of applicable income taxes as a separate component of equity. Gains or losses
on sales of securities are recognized in operations at the time of sale and are
determined by the difference between the net sales proceeds and the cost of the
securities using the specific identification method, adjusted for any
unamortized premiums or discounts. Premiums or discounts are amortized or
accreted to income using the interest method over the period to maturity.
Stock in Federal Home Loan Bank of Des Moines: Stock in the Federal Home Loan
- ---------------------------------------------
Bank of Des Moines is stated at cost and the amount of stock held is determined
by regulation. No ready market exists for such stock and it has no quoted
market value.
Loans Held for Sale: Mortgage loans originated and held for sale in the
- -------------------
secondary market are carried at the lower of cost or market value determined on
an aggregate basis. Gains and losses, if any, on the sale of these loans are
determined using the specific identification method.
Loans Receivable: Loans are stated at unpaid principal balances, less the
- ----------------
allowance for loan losses and net deferred loan fees.
Loan origination and commitment fees, as well as certain direct origination
costs, are deferred and amortized as a yield adjustment over the contractual
maturity of the related loans using the interest method. Amortization of
deferred loan fees is discontinued when a loan is placed on nonaccrual status.
F-6
<PAGE>
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cont'd
Loans are placed on nonaccrual status when principal or interest is delinquent
for 90 days or more. Any unpaid interest previously accrued on those loans is
reversed from income. Interest payments received on such loans are applied as a
reduction of the loan principal balance.
The allowance for loan losses is maintained at a level which, in management's
judgment, is adequate to absorb credit losses inherent in the loan portfolio.
The amount of the allowance is based on management's evaluation of the
collectibility of the loan portfolio, including the nature of the
portfolio, credit concentrations, trends in historical loss experience, specific
impaired loans and economic conditions. Allowances for impaired loans are
generally determined based on collateral values or the present value of
estimated cash flows. The allowance is increased by a provision for loan
losses, which is charged to expense, and reduced by charge-offs, net of
recoveries.
The Bank adopted 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, an amendment of SFAS No. 114", effective May
1, 1995. These statements address the accounting by creditors for impairment of
certain loans. They apply to all creditors and to all loans, uncollateralized
as well as collateralized, except for large groups of small-balance homogeneous
loans that are collectively evaluated for impairment, loans measured at fair
value or at lower of cost or fair value, leases, and debt securities. The Bank
considers all one-to four-family residential mortgage loans, construction loans,
and all consumer and other loans to be smaller homogeneous loans.
These statements apply to all loans that are restructured involving a
modification of terms. Loans within the scope of these statements are
considered impaired when, based on current information and events, it is
probable that all principal and interest will not be collected in accordance
with the contractual terms of the loans. Management determines the impairment
of loans based on knowledge of the borrower's ability to repay the loan
according to the contractual agreement and the borrower's repayment history.
Management applies its normal loan review procedures in determining when a loan
is impaired. The Bank applies SFAS No. 114 on a loan by loan basis. All
nonaccrual loans are considered impaired. Impaired loans are measured based on
present value of expected cash flows, the loan's observable market price or the
fair value of the underlying collateral. If the value computed is less than the
recorded value, a valuation allowance is recorded for the difference as a
component of the provision for loan loss expense. Management has elected to
continue to use its existing nonaccrual methods for recognizing interest income
on impaired loans.
Premises and Equipment: Premises and equipment are stated at cost less
- ----------------------
accumulated depreciation and amortization. Depreciation and amortization are
computed on a straight-line basis over the estimated useful lives of the
respective assets, which range from five to fifty years.
Foreclosed Real Estate: Real estate acquired in settlement of loans or in lieu
- ----------------------
of loan foreclosure is carried at the lower of the balance of the related loan
at the time of foreclosure or fair value less the estimated costs to sell the
asset. Costs of holding foreclosed property are charged to expense in the
current period, except for significant property improvements which are
capitalized to the extent that carrying value does not exceed estimated fair
market value, less estimated cost to sell.
Income Taxes: 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 labilities and their respective income
tax bases. As changes in tax law or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes.
F-7
<PAGE>
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cont'd
Statements of Cash Flows: For purposes of the cash flows, cash and amounts due
- ------------------------
from depository institutions and interest-bearing deposits in other banks with a
maturity of three months or less at date of purchase are considered cash
equivalents.
Interest Rate Risk: The Bank's asset base is exposed to risk including the risk
- ------------------
resulting from changes in interest rates in timing of cash flows. The Bank
monitors the effect of such risks by considering the mismatch of the maturities
of its assets and liabilities in the current interest rate environment and the
sensitivity of assets and liabilities to changes in interest rates. The Bank's
management has considered the effect of significant increases and decreases in
interest rates and believes such changes, if they occurred, would be manageable
and would not affect the ability of the Bank to hold its assets as planned.
However, the Bank is exposed to significant market risk in the event of
significant and prolonged interest rate changes.
New Accounting Standards:
- ------------------------
Accounting for Impairment of Long-Lived Assets
In March 1995, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-
Lived Assets to be Disposed of" and is effective for years beginning after
December 15, 1995. The statement is effective for and will be adopted by
the Bank beginning May 1, 1996. The statement generally addresses required
disclosures for long-lived impaired assets and long-lived impaired assets
to be disposed of. The impact of the adoption of the new accounting
standard on the Bank's consolidated financial statements is not expected to
be material.
Accounting for Loan Servicing Rights
In May 1995, the FASB issued SFAS No. 122, "Accounting for Mortgage
Servicing Rights" and is effective for years beginning after December 15,
1995. The statement is effective for and will be adopted by the Bank
beginning May 1, 1996. The statement 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 impact of the adoption of the new
accounting standard on the Bank's consolidated financial statements is not
expected to be material.
Accounting for Stock-Based Compensation
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation". The statement encourages all entities to adopt a new method
of accounting to measure compensation cost of all employee stock
compensation plans based on the estimated fair value of the award at the
date it is granted. Companies are, however, allowed to continue to measure
compensation cost for those plans using the intrinsic value based method of
accounting, which generally does not result in compensation expense
recognition for most plans. Companies that elect to remain with the
existing accounting are required to disclose in a footnote to the financial
statements pro forma net income and, if presented, earnings per share, as
if SFAS No. 123 had been adopted. The accounting requirements of SFAS No.
123 are effective for transactions entered into in fiscal years that begin
after December 15, 1995; however, companies are required to disclose
information for awards granted in their first fiscal year beginning after
December 15, 1994. Currently, the Bank does not have any stock-based
compensation plans. However, in the future, such plans may be offered and
the provisions of SFAS No. 123 would apply.
Reclassification: Certain amounts in the 1995 and 1994 consolidated financial
- ----------------
statements have been reclassified to conform with the 1996 presentation.
F-8
<PAGE>
NOTE B--INVESTMENT SECURITIES, AVAILABLE-FOR-SALE
<TABLE>
<CAPTION>
Gross Unrealized
Amortized -------------------- Fair
Cost Gains Losses Value
-------------- ------------- -------- ----------
<S> <C> <C> <C> <C>
April 30, 1996
U.S. Government obligations $3,182,778 $34,524 $1,396 $3,215,906
Mortgage-backed securities 222 29 --- 251
---------- ------- ------ ----------
$3,183,000 $34,553 $1,396 $3,216,157
========== ======= ====== ==========
April 30, 1995
U.S. Government obligations $4,187,924 $13,139 $ --- $4,201,063
Mortgage-backed securities 1,120 115 --- 1,235
---------- ------- ------ ----------
$4,189,044 $13,254 $ --- $4,202,298
========== ======= ====== ==========
</TABLE>
The scheduled maturities of debt securities at April 30, 1996 by contractual
maturity, are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations
without call or prepayment penalties.
<TABLE>
<CAPTION>
Amortized Fair
Cost Value
---------- ----------
<S> <C> <C>
Amounts maturing:
One year or less $2,488,365 $2,510,625
After one through five years 694,413 705,281
Mortgage-backed securities 222 251
---------- ----------
$3,183,000 $3,216,157
========== ==========
</TABLE>
The Bank has investment securities pledged to secure deposits as required or
permitted by law, with a carrying value of $1,319,280 and $1,113,739 at April
30, 1996 and 1995, respectively.
The Bank sold available-for-sale securities in 1995 and held-to-maturity
securities in 1994 for total gross proceeds of $3,136,791 and $1,195,430 which
resulted in gross realized losses of $55,290 and $11,496 for the year ended
April 30, 1995 and 1994, respectively.
NOTE C--LOANS RECEIVABLE
Loans receivable consist of the following at April 30:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Mortgage loans:
One-to four-family residences $46,740,611 $46,243,774
Multi-family 3,844,456 3,587,641
Commercial 8,706,428 6,559,633
Construction 7,686,681 5,141,697
Land 1,518,202 1,188,597
----------- -----------
68,496,378 62,721,342
Less undisbursed portion of mortgage loans 3,742,642 2,174,494
----------- -----------
64,753,736 60,546,848
</TABLE>
F-9
<PAGE>
NOTE C--LOANS RECEIVABLE - Cont'd
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Consumer and other loans:
Consumer $ 6,683,299 $ 5,184,140
Automobile 2,080,708 1,912,348
Savings 345,399 335,578
Commercial 295,759 160,052
Equity line of credit 325,941 309,310
Education 187,796 116,108
Other 2,477 2,557
----------- -----------
9,921,379 8,020,093
----------- -----------
74,675,115 68,566,941
Less allowance for loan losses 782,070 761,897
----------- -----------
$73,893,045 $67,805,044
=========== ===========
</TABLE>
The Bank originates and maintains loans receivable which are substantially
concentrated in its lending area including Fulton, Missouri, Callaway County and
its contiguous counties. The Bank's principal market area consist of rural
communities and substantially all of the Bank's loans are to residents of or
secured by properties located in its principal lending area. Accordingly, the
ultimate collectibility of the Bank's loan portfolio is dependent upon market
conditions in that area. This geographic concentration is considered in
management's establishment of the allowance for loan losses.
In the normal course of business, the Bank has made loans to its directors and
officers. In the opinion of management, related party loans are made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated persons and do
not involve more than the normal risk of collectibility. The aggregate dollar
amount of loans outstanding to directors and officers total approximately
$357,000 and $383,000 at April 30, 1996 and 1995, respectively.
At April 30, 1996, 1995 and 1994, the Bank serviced loans amounting to
$84,363,839, $73,802,855 and $71,940,941 respectively, for the benefit of
others. Also, the Bank had loans serviced by others amounting to $2,654,213,
$2,304,318 and $2,280,402 at April 30, 1996, 1995 and 1994, respectively.
Allowance for loan losses is as follows:
<TABLE>
<CAPTION>
Year Ended April 30
1996 1995 1994
--------- --------- ----------
<S> <C> <C> <C>
Balance beginning of period $761,897 $665,068 $ 718,950
Provision for loan losses 44,242 118,000 47,599
Charge-offs (27,391) (49,071) (111,303)
Recoveries 3,322 27,900 9,822
-------- -------- ---------
BALANCE, END OF PERIOD $782,070 $761,897 $ 665,068
======== ======== =========
</TABLE>
At April 30, 1996 the recorded investment in impaired loans, for which there is
no need for a valuation allowance based upon the measure of the loan's fair
value of the underlying collateral, was $69,229. The average recorded investment
in impaired loans during the year ended April 30, 1996, was $111,776 and the
related interest income that would have been recorded had the loans been current
in accordance with their original terms amounted to approximately $10,000. The
amount of interest included in interest income on such loans for the year ended
April 30, 1996 amounted to approximately $6,000.
The allowance for losses on foreclosed real estate is $-0- at April 30, 1996 and
$6,051 at April 30, 1995, 1994 and May 1, 1993.
F-10
<PAGE>
NOTE D--ACCRUED INTEREST RECEIVABLE
Accrued interest receivable consist of the following at April 30:
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Loans $552,739 $426,064
Investments securities 54,833 66,989
-------- --------
$607,572 $493,053
======== ========
</TABLE>
NOTE E--PREMISES AND EQUIPMENT
Premises and equipment consist of the following at April 30:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Land $ 129,705 $ 129,705
Building and improvements 1,012,549 889,907
Furniture and equipment 1,120,859 953,568
---------- ----------
2,263,113 1,973,180
Less accumulated depreciation and amortization 955,969 852,770
---------- ----------
$1,307,144 $1,120,410
========== ==========
</TABLE>
NOTE F--DEPOSITS
Deposit account balances are summarized as follows at April 30:
<TABLE>
<CAPTION>
Weighted
Average Rate 1996 1995
at April 30, ------------------ --------------------
1996 Amount % Amount %
------------ ----------------------------------------
<S> <C> <C> <C> <C> <C>
Non-interest-bearing ---% $ 1,709,399 2.4% $ 488,208 .8%
NOW 2.62 4,259,355 6.1 3,880,085 5.9
Money Market 3.43 3,040,067 4.3 4,565,323 7.0
Passbook savings 3.03 5,909,969 8.4 5,492,922 8.4
----------- ----- ----------- -----
14,918,790 21.2 14,426,538 22.1
Certificates of deposit:
2.00 to 2.99% --- --- --- 8,104 ---
3.00 to 3.99% 3.70 105,056 .1 450,804 .7
4.00 to 4.99% 4.81 6,118,806 8.7 12,878,849 19.7
5.00 to 5.99% 5.49 26,144,168 37.2 16,992,651 26.1
6.00 to 6.99% 6.31 20,260,958 28.9 17,538,780 26.9
7.00 to 7.99% 7.14 2,751,036 3.9 2,862,390 4.4
8.00 to 8.99% 8.00 17,107 --- 45,564 .1
9.00 to 9.99% --- --- --- --- ---
10.00% and over --- --- --- 1,000 ---
----------- ----- ----------- -----
5.79 55,397,131 78.8 50,778,142 77.9
----------- ----- ----------- -----
5.13 $70,315,921 100.0% $65,204,680 100.0%
=========== ===== =========== =====
</TABLE>
F-11
<PAGE>
NOTE F--DEPOSITS - Cont'd
The aggregate amount of certificates of deposit with a minimum denomination of
$100,000 was approximately $5,879,277 and $4,791,054 at April 30, 1996 and 1995,
respectively. Deposits over $100,000 are not federally insured.
The Bank held deposits of approximately $1,578,000 and $1,253,000 for its
directors and officers at April 30, 1996 and 1995, respectively.
At April 30, 1996, contractual maturities of certificates of deposit are as
follows:
<TABLE>
<CAPTION>
Stated Year Ended April 30
Interest Rate 1997 1998 1999 2000 2001 After
- ------------- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3.00 to 3.99% $ 105,056 $ --- $ --- $ --- $ --- $ ---
4.00 to 4.99% 5,962,465 156,341 --- --- --- ---
5.00 to 5.99% 17,458,244 6,403,895 2,130,213 139,702 12,114 ---
6.00 to 6.99% 8,673,857 6,628,049 2,116,434 2,506,856 328,762 7,000
7.00 to 7.99% 1,766,772 133,500 505,370 260,781 84,613 ---
8.00 to 8.99% --- --- 3,000 --- --- 14,107
----------- ----------- ---------- ---------- ---------- ----------
$33,966,394 $13,321,785 $4,755,017 $2,907,339 $ 425,489 $ 21,107
=========== =========== ========== ========== ========== ==========
Interest expense on deposits are as follows:
Year Ended April 30
1996 1995 1994
----------------------------------
Now, Money Market and Passbook savings accounts $ 386,380 $ 484,797 $ 484,470
Certificate accounts 3,077,153 2,261,993 2,186,207
---------- ---------- ----------
$3,463,533 $2,746,790 $2,670,677
========== ========== ==========
</TABLE>
NOTE G--INCOME TAXES
Components of income tax expense (benefit) are as follows:
<TABLE>
<CAPTION>
Year Ended April 30
1996 1995 1994
--------- --------- --------
<S> <C> <C> <C>
Current $368,000 $309,500 $463,500
Deferred (benefit) (5,000) (8,000) 21,000
-------- -------- --------
$363,000 $301,500 $484,500
======== ======== ========
</TABLE>
In addition, the Bank recorded deferred income tax to equity relating to
unrealized gains and losses on investment securities available-for-sale of
$7,571 and $ 7,387 for the years ended April 30, 1996 and 1995, respectively.
F-12
<PAGE>
NOTE G--INCOME TAXES - Cont'd
The provision for income taxes as shown on the consolidated statements of income
differs from amounts computed by applying the statutory federal income tax rate
of 34% to income before taxes as follows:
<TABLE>
<CAPTION>
Year Ended April 30
1996 1995 1994
---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income tax expense at statutory rates $334,239 34.0% $287,091 34.0% $464,287 34.0%
Increase (decrease) resulting from:
State income taxes, net of federal benefit 21,120 2.1 24,090 2.8 33,214 2.4
Other, net 7,641 0.8 (9,681) (1.1) (13,001) (.9)
-------- ---- -------- ---- -------- ----
$363,000 36.9% $301,500 35.7% $484,500 35.5%
======== ==== ======== ==== ======== ====
</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 a
significant portion of deferred tax assets and liabilities included in other
liabilities are as follows at April 30:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Deferred tax assets
Allowance for loan losses $ 240,000 $ 227,000
Deferred tax liabilities
Depreciation (120,000) (117,000)
Federal Home Loan Bank of Des Moines stock dividend (76,000) (71,000)
Unrealized gain on available-for-sale securities (12,308) (4,920)
--------- ---------
NET DEFERRED TAX ASSET $ 31,692 $ 34,080
========= =========
</TABLE>
NOTE H--ADVANCES FROM FEDERAL HOME LOAN BANK OF DES MOINES (FHLB)
Advances from FHLB consist of the following at April 30:
<TABLE>
<CAPTION>
Stated Interest
Maturity Interest Rate at
Date Rate April 30, 1996 1996 1995
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
August 30, 1996 6.50% 6.50% $2,000,000 $2,000,000
March 20, 1997 7.12 7.12 2,500,000 2,500,000
April 11, 1997 Variable 5.90 500,000 ---
---------- ----------
$5,000,000 $4,500,000
========== ==========
</TABLE>
The Bank has signed a blanket pledge agreement with the FHLB under which it can
draw advances of unspecified amounts from the FHLB. The Bank must hold an
unencumbered portfolio of eligible one-to four-family residential mortgages with
a book value of not less than 150% of the indebtedness.
F-13
<PAGE>
NOTE I--EQUITY
Pursuant to the Financial Institutions Reform Recovery and Enforcement Act
("FIRREA") of 1989, as implemented by a rule promulgated by OTS, saving
institutions are required to have a minimum regulatory tangible capital equal to
1.5% of adjusted total assets, a minimum of 3.0% core/leverage capital ratio,
and a minimum 8% total risk-based capital. FIRREA also restricts investment
activities with respect to noninvestment grade corporate debt and certain other
investments and increases the required ratio of housing-related assets in order
to qualify as a savings institution.
The following table presents the Bank's capital position relative to its
regulatory capital requirements under FIRREA at April 30, 1996:
<TABLE>
<CAPTION>
Regulatory Capital
(dollars in thousands)
Tangible Core Risk-based
-------------------------------
<S> <C> <C> <C>
GAAP capital $9,117 $9,117 $9,117
Adjustments to Capital:
Unrealized gains (21) (21) (21)
General valuation allowances as
defined --- --- 642
Real estate investment, net --- --- (252)
------ ------ ------
REGULATORY CAPITAL 9,096 9,096 9,486
Regulatory capital requirement 1,282 2,564 4,111
------ ------ ------
EXCESS REGULATORY CAPITAL $7,814 $6,532 $5,375
====== ====== ======
Regulatory capital ratio 10.64% 10.64% 18.46%
Regulatory capital requirement 1.50 3.00 8.00
------ ------ ------
EXCESS REGULATORY CAPITAL RATIO 9.14% 7.64% 10.46%
====== ====== ======
</TABLE>
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 the 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 provided 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.
The Bank has qualified under provisions of the Internal Revenue Code which
permit it to deduct from taxable income a provision for bad debts, which differs
from the provisions for such losses charged to income. Accordingly, retained
earnings at April 30, 1996, includes income of approximately $1,900,000 for
which no provision for federal income taxes has been made. If, in the future,
this portion of retained earnings is used for any purpose other than to absorb
loan losses, federal income taxes may be imposed at the then applicable rates.
The Bank's retained earnings at April 30, 1996, were substantially restricted
because of the effect of these bad debt reserves.
F-14
<PAGE>
NOTE J--EMPLOYEE BENEFITS
The Bank has a 401(k) salary reduction plan that covers all employees meeting
specific age and length of service requirements. Under the plan, the Bank
matches up to 3 percent of participating employees' salaries. Pension costs
recognized under the plan totalled $19,330, $17,913 and $12,199 for the year
ended April 30, 1996, 1995 and 1994, respectively.
NOTE K--SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for taxes and interest are as follows:
<TABLE>
<CAPTION>
Year Ended April 30
1996 1995 1994
----------------------------------
<S> <C> <C> <C>
Income taxes $ 247,100 $ 374,321 $ 608,355
========== ========== ==========
Interest $3,753,158 $2,876,055 $2,692,566
========== ========== ==========
</TABLE>
NOTE L--SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Noncash investment and financing activities are as follows:
<TABLE>
<CAPTION>
Year Ended April 30
1996 1995 1994
--------------------------
<S> <C> <C> <C>
Loans to facilitate sales of real estate $ 77,805 $70,500 $ ---
======== ======= =======
Foreclosed real estate acquired by foreclosure
or deed in lieu of foreclosure $267,861 $92,617 $49,524
======== ======= =======
Stock and patronage dividends $ 59,826 $ --- $12,200
======== ======= =======
</TABLE>
NOTE M--FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF
CREDIT RISK
The Bank is a party to financial instruments with off-balance sheet risk in the
normal course of business to meet customer financing needs. These financial
instruments consist principally of commitments to extend credit. The Bank uses
the same credit policies in making commitments and conditional obligations as it
does for on-balance sheet instruments. The Bank's exposure to credit loss in
the event of nonperformance by the other party is represented by the contractual
amount of those instruments. The Bank does not generally require collateral or
other security on unfunded loan commitments until such time that loans are
funded.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses. The Bank
evaluates each customer's creditworthiness on a case-by-case basis. The amount
of collateral obtained, if deemed necessary by the Bank upon extension of
credit, is based on management's credit evaluation of the counterparty. Such
collateral consists primarily of residential properties.
F-15
<PAGE>
NOTE M--FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONCENTRATIONS OF
CREDIT RISK - Cont'd
The Bank had the following outstanding commitments at April 30, 1996:
<TABLE>
<S> <C>
Undisbursed portion of mortgage loans $3,742,642
Undisbursed equity line of credit 88,359
Commitments to originate mortgage loans with variable or pending
interest rates 3,007,780
Commitments to originate mortgage loans with fixed interest rates
ranging from 7.875% to 8.75% 984,450
----------
TOTAL $7,823,231
==========
</TABLE>
At April 30, 1996, the Bank had amounts on deposit at banks and federal agencies
in excess of federally insured limits of approximately $2,518,000.
NOTE N--COMMITMENTS AND CONTINGENCIES
In the ordinary course of business, the Bank has various outstanding commitments
and contingent liabilities that are not reflected in the accompanying
consolidated financial statements. In addition, the Bank is a defendant in
certain claims and legal actions arising in the ordinary course of business. In
the opinion of management, after consultation with legal counsel, the ultimate
disposition of these matters is not expected to have a material adverse effect
on the consolidated financial position of the Bank.
The United States Congress is considering legislation that, if it became law,
would result in an assessment on all Savings Association Insurance Fund
("SAIF")-insured deposits in such amounts that will increase the SAIF reserve
ratio to 1.25% of SAIF-insured deposits. This one-time assessment has been
estimated to be approximately 80 cents, per $100 of SAIF-insured deposits. If
this legislation became law, it could result in an assessment payable by the
Bank amounting to approximately $345,000, net of tax. If this legislation
becomes law, it is anticipated that this assessment will be charged to earnings
in the period during which it is signed into law. Therefore, no provision for
such an assessment has been made to the consolidated financial statements.
Thereafter, SAIF premiums are currently expected to decline to levels
approximating Bank Insurance Fund premiums.
NOTE O--PLAN OF CONVERSION
On January 9, 1996, the Bank's Board of Directors adopted a plan of conversion
("Plan") to convert from a federally chartered mutual savings bank to a
federally chartered stock savings bank, subject to approval by the Bank's
members. The Plan, which includes the 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.
The Plan is expected to be accomplished by the sale of common stock of the
Holding Company and the acquisition of all of the capital stock of the Bank by
the Holding Company in exchange for a portion of the net proceeds of the
conversion. The Holding Company's common stock will be offered to various
eligible account holders, to the Bank's Employee Stock Ownership Plan, to other
supplemental eligible depositors and to other members of the Bank in a
subscription offering. Shares of the Holding Company's common stock not
subscribed for in the subscription offering, if any, may be offered for sale in
a community offering, as determined by the Board of Directors of the Bank.
F-16
<PAGE>
NOTE O--PLAN OF CONVERSION - Cont'd
At the time of conversion, the 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 and
supplemental eligible account holders (collectively, "eligible depositors") who
continue to maintain their deposit accounts in the Bank after conversion. In
the event of a complete liquidation of the 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.
The Bank may not declare or pay a cash dividend if the effect thereof would
cause its equity to be reduced below either the amount required for the
liquidation account or the regulatory capital requirements imposed by the OTS.
Conversion costs will be deducted from the proceeds of sale of common stock and
recorded as a reduction to equity. If the conversion is not completed, all costs
will be charged to expense. As of April 30, 1996, the Bank has incurred costs
related to the conversion of $22,722.
NOTE P--FAIR VALUE OF FINANCIAL INSTRUMENTS
On May 1, 1995, the Bank adopted SFAS No. 107, Disclosures about Fair Values of
Financial Instruments, which requires disclosure of fair value information about
financial instruments, whether or not recognized in the statement of financial
condition. In cases where quoted market prices are not available, fair values
are based on estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. In that regard, the derived
fair value estimates cannot be substantiated by comparison to independent
markets and, in many cases, could not be realized in immediate settlement of the
instruments. SFAS No. 107 excludes certain financial instruments and all
nonfinancial instruments from its disclosure requirements. Accordingly, the
aggregate fair value amounts presented do not represent the underlying value of
the Bank.
The following methods and assumptions were used by the Bank in estimating fair
values of financial instruments as disclosed herein.
Cash and due from depository institutions: The carrying amounts of cash and due
from depository institutions approximate their fair value.
Investment securities: Fair value is determined by reference to quoted market
prices.
Stock in FHLB: This stock is a restricted asset and its carrying value is a
reasonable estimate of fair value.
Loans held-for-sale: The carrying value is a reasonable estimate of fair value.
Loans receivable: The fair value of first mortgage loans is estimated by using
discounted cash flow analyses, using interest rates currently offered by the
Bank for loans with similar terms to borrowers of similar credit quality. The
majority of real estate loans are residential. First mortgage loans are
segregated by fixed and adjustable interest terms. The fair value of consumer
loans is calculated by using the discounted cash flow based upon the current
market for like instruments. Fair values for impaired loans are estimated using
discounted cash flow analyses.
Accrued interest receivable: The carrying value approximates fair value.
F-17
<PAGE>
NOTE P--FAIR VALUE OF FINANCIAL INSTRUMENTS - Cont'd
Transaction deposits: Transaction deposits, payable on demand or with
maturities of 90 days or less, have a fair value equal to book value.
Certificates of Deposit: The fair value of fixed maturity certificates of
deposit is estimated by discounting the future cash flows using the rates
currently offered for deposits of similar maturities.
Advances from borrowers for taxes and insurance: The book value approximates
fair value.
All other liabilities: The book value approximates fair value.
Off-Balance Sheet Instruments: The fair value of a loan commitment and a letter
of credit is determined based on the fees currently charged to enter into
similar agreements, taking into account the remaining terms of the agreement and
the present creditworthiness of the counterparties. Neither the fees earned
during the year on these instruments nor their value at year-end are significant
to the Bank's consolidated financial position.
Limitations: Fair value estimates are made at a specific point in time, based
on relevant market information and information about the financial instrument.
The valuation techniques employed above involve uncertainties and are affected
by assumptions used and judgements regarding prepayments, credit risk, discount
rates, cash flows and other factors. Changes in assumptions could significantly
affect the reported fair value.
In addition, the fair value estimates are based on existing on and off-balance
sheet financial instruments without attempting to estimate the value of
anticipated future business and the value of assets and liabilities that are not
considered financial instruments. For example, the Bank has a mortgage
servicing portfolio that contributes net fee income annually. The mortgage
servicing portfolio is not considered a financial instrument and its value has
not been incorporated into the fair value estimates. Also, the fair value
estimates do not include the benefit that results from the low-cost funding
provided by the deposit liabilities compared to the cost of borrowing funds in
the market. The amounts at April 30, 1996 (dollars in thousands) are as follows:
<TABLE>
<CAPTION>
Carrying Fair
Amount Value
-----------------
<S> <C> <C>
ASSETS
Cash and due from depository institutions $ 2,924 $ 2,924
Investment securities 3,216 3,216
Stock in FHLB 637 637
Loans held-for-sale, net 2,306 2,306
Loans receivable, net 73,893 73,923
Accrued interest receivable 608 608
LIABILITIES
Transaction accounts 14,919 14,919
Certificates of deposit 55,397 55,513
Advances from Federal Home Loan Bank 5,000 5,000
Advances from borrowers for taxes and insurance 620 620
Accrued interest payable 300 300
</TABLE>
F-18
<PAGE>
No dealer, salesman or any other 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 information or representation must not be relied upon as having been
authorized by Fulton Bancorp, Inc., or Fulton Savings Bank, FSB. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any of the securities offered hereby to any person or 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 Fulton Bancorp, Inc. or Fulton Savings Bank, FSB 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....................
Recent Developments............................................
Risk Factors...................................................
Fulton Bancorp, Inc............................................
Fulton Savings Bank, FSB ......................................
Use of Proceeds................................................
Dividend Policy................................................
Market for Common Stock........................................
Capitalization.................................................
Historical and Pro Forma Capital Compliance....................
Pro Forma Data.................................................
Shares to be Purchased by Management Pursuant to Subscription
Rights.......................................................
Fulton Savings Bank, FSB and Subsidiary........................
Consolidated Statements of Income..............................
Management's Discussion and Analysis of Financial..............
Condition and Results of Operations............................
Business of the Holding Company................................
Business of the Savings Bank...................................
Management of the Holding Company..............................
Management of the Savings Bank.................................
Regulation.....................................................
Taxation.......................................................
The Conversion.................................................
Restrictions on Acquisition of the Holding Company.............
Description of Capital Stock of the Holding Company............
Registration Requirements......................................
Legal and Tax Opinions.........................................
Experts........................................................
Additional Information.........................................
Index to Consolidated Financial Statements.....................
Until the later of ___________, 1996, or 25 days after commencement of the
Syndicated Community Offering of Common Stock, if any, 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.
[Logo]
(Proposed Holding Company for Fulton Savings Bank, FSB)
1,105,000 to 1,495,000 Shares of
Common Stock
----------------
Prospectus
----------------
TRIDENT SECURITIES, INC.
___________, 1996
<PAGE>
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution(1)
<TABLE>
<S> <C>
Legal fees............................... $115,000
Securities marketing legal fees.......... 28,500
Printing, postage and mailing............ 65,000
Appraisal and business plan preparation.. 27,500
Accounting fees.......................... 75,000
Securities marketing fees and expenses... 167,500
Data processing fees and expenses........ 8,500
SEC registration fee..................... 6,000
Blue Sky filing fees and expenses........ 15,000
OTS filing fees.......................... 8,400
Other expenses........................... 25,500
--------
Total................................ $541,900
========
- -------------------------
</TABLE>
(1) Assumes all of the Common Stock will be sold in the Subscription and
Direct Community Offerings.
Item 14. Indemnification of Officers and Directors
Article XVII of the Certificate of Incorporation of Fulton Bancorp,
Inc. requires indemnification of directors, officers and employees to
the fullest extent permitted by Delaware law.
Section 145 of the Delaware General Corporation Law sets forth
circumstances under which directors, officers, employees and agents
may be insured or indemnified against liability which they may incur
in their capacities:
145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS;
INSURANCE.--(a) A corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no
II-1
<PAGE>
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him or
incurred by him any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against such
liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agents, so that any
person who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
II-2
<PAGE>
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Item 15. Recent Sales of Unregistered Securities.
Not Applicable
Item 16. Exhibits and Financial Statement Schedules:
The financial statements and exhibits filed as part of this
Registration Statement are as follows:
(a) List of Exhibits
<TABLE>
<S> <C> <C>
1.1 - Form of proposed Agency Agreement among Fulton Bancorp, Inc., Fulton
Savings Bank, FSB and Trident Securities, Inc.
1.2 - Engagement Letter between Fulton Savings Bank, FSB and Trident
Securities, Inc. (a)
2 - Plan of Conversion of Fulton Savings Bank, FSB (attached as an exhibit
to the Proxy Statement included herein as Exhibit 99.5) (a)
3.1 - Certificate of Incorporation of Fulton Bancorp, Inc. (a)
3.2 - Bylaws of Fulton Bancorp, Inc. (a)
4 - Form of Certificate for Common Stock
5 - Opinion of Breyer & Aguggia regarding legality of securities registered (a)
8.1 - Form of Federal Tax Opinion of Breyer & Aguggia (a)
8.2 - Form of State Tax Opinion of Moore, Horton & Carlson, P.C.
8.3 - Opinion of RP Financial, LC. as to the value of subscription rights (a)
10.1 - Proposed Form of Employment Agreement with Certain Executive Officers (a)
10.2 - Proposed Form of Stock Option Plan (a)
10.3 - Proposed Form of Management Recognition Plan and Trust Agreement (a)
10.4 - Proposed Form of Employee Stock Ownership Plan (a)
10.5 - Fulton Savings and Loan Association Retirement Trust
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
21 - Subsidiaries of Fulton Bancorp, Inc. (a)
23.1 - Consent of Moore, Horton & Carlson, P.C.
23.2 - Consent of Breyer & Aguggia (contained in opinion included as
Exhibit 5) (a)
23.3 - Consent of Breyer & Aguggia as to its Federal Tax Opinion (a)
23.4 - Consent of RP Financial, LC. (a)
24 - Power of Attorney (a)
27 - Financial Data Schedule (a)
99.1 - Order Form
99.2 - Solicitation and Marketing Materials (a)
99.3 - Appraisal Agreement with RP Financial, LC. (a)
99.4 - Appraisal Report of RP Financial, LC.
99.5 - Proxy Statement for Special Meeting of Members of Fulton Savings
Bank, FSB (a)
99.6 - Prospectus Supplement for Fulton Savings Bank Retirement Trust (a)
</TABLE>
- ---------------
(a) Previously filed.
Financial Statements and Schedules
Fulton Savings Bank, FSB and Subsidiary
<TABLE>
<S> <C>
Pages
Independent Auditors' Report............................................... F-1
Consolidated Statements of Financial Condition as of
April 30, 1996 and 1995................................................... F-2
Consolidated Statements of Changes in Equity
for the Years Ended April 30, 1996, 1995 and 1994......................... F-3
Consolidated Statements of Income
for the Years Ended April 30, 1996, 1995 and 1994......................... 19
Consolidated Statements of Cash Flows
for the Years Ended April 30, 1996, 1995 and 1994......................... F-4
Notes to Consolidated Financial Statements................................. F-6
</TABLE>
II-4
<PAGE>
All schedules are omitted because the required information is either not
applicable or is included in the financial statements or related notes.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended ("Securities Act");
(ii) To 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 deviation 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) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") (and, where
applicable, each filing of any employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act, and is therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of the
Registrant 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 Registrant 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 Securities Act and will be governed by
the final adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Amended Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Fulton, Missouri on
the 28th day of August, 1996.
FULTON BANCORP, INC.
By: /s/ Kermit D. Gohring
------------------------------------------
Kermit D. Gohring
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signatures Title Date
- ---------- ----- ----
/s/ Kermit D. Gohring President, Chief Executive Officer August 28, 1996
- ------------------------ and Director
Kermit D. Gohring (Principal Executive Officer)
/s/ Richard W. Gohring Vice President and Director August 28, 1996
- ------------------------ (Principal Financial Officer)
Richard W. Gohring
/s/ Bonnie K. Smith Secretary-Treasurer and Director August 28, 1996
- ------------------------ (Principal Accounting Officer)
Bonnie K. Smith
/s/ Clifford E. Hamilton* Director August 28, 1996
- ------------------------
Clifford E. Hamilton
<PAGE>
/s/ Billy Conner* Director August 28, 1996
- -------------------------
Billy Conner
/s/ David West* Director August 28, 1996
- -------------------------
David West
/s/ Dennis Adrian* Director August 28, 1996
- ------------------------
Dennis Adrian
- -------------------
*By power of attorney dated July 19, 1996
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<S> <C>
1.1 -- Form of proposed Agency Agreement among Fulton Bancorp, Inc., Fulton
Savings Bank, FSB and Trident Securities, Inc.
1.2 -- Engagement Letter between Fulton Savings Bank, FSB and Trident
Securities, Inc. (a)
2 -- Plan of Conversion of Fulton Savings Bank, FSB (attached as an
exhibit to the Proxy Statement included herein as Exhibit 99.5) (a)
3.1 -- Certificate of Incorporation of Fulton Bancorp, Inc. (a)
3.2 -- Bylaws of Fulton Bancorp, Inc. (a)
4 -- Form of Certificate for Common Stock
5 -- Opinion of Breyer & Aguggia regarding legality of securities
registered (a)
8.1 -- Form of Federal Tax Opinion of Breyer & Aguggia (a)
8.2 -- Form of State Tax Opinion of Moore, Horton & Carlson, P.C.
8.3 -- Opinion of RP Financial, LC. as to the value of subscription
rights (a)
10.1 -- Proposed Form of Employment Agreement with Certain Executive
Officers (a)
10.2 -- Proposed Form of Stock Option Plan (a)
10.3 -- Proposed Form of Management Recognition Plan (a)
10.4 -- Proposed Form of Employee Stock Ownership Plan (a)
10.5 -- Fulton Savings and Loan Association Retirement Trust
21 -- Subsidiaries of Fulton Bancorp, Inc. (a)
23.1 -- Consent of Moore, Horton & Carlson, P.C.
23.2 -- Consent of Breyer & Aguggia (contained in opinion included as
Exhibit 5) (a)
23.3 -- Consent of Breyer & Aguggia as to its Federal Tax Opinion (a)
23.4 -- Consent of RP Financial, LC. (a)
24 -- Power of Attorney (a)
27 -- Financial Data Schedule (a)
99.1 -- Order Form
99.2 -- Solicitation and Marketing Materials (a)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
99.3 -- Appraisal Agreement with RP Financial, LC. (a)
99.4 -- Appraisal Report of RP Financial, LC.
99.5 -- Proxy Statement for Special Meeting of Members of Fulton Savings
Bank, FSB (a)
99.6 -- Prospectus Supplement for Fulton Savings Bank Retirement Trust (a)
</TABLE>
- -------------------
(a) Previously filed.
<PAGE>
FULTON BANCORP, INC.
1,105,000 to 1,495,000 Shares
Common Stock
($.01 Par Value)
$10.00 Per Share
SALES AGENCY AGREEMENT
----------------------
Trident Securities, Inc.
4601 Six Forks Road, Suite 400
Raleigh, North Carolina 27609
Dear Sirs:
Fulton Bancorp, Inc., a Delaware corporation (the "Company"), and Fulton
Savings Bank, FSB, a federally chartered and insured mutual savings bank (the
"Bank"), hereby confirm, as of ___________, 1996, their respective agreements
with Trident Securities, Inc. ("Trident"), a broker-dealer registered with the
Securities and Exchange Commission ("Commission") and a member of the National
Association of Securities Dealers, Inc. ("NASD"), as follows:
1. Introductory. The Bank intends to convert from a federally chartered
------------
mutual savings bank to a federally chartered stock savings bank, as a wholly
owned subsidiary of the Company (the "Conversion"), pursuant to a plan of
conversion adopted on January 9, 1996 (the "Plan"). In accordance with the
Plan, the Company is offering shares of its common stock, par value $.01 per
share (the "Shares"), pursuant to nontransferable subscription rights in a
subscription offering (the "Subscription Offering") to certain depositors and
borrowers of the Bank and to the Bank's Employee Stock Ownership Plan (the
"ESOP"). The Company may offer Shares not subscribed for in the Subscription
Offering in a direct community offering to certain members of the general public
(the "Direct Community Offering") and may offer such Shares through selected
dealers in a syndicated Community Offering (the "Syndicated Community
Offering"). In the Direct Community Offering, preference will be given to
natural persons and trusts of natural persons who are permanent residents of
Boone or Callaway Counties of Missouri. In the Subscription, Direct Community,
and Syndicated Community Offerings (the "Offerings"), the Company is offering up
to 1,495,000 Shares, as contemplated by Title 12 of the Code of Federal
Regulations, Part 563b. No person or entity, other than the ESOP, may purchase
more than 15,000 Shares, and no person or entity, together with associates of
and persons acting in concert with such person or entity, may purchase in the
aggregate more than 20,000 shares.
The Company and the Bank have been advised by Trident that Trident will use
its best efforts in assisting the Company and the Bank with the sale of the
Shares in the Offerings including, if necessary, the Syndicated Community
Offering. Prior to the execution of this
1
<PAGE>
Agreement, the Company has delivered to Trident the prospectus dated
_______________, 1996, (as hereinafter defined) and all supplements thereto to
be used in the Offerings. Such prospectus contains information with respect to
the Company, the Bank and the Shares.
2. Representations and Warranties. The Company and the Bank, jointly and
------------------------------
severally, represent and warrant to Trident that:
(a) The Company has filed with the Commission a registration statement,
including exhibits and amendments thereto, on Form S-l (No. 333-8461), including
the prospectus, for the registration of the Shares under the Securities Act of
1933, as amended (the "Act"); and such registration statement has become
effective under the Act and no stop order has been issued with respect thereto
and no proceedings therefor have been initiated or, to the Company's best
knowledge, threatened by the Commission (provided that for this purpose the
Company shall not regard any such proceeding as "threatened" unless the
Commission has manifested to the management of the Company or counsel a present
intention to initiate such proceeding). Except as the context may otherwise
require, such registration statement, as amended or supplemented, on file with
the Commission at the time such registration statement became effective,
including the prospectus, financial statements, schedules, exhibits and all
other documents filed as part thereof, as amended and supplemented, is
hereinafter called the "Registration Statement," and the prospectus, as amended
or supplemented, on file with the Commission at the time the Registration
Statement became effective, is hereinafter called the "Prospectus," except that,
if the prospectus filed by the Company with the Commission pursuant to Rule
424(b) of the general rules and regulations of the Commission under the Act
together with the enforceable published policies and actions of the Commission
thereunder, (the "SEC Regulations") differs from the form of prospectus on file
at the time the Registration Statement became effective, the term "Prospectus"
shall refer to the Rule 424(b) prospectus from and after the time it is filed
with or mailed for filing to the Commission and shall include any amendments or
supplements thereto from and after their dates of effectiveness or use,
respectively. If any Shares remain unsubscribed following completion of the
Offerings, the Company (i) will promptly file with the Commission a post-
effective amendment to such Registration Statement relating to the results of
the Offerings, any additional information with respect to the proposed plan of
distribution and any revised pricing information, or (ii) if no such post-
effective amendment is required, will file with, or mail for filing to, the
Commission a prospectus or prospectus supplement containing information relating
to the results of the Offerings and pricing information pursuant to Rule 424(c)
of the SEC Regulations, in either case in a form reasonably acceptable to the
Company and Trident.
(b) The Bank has filed an Application for Approval of Conversion on Form
AC, including exhibits (as amended or supplemented, the "Form AC" and, together
with the Form H-(e)1-S referred to below, the "Conversion Application") with the
Office of Thrift Supervision (the "Office") under the Home Owners' Loan Act, as
amended (the "HOLA") and the rules and regulations, including published policies
and actions, of the Office thereunder (the "OTS Regulations"), which have been
approved by the Office; and the Prospectus and the proxy statement for the
solicitation of proxies from members for the special meeting to approve the Plan
(the "Proxy Statement") included as part of the Form AC have been approved for
use by
2
<PAGE>
the Office. No order has been issued by the Office preventing or suspending the
use of the Prospectus or the Proxy Statement; and no action by or before the
Office revoking such approvals is pending or, to the Bank's best knowledge,
threatened (provided that for this purpose the Bank shall not regard any action
as "threatened" unless the OTS has manifested to the management of the Bank or
to its counsel the present intention to initiate such action). The Company has
filed with the Office the Company's application on Form H(e)1-S promulgated
under the HOLA and the OTS Regulations and has received approval of its
acquisition of the Bank from the Office.
(c) At the date of the Prospectus and at all times subsequent thereto,
through and including the Closing Date, (i) the Registration Statement and the
Prospectus (as amended or supplemented, if amended or supplemented) complied
with the Act and the SEC Regulations, (ii) the Registration Statement (as
amended or supplemented, if amended or supplemented) did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(iii) the Prospectus (as amended or supplemented, if amended or supplemented)
did not contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Representations and warranties in this subsection shall not apply
to statements or omissions made in reliance upon and in conformity with written
information furnished to the Company or the Bank relating to Trident by or on
behalf of Trident expressly for use in the Registration Statement or Prospectus.
(d) The Company has been duly organized as a Delaware corporation, and the
Bank has been duly organized as a mutual savings bank under the laws of the
United States, and each of them is validly existing and in good standing under
the laws of the jurisdiction of its organization with full power and authority
to own its property and conduct its business as described in the Registration
Statement and Prospectus. The Bank is a member in good standing of the Federal
Home Loan Bank of Des Moines. The deposit accounts of the Bank are insured by
the Savings Association Insurance Fund ("SAIF") administered by the Federal
Deposit Insurance Corporation ("FDIC") up to the applicable limits. Each of the
Company and the Bank is not required to be qualified to do business as a foreign
corporation in any jurisdiction where non-qualification would have a material
adverse effect on the Company and the Bank, taken as a whole. The Bank does not
directly own equity securities of, or an equity interest in, any business
enterprise except Multi-Purpose Service Agency, Inc., its wholly owned
subsidiary (the "Subsidiary"), and as described in the Prospectus. Upon
amendment of the Bank's charter and bylaws, as provided in the rules and
regulations of the Office, and completion of the sale by the Company of the
Shares as contemplated by the Prospectus, (i) the Bank will be converted
pursuant to the Plan to a federally chartered capital stock savings bank with
full power and authority to own its property and conduct its business as
described in the Prospectus, (ii) all of the authorized and outstanding capital
stock of the converted Bank will be owned of record and beneficially by the
Company, and (iii) the Company will have no direct subsidiaries other than the
converted Bank.
3
<PAGE>
(e) Each of the Company, the Bank and the Subsidiary has good, marketable
and insurable title to all assets material to its business and to those assets
described in the Prospectus as owned by it, free and clear of all material
liens, charges, encumbrances or restrictions, except for liens for taxes not yet
due, except as described in the Prospectus and except as could not in the
aggregate have a material adverse effect upon the operations or financial
condition of the Company, the Bank and the Subsidiary, taken as a whole; and all
of the leases and subleases material to the operations or financial condition of
each of the Company, the Bank and the Subsidiary, under which it holds
properties, including those described in the Prospectus, are in full force and
effect as described therein.
(f) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized by
all necessary actions on the part of each of the Company and the Bank, and this
Agreement has been validly executed and delivered and is a valid and binding
obligation of each of the Company and the Bank, enforceable in accordance with
its terms (except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of creditors of
savings and loan holding companies the accounts of whose subsidiaries are
insured by the FDIC or by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law, and except to
the extent that the provisions of Sections 8 and 9 hereof may be unenforceable
as against public policy or Section 23A of the Federal Reserve Act ("Section
23A")).
(g) Other than as disclosed in the Prospectus, there is no litigation or
governmental proceeding pending or, to the best knowledge of the Company or the
Bank, threatened against or involving the Company, the Bank, the Subsidiary, or
any of their respective assets, which individually or in the aggregate would
reasonably be expected to have a material adverse effect on the financial
condition, results of operations and business of the Company and the Bank, taken
as a whole.
(h) The Company and the Bank have received the opinion of Breyer & Aguggia,
Washington, D.C., with respect to federal tax consequences of the Conversion,
and the opinion of Moore, Horton & Carlson, P.C., Mexico, Missouri, with respect
to Missouri tax consequences of the Conversion, to the effect, respectively,
that the Conversion will constitute a tax-free reorganization under the Internal
Revenue Code of 1986, as amended, and will not be a taxable transaction for the
Bank or the Company under the laws of Missouri, and the facts relied upon in
such opinions are accurate and complete.
(i) Each of the Company and the Bank has all such corporate power,
authority, authorizations, approvals and orders as may be required to enter into
this Agreement and to carry out the provisions and conditions hereof, subject to
the satisfaction of certain conditions required by the Office in connection with
its approvals of the Form AC and the Application H-(e)1-S, and, in the case of
the Company, except as may be required under the securities, or "blue sky," laws
of various jurisdictions. The Company, as of the Closing Date, will have the
power, authority, authorizations, approvals and orders to issue and sell the
Shares to be sold by the Company as
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<PAGE>
provided herein, and, the Bank, as of the Closing Date, will have such approvals
and orders to issue and sell the shares of its Common Stock to be sold to the
Company as provided in the Plan, subject to the issuance of the amended charter
in the form required for federally chartered stock savings banks (the "Stock
Charter"), the form of which Stock Charter has been approved by the Office.
(j) Neither the Company, the Bank nor the Subsidiary is in violation of any
rule or regulation of the Office or the FDIC that could reasonably be expected
to result in any enforcement action against the Company, the Bank, the
Subsidiary or their officers or directors that might have a material adverse
effect on the financial condition, operations or businesses of the Company, the
Bank and the Subsidiary, taken as a whole.
(k) The consolidated financial statements and any related notes or
schedules which are included in the Registration Statement and the Prospectus
fairly present the consolidated financial condition, income, retained earnings
and cash flows of the Bank at the respective dates thereof and for the
respective periods covered thereby and comply as to form with the applicable
accounting requirements of the SEC Regulations and the applicable accounting
regulations of the Office. Such financial statements have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved, except as set forth therein, and such financial
statements are consistent with financial statements and other reports filed by
the Bank with supervisory and regulatory authorities except as such generally
accepted accounting principles may otherwise require. The tables in the
Prospectus accurately present the information purported to be shown thereby at
the respective dates thereof and for the respective periods therein.
(l) There has been no material change in the financial condition, results
of operations or business of the Company, the Bank and the Subsidiary, taken as
a whole, since the latest date as of which such condition is set forth in the
Prospectus, except as set forth therein; and the capitalization, assets,
properties and business of each of the Company, the Bank and the Subsidiary
conform to the descriptions thereof contained in the Prospectus. None of the
Company, the Bank or the Subsidiary have any material liabilities of any kind,
contingent or otherwise, except as set forth in the Prospectus.
(m) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default on the part of the Company,
the Bank or the Subsidiary in the due performance and observance of any
obligation to be performed by it, any agreement or any term, covenant or
condition of any agreement, including any bond, debenture note or any other
evidence of indebtedness which is material to the financial condition, results
of operations or business of the Company, the Bank or the Subsidiary, taken as a
whole; said agreements are in full force and effect, and no other party to any
such agreement which is material to the Company, the Bank and the Subsidiary,
taken as a whole, has instituted or, to the best knowledge of the Company or the
Bank, threatened any action or proceeding wherein the Company or the Bank or the
Subsidiary have been, or would be alleged to be, in default thereunder.
5
<PAGE>
(n) Neither the Company, the Bank nor the Subsidiary is in violation of its
respective certificate or articles of incorporation, charter or bylaws. The
execution and delivery hereof, the fulfillment of the terms set forth herein and
the consummation of the actions contemplated hereby shall not (i) violate or
conflict with the respective certificate of incorporation, charter or bylaws of
the Company, the Bank or the Subsidiary or (ii) in any material respect violate,
conflict with or constitute a breach of, or default (or an event which, with
notice or lapse of time, or both, would constitute a material default) under,
any material agreement, indenture or other instrument to which any of the
Company, the Bank or the Subsidiary is a party, or under any governmental
license or permit or any enforceable published law, administrative regulation or
authorization, approval, order, court decree, injunction or order, subject to
the satisfaction of certain conditions imposed by the Office in connection with
its approval of the Form AC and the Application H-(e)1-S, which violation,
conflict, breach or default would have a material adverse effect on the
financial condition, operations or business of the Company, the Bank and the
Subsidiary, taken as a whole.
(o) Subsequent to the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise may be
indicated or contemplated therein, neither the Company, the Bank nor the
Subsidiary has issued any securities which will remain issued at the Closing
Date or incurred any liability or obligation, direct or contingent, or borrowed
money, except borrowings in the ordinary course of business, or entered into any
other transaction not in the ordinary course of business and consistent with
prior practices which is material in light of the business of the Company, the
Bank and the Subsidiary, taken as a whole.
(p) Upon consummation of the Conversion, the authorized, issued and
outstanding equity capital of the Company shall be within the range set forth in
the Prospectus under the caption "Capitalization," and no capital stock of the
Company shall be outstanding immediately prior to the Closing Date; the issuance
and the sale of the Shares have been duly authorized by all necessary action of
the Company and approved by the Office and, when issued in accordance with the
terms of the Plan and paid for, shall be validly issued, fully paid and
nonassessable and shall conform to the description thereof contained in the
Prospectus; the issuance of the Shares is not subject to preemptive rights,
except as set forth in the Prospectus; and good title to the Shares will be
transferred by the Company upon issuance thereof against payment therefor, free
and clear of all claims, encumbrances, security interests and liens against the
Company whatsoever. The certificates representing the Shares will conform in
all material respects with the requirements of Delaware laws and OTS
Regulations. The issuance and sale of the capital stock of the Bank to the
Company has been duly authorized by all necessary action of the Bank and the
Company and appropriate regulatory authorities (subject to the satisfaction of
various conditions imposed by the Office in connection with its approval of the
Conversion Application), and such capital stock, when issued in accordance with
the terms of the Plan, will be fully paid and nonassessable and will conform in
all material respects to the description thereof contained in the Proxy
Statement.
(q) No approval of any regulatory or supervisory or other public authority
is required in connection with the execution and delivery of this agreement or
the issuance of the Shares, except for the declaration of effectiveness of any
required post-effective amendment by
6
<PAGE>
the Commission and approval thereof by the Office and approval of the Company's
application on Form H-(e)1-S by the Office, the issuance of the Stock Charter by
the Office and as may be required under the securities laws of various
jurisdictions.
(r) All contracts and other documents required to be filed as exhibits to
the Registration Statement or the Conversion Application have been so filed with
the Commission and/or the Office, as the case may be.
(s) Moore, Horton & Carlson, P.C., which has audited the consolidated
statement of condition of the Bank at April 30, 1996 and 1995 and the
consolidated statements of income, equity, and cash flows for each of the three
years in the period ended April 30, 1996, all of which are included in the
Prospectus, are independent public accountants within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants
and Title 12 of the Code of Federal Regulations, Section 571.2(c)(3).
(t) For the past five years, the Company and the Bank have timely filed all
required federal, state and local franchise tax returns, and no deficiency has
been asserted with respect to such returns by any taxing authorities, and the
Company and the Bank have paid all taxes that have become due and, to the best
of their knowledge, have made adequate reserves for similar future tax
liabilities, except where any failure to make such filings, payments and
reserves, or the assertion of such a deficiency, would not have a material
adverse effect on the condition of the Company, the Bank and the Subsidiary,
taken as a whole.
(u) To the knowledge of the Company and the Bank, all of the loans
represented as assets of the Bank on the most recent financial statements of the
Bank included in the Prospectus meet or are exempt from all requirements of
federal, state or local law pertaining to lending, including, without
limitation, truth in lending (including the requirements of Regulation Z and 12
C.F.R. Part 226 and Section 563.99), real estate settlement procedures, consumer
credit protection, equal credit opportunity and all disclosure laws applicable
to such loans, except for violations which, if asserted, would not have a
material adverse effect on the Company, the Bank and the Subsidiary, taken as a
whole.
(v) The records of account holders, depositors, borrowers and other members
of the Bank delivered to Trident by the Bank or its agent for use during the
Conversion have been prepared or reviewed by, or for, the Bank and, to the best
knowledge of the Company and the Bank, are reliable and accurate.
(w) None of the Company, the Bank, the Subsidiary, or, to the best
knowledge of the Company and the Bank, the employees of the Company, the Bank or
the Subsidiary has made any payment of funds of the Company, the Bank or the
Subsidiary prohibited by law, and no funds of the Company, the Bank or the
Subsidiary have been set aside to be used for any payment prohibited by law.
7
<PAGE>
(x) To the best knowledge of the Company or the Bank, the Company, the Bank
and the Subsidiary are in compliance with all laws, rules and regulations
relating to the discharge, storage, handling or disposal of hazardous or toxic
substances, pollutants or contaminants, and neither the Company, the Bank nor
the Subsidiary believes that the Company, the Bank or the Subsidiary is subject
to liability under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, or any similar law, except for violations
which, if asserted, would not have a material adverse effect on the Company and
the Bank, taken as a whole. There are no actions, suits, regulatory
investigations or other proceedings pending or, to the best knowledge of the
Company or the Bank, threatened against the Company, the Bank or the Subsidiary
relating to the discharge, storage, handling or disposal of hazardous or toxic
substances, pollutants or contaminants. To the best knowledge of the Company or
the Bank, no disposal, release or discharge of hazardous or toxic substances,
pollutants or contaminants; including petroleum and gas products, as any of such
terms may be defined under federal, state or local law, has been caused by the
Company, the Bank or the Subsidiary or has occurred on, in, at or about any of
the facilities or properties of the Company, the Bank or the Subsidiary, except
which disposal, release or discharge, if discovered, would not have a material
adverse effect on the Company, the Bank and the Subsidiary, taken as a whole.
(y) At the Closing Date, the Company and the Bank will have completed the
conditions precedent to, and shall have conducted the Conversion in all material
respects in accordance with, the Plan, the OTS Regulations and all other
applicable laws, regulations, decisions and orders; and, all terms, conditions,
requirements and provisions relating to the Conversion imposed by the Office
have been or, with respect to any future Office conditions, will be complied
with by the Company and the Bank or appropriate waivers have been or will be
obtained.
Trident represents and warrants to the Company and the Bank that:
(i) Trident is registered as a broker-dealer with the Commission and a
member of the NASD, and is in good standing with the Commission and
the NASD.
(ii) Trident is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, with full corporate
power and authority to provide the services to be furnished to the
Company and the Bank hereunder.
(iii) The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Trident, and this
Agreement is a legal, valid and binding obligation of Trident,
enforceable in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally or the rights of
creditors of registered broker-dealers accounts whose rights may
be protected by the Securities Investor Protection Corporation or
by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law,
and except to the extent that the
8
<PAGE>
provisions of Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A).
(iv) Each of Trident and its employees, and to Trident's knowledge, its
agents and representatives who shall perform any of the services
required hereunder to be performed by Trident shall be duly
authorized and shall have all licenses, approvals and permits
necessary to perform such services, and Trident is a registered
selling agent in the jurisdictions where Common Stock will be sold
and will remain registered in such jurisdictions in which the
Company is relying on such registration for the sale of the Shares,
until the Conversion is consummated or terminated.
(v) The execution and delivery of this Agreement by Trident, the
fulfillment of the terms set forth herein and the consummation of the
transactions contemplated hereby shall not violate or conflict with
the corporate charter or bylaws of Trident or violate, conflict with
or constitute a breach of, or default (or an event which, with notice
or lapse of time, or both, would constitute default) under, any
material agreement, indenture or other instrument by which Trident is
bound or under any governmental license or permit or any law,
administrative regulation, authorization, approval or order or court
decree, injunction or order.
(vi) Any funds received by Trident to purchase the Shares will be handled
in accordance with Rule 15c2-4 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(vii) There is not now pending or, to Trident's knowledge, threatened
against Trident any action or proceeding before the Commission, the
NASD, any state securities commission or any state or federal court
concerning Trident's activities as a broker-dealer (provided that
for this purpose, Trident shall not regard any such action as
"threatened" unless such Commission, NASD, state securities
commission or such court has manifested to the management of
Trident or to its counsel the present intention to initiate such
action or proceeding).
3. Employment of Trident: Sale and Delivery of the Shares. On the basis
-------------------------------------------------------
of the representations and warranties herein contained, but subject to the terms
and conditions herein set forth, the Company and the Bank hereby employ Trident
as their agent to utilize its best efforts in assisting the Company with the
Company's sale of the Shares in the Offerings. The employment of Trident
hereunder shall terminate (a) forty-five (45) days after the Offerings close,
unless the Company and the Bank, with the approval of the Office, are permitted
to extend such period of time, or (b) upon consummation of the Conversion,
whichever date shall first occur.
In the event the Company is unable to sell a minimum of 1,105,000 Shares
(or such lesser amount as the Office may permit) within the period herein
provided, this Agreement shall terminate, and the Company and the Bank shall
refund promptly to any persons who have
9
<PAGE>
subscribed for any of the Shares, the full amount which it may have received
from them, together with interest as provided in the Prospectus, and no party to
this Agreement shall have any obligation to the other party hereunder, except as
set forth in Sections 6, 8(a) and 9 hereof. Appropriate arrangements for
placing the funds received from subscriptions for Shares in special interest-
bearing accounts with the Bank until all Shares are sold and paid for have been
made by the Company and the Bank prior to the commencement of the Subscription
Offering, with provision for prompt refund to the purchasers as set forth above,
or for delivery to the Company if 1,495,000 or more Shares are sold.
If all conditions precedent to the consummation of the Conversion are
satisfied, including the sale of all Shares required by the Plan to be sold, the
Company agrees to issue or have issued such Shares and to release for delivery
certificates to subscribers thereof for such Shares on the Closing Date against
payment to the Company by any means authorized pursuant to the Prospectus, at
the principal office of the Company at 410 Market Street, Fulton, Missouri
65251, or at such other place as shall be agreed upon between the parties
hereto. The date upon which the Company shall release for delivery all of the
Shares sold and upon which Trident is paid the compensation due hereunder is
herein called the "Closing Date."
Trident agrees either (a) upon receipt of an executed order form of a
subscriber, to forward the offering price of the Shares ordered, on or before
twelve noon on the next business day following receipt or execution of an order
form by Trident, to the Bank for deposit in a segregated account or (b) to
solicit indications of interest, in which event (i) Trident will subsequently
contact any potential subscriber indicating interest to confirm the interest and
give instructions to execute and return an order form or to receive
authorization to execute the order form on the subscriber's behalf, (ii) Trident
will mail acknowledgements of receipt of orders to each subscriber that confirms
interest, on the business day following such confirmation, (iii) Trident will
debit accounts of such subscribers on the third business day ("debit date")
following receipt of the confirmation referred to in (i), and (iv) Trident will
forward completed order forms, together with such funds, to the Bank, on or
before twelve noon on the next business day following the debit date, for
deposit in a segregated account, Trident acknowledges that if the procedure in
(b) is adopted, subscribers' funds are not required to be in their accounts
until the debit date.
In addition to the expenses specified in Section 6 hereof, Trident shall
receive the following compensation for its services hereunder:
(a) (i) a management fee of one hundred and fifty-seven thousand five
hundred dollars ($157,500) and (ii) for stock sold by other NASD member firms
under selected dealer's agreements, a commission to be agreed upon by Trident
and the Company to reflect market requirements at the time of the stock
allocation in a Syndicated Community Offering. All such fees are to be payable
via wire transfer to Trident on the Closing Date.
(b) Trident shall be reimbursed for allocable expenses, incurred by
it, including legal fees, whether or not the Offerings are successfully
completed; provided, that out-of-pocket expenses will not exceed $10,000 and
legal fees shall not exceed $28,500, and provided further
10
<PAGE>
that neither the Company nor the Bank shall pay or reimburse Trident for any of
the foregoing expenses accrued after Trident shall have notified the Company or
the Bank of its election to terminate this Agreement pursuant to Section 11
hereof or after such time as the Company or the Bank shall have given notice in
accordance with Section 12 hereof that Trident is in breach of this Agreement.
Full payment to defray Trident's reimbursable expenses shall be made via wire
transfer on the Closing Date or, if the Conversion is not completed and is
terminated for any reason, within ten (10) business days of receipt by the
Company of a written request from Trident for reimbursement of its expenses.
Trident acknowledges hereby the receipt of a $10,000 advance payment of
reimbursable expenses from the Bank which shall be credited against the total
reimbursement due Trident hereunder.
The Company shall pay any stock issue and transfer taxes which may be
payable with respect to the sale of the Shares. The Company and the Bank shall
also pay all other expenses of the Conversion incurred by them or on their prior
approval, including but not limited to Trident's attorneys' fees, NASD filing
fees, filing and registration fees, fees of the Company's and Bank's attorneys,
fees relating to any required State securities laws research and 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 Conversion.
4. Offering. Subject to the provisions of Section 7 hereof, Trident is
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assisting the Company on a best efforts basis in offering a minimum of 1,105,000
shares and a maximum of up to 1,495,000 Shares (except as the Office may permit
to be decreased or increased) in the Subscription Offering and, if necessary,
the Community and Syndicated Community Offerings. The Shares are to be offered
to the public at the price set forth on the cover page of the Prospectus and the
first page of this Agreement.
5. Further Agreements. The Company and the Bank, jointly and severally,
------------------
covenant and agree that:
(a) The Company shall deliver to Trident, from time to time, such
number of copies of the Prospectus as Trident reasonably may request. The
Company authorizes Trident to use the Prospectus in any lawful manner in
connection with the offer and sale of the Shares.
(b) The Company will notify Trident or its counsel immediately upon
discovery (i) when any post-effective amendment to the Registration Statement
becomes effective or any supplement to the Prospectus has been filed, (ii) of
the issuance by the Commission of any stop order relating to the Registration
Statement or of the initiation or the threat of any proceedings for that
purpose, (iii) of the receipt of any notice with respect to the suspension of
the qualification of the Shares for offering or sale in any jurisdiction, and
(iv) of the receipt of any comments from the staff of the Commission relating to
the Registration Statement. If the Commission enters a stop order relating to
the Registration Statement at any time, the Company will make every reasonable
effort to obtain the lifting of such order at the earliest possible moment.
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<PAGE>
(c) During the time when a prospectus is required to be delivered
under the Act, the Company will comply so far as it is able with all
requirements imposed upon it by the Act, as now in effect and hereafter amended,
and by the SEC Regulations, as from time to time in force, so far as necessary
to permit the continuance of offers and sales of or dealings in the Shares in
accordance with the provisions hereof and the Prospectus. If, during the period
when the Prospectus is required to be delivered in connection with the offer and
sale of the Shares, any event relating to or affecting the Company and the Bank,
taken as a whole, shall occur as a result of which it is necessary, in the
opinion of counsel for Trident, with the concurrence of counsel to the Company,
to amend or supplement the Prospectus in order to make the Prospectus not false
or misleading in light of the circumstances existing at the time it is delivered
to a purchaser of the Shares, the Company, forthwith, shall prepare and furnish
to Trident a reasonable number of copies of an amendment or amendments, or of a
supplement or supplements, to the Prospectus (in form and substance satisfactory
to Trident) which shall amend or supplement the Prospectus, so that, as amended
or supplemented, the Prospectus shall not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances existing at the time the
Prospectus is delivered to a purchaser of the Shares, not misleading. The
Company will not file or use any amendment or supplement to the Registration
Statement or the Prospectus of which Trident has not first been furnished a copy
or to which Trident shall reasonably object after having been furnished such
copy. For the purposes of this subsection, the Company and the Bank shall
furnish such information with respect to themselves as Trident from time to time
may reasonably request.
(d) The Company and the Bank have taken, or will take, all reasonably
necessary action and furnish, to whomever Trident may reasonably direct, such
information as may be required to qualify or register the Shares for offer and
sale by the Company under the securities or blue sky laws of such jurisdictions
as Trident and either the Company or its counsel may agree upon; provided,
however, that the Company shall not be obligated to qualify as a foreign
corporation to do business under the laws of any such jurisdiction or to
register its directors or officers as brokers, dealers, salesmen or agents in
any jurisdiction. In each jurisdiction where such qualification or registration
shall be effected, the Company, unless Trident agrees that such action is not
necessary or advisable in connection with the distribution of the Shares, shall
file and make such statements or reports as are, or reasonably may be, required
by the laws of such jurisdiction .
(e) Appropriate entries will be made in the financial records of the
Bank sufficient to establish a liquidation account for the benefit of eligible
account holders as of December 31, 1994 and supplemental eligible account
holders as of June 30, 1996, in accordance with the requirements of the Office.
(f) The Company will file a registration statement for the Shares
under Section 12(g) of the Exchange Act prior to completion of the stock
offering pursuant to the Plan and shall request that such registration statement
be effective upon completion of the Conversion. The Company shall maintain the
effectiveness of such registration for a minimum period of three years or for
such shorter period as may be required by applicable law.
12
<PAGE>
(g) The Company will make generally available to its security holders
as soon as practicable, but not later than 90 days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 of the SEC Regulations) covering a twelve-month period beginning not
later than the first day of the Company's fiscal quarter next following the
effective date (as defined in said Rule 158) of the Registration Statement.
(h) For a period of three (3) years from the date of this Agreement
(unless the Shares shall have been deregistered under the Exchange Act), the
Company will furnish to Trident, as soon as publicly available after the end of
each fiscal year, a copy of its annual report to shareholders for such year; and
the Company will furnish to Trident (i) as soon as publicly available, a copy of
each report or definitive proxy statement of the Company filed with the
Commission under the Exchange Act or mailed to shareholders, and (ii) from time
to time, such other public information concerning the Company as Trident may
reasonably request
(i) The Company shall use the net proceeds from the sale of the Shares
consistent with the manner set forth in the Prospectus.
(j) The Company shall not deliver the Shares until each and every
condition set forth in Section 7 hereof has been satisfied, unless such
condition is waived in writing by Trident.
(k) The Company shall advise Trident, if necessary, as to the
allocation of deposits, in the case of eligible account holders, and votes, in
the case of other members, and of the Shares in the event of an oversubscription
and shall provide Trident final instructions as to the allocation of the Shares
("Allocation Instructions") in such event, and such information shall be
accurate and reliable.
(l) The Company and the Bank will take such actions and furnish such
information as are reasonably requested by Trident in order for Trident to
ensure compliance with the NASD's "Interpretation Relating to Free-Riding and
Withholding."
6. Payment of Expenses. Whether or not the Conversion is consummated,
--------------------
the Company and the Bank shall pay or reimburse Trident for (a) all filing fees
paid or incurred by Trident in connection with all filings with the NASD with
respect to the Offerings and, (b) in addition, if the Company is unable to sell
a minimum of 1,105,000 Shares, or such lesser amount as the Office may permit,
or the Conversion is otherwise terminated, the Company and the Bank shall
reimburse Trident for allocable expenses incurred by Trident relating to the
offering of the Shares as provided in Section 3 hereof; provided, however, that
neither the Company nor the Bank shall pay or reimburse Trident for any of the
foregoing expenses accrued after Trident shall have notified the Company or the
Bank of its election to terminate this Agreement pursuant to Section 11 hereof
or after such time as the Company or the Bank shall have given notice in
accordance with Section 12 hereof that Trident is in breach of this Agreement.
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<PAGE>
7. Conditions of Trident's Obligations. Except as may be waived by
------------------------------------
Trident, the obligations of Trident as provided herein shall be subject to the
accuracy of the representations and warranties contained in Section 2 hereof as
of the date hereof and as of the Closing Date, to the performance by the Company
and the Bank of their obligations hereunder and to the following conditions:
(a) At the Closing Date, Trident shall receive the favorable opinions
of Breyer & Aguggia, Washington, D.C., special counsel for the Company and the
Bank, dated the Closing Date, addressed to Trident, in form and substance
reasonably satisfactory to counsel for Trident and to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws
of the State of Delaware and is qualified to do business
as a foreign corporation and is in good standing in the
State of Missouri, which to the knowledge of such counsel
is the only state in which the conduct of its business
requires such qualification; the Bank is validly existing
as a mutual savings bank under the laws of the United
States; each of the Company and the Bank has full power
and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) the Bank is a member of the Federal Home Loan Bank of Des
Moines, and the deposit accounts of the Bank are insured
by the SAIF, up to the applicable limits;
(iii) to the best knowledge of such counsel, the Bank does not
have any direct subsidiaries other than the Subsidiary.
(iv) to the best knowledge of such counsel, there are no
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or
referred to in the Registration Statement or to be filed
as exhibits thereto other than those described or
referred to therein or filed as exhibits thereto;
(v) the Plan complies with, and, to the knowledge of such
counsel, the Conversion of the Bank from a federally
chartered mutual savings bank to a federally chartered
stock savings bank and the creation of the Company as a
holding company for the Bank have been effected in all
material respects in accordance with, the HOLA and the
OTS Regulations or appropriate waivers have been
obtained; to such counsel's knowledge, all of the terms,
conditions, requirements and provisions with respect to
the Plan and the Conversion imposed by the Office,
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except with respect to satisfaction of the post-
Conversion conditions imposed by the Office in its
approvals of the Conversion and the Application H-(e)l-S
and other post conversion requirements have been complied
with by the Company and the Bank and, to the knowledge of
such counsel, no person has sought to obtain regulatory
or judicial review of the final actions of the Office in
approving the Plan;
(vi) The description of the Shares in the Registration
Statement and Prospectus is accurate in all material
respects;
(vii) the issuance and sale of the Shares as set forth in the
Registration Statement and Prospectus have been duly and
validly authorized by all necessary corporate action on
the part of the Company; the Shares, upon receipt of
payment and issuance in accordance with the terms of the
Plan and this Agreement, will be validly issued, fully
paid, nonassessable and, except as disclosed in the
Prospectus, free of statutory preemptive rights, and good
title thereto shall be transferred by the Company free
and clear of all claims, encumbrances, security interests
and liens whatsoever created or suffered to be created by
the Company;
(viii) the certificates for the Shares are in proper form and
comply in all material respects with applicable Delaware
corporate law;
(ix) the issuance and sale of the capital stock of the
converted Bank to the Company have been duly authorized
by all necessary corporate action of the Bank and the
Company and have received the approval of the Office, and
such capital stock, upon receipt of payment and issuance
in accordance with the terms of the Plan, will be validly
issued, fully paid and nonassessable and owned of record
and, to the knowledge of such counsel, beneficially by
the Company;
(x) subject to the satisfaction of the conditions to the
Office's approval of the Conversion Application, no
further approval, authorization, consent or other order
of any public board or body is required in connection
with the execution and delivery of this Agreement, the
issuance of the Shares and the consummation of the
Conversion, except with respect to the issuance to the
Bank of the Stock Charter by the Office and as may be
required under the securities, or blue sky, laws of
various jurisdictions;
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<PAGE>
(xi) the execution and delivery of this Agreement, and the
consummation of the Conversion, have been duly and
validly authorized by all necessary corporate action on
the part of each of the Company and the Bank; and this
Agreement is a legal, valid and binding obligation of
each of the Company and the Bank, enforceable in
accordance with its terms (except as the enforceability
thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization, receivership, conservatorship
or similar laws relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors
of depository institutions whose accounts are insured by
the FDIC or savings and loan holding companies the
accounts of whose subsidiaries are insured by the FDIC or
by general equity principles, regardless of whether such
enforceability is considered in a proceeding in equity or
at law, and except to the extent that the provisions of
Sections 8 and 9 hereof may be unenforceable as against
public policy or pursuant to Section 23A of the Federal
Reserve Act, 12 U.S.C. Section 371c ("Section 23A"), as
to which no opinion need be rendered);
(xii) except as disclosed in the Prospectus, there are no
material legal or governmental proceedings pending or, to
the knowledge of such counsel, threatened against or
involving the assets of the Company or the Bank (provided
that for this purpose such counsel need not regard any
litigation or governmental procedure to be "threatened"
unless the potential litigant or government authority has
manifested to the management of the Company or the Bank,
or to such counsel a present intention to initiate such
litigation or proceeding);
(xiii) the statements in the Prospectus under the captions
"Regulation," "Taxation," "Dividends," "Certain
Restrictions on Acquisition of the Holding Company" and
"Description of Capital Stock of the Holding Company,"
insofar as they are, or refer to, statements of law or
legal conclusions (excluding financial data included
therein, as to which an opinion need not be expressed),
have been prepared or reviewed by such counsel and are
correct in all material respects;
(xiv) the Form AC has been approved by the Office, and the
Prospectus has been authorized for use by the Office; the
Registration Statement and any post-effective amendment
thereto has been declared effective by the Commission;
except as to any necessary qualifications or registration
under the
16
<PAGE>
securities laws of the jurisdictions in which the Shares
were offered, no further approval of any governmental
authority is required for the issuance and sale of the
Shares (subject to the satisfaction of various conditions
subsequent imposed by the Office in connection with its
approval of the Conversion Application), and to the
knowledge of such counsel no proceedings are pending by
or before the Commission or the Office seeking to revoke
or rescind the orders declaring the Registration
Statement effective or approving the Conversion
Application or are contemplated or threatened (provided
that for this purpose such counsel need not regard any
litigation or governmental procedure to be "threatened"
unless the potential litigant or government authority has
manifested to the management of the Company or the Bank,
or to such counsel, a present intention to initiate such
litigation or proceeding);
(xv) the execution and delivery of this Agreement and the
consummation of the Conversion by the Company and the
Bank do not (i) conflict with or violate the certificate
of incorporation or charter or bylaws of the Company or
the Bank (in either mutual or stock form), or, (ii) to
the knowledge of such counsel, constitute a breach of or
default (or an event which, with notice or lapse of time
or both, would constitute a default) under, give rise to
any right of termination, cancellation or acceleration
contained in, or result in the creation or imposition of
any lien, charge or other encumbrance upon any of the
properties or assets of the Company or the Bank pursuant
to any of the terms, provisions or conditions of, any
agreement, contract, indenture, bond, debenture, note,
instrument or obligation filed as an exhibit to the
Registration Statement, or (iii) violate the HOLA or the
OTS Regulations or any court order, writ, injunction or
decree specifically naming the Company or the Bank
(subject to the satisfaction of certain conditions
imposed by the Office in connection with its approval of
the Conversion Application), which breach, default,
encumbrance or violation would have a material adverse
effect on the financial condition, operations or business
of the Company, the Bank and the Subsidiary, taken as a
whole;
(xvi) to the knowledge of such counsel, neither the Company nor
the Bank is in material violation of its certificate or
articles of incorporation, charter or bylaws.
(xvii) the Conversion Application, the Registration Statement
and the Prospectus, in each case as amended, comply as to
form in all
17
<PAGE>
material respects with the requirements of the Act, the
HOLA, the SEC Regulations and the OTS Regulations, as the
case may be (except as to information with respect to
Trident included therein and as to financial statements,
notes to financial statements, financial tables and other
financial and statistical data, including the appraisal
included therein, as to which an opinion need not be
expressed); to such counsel's knowledge, all documents
and exhibits required to be filed with the Conversion
Application and the Registration Statement have been so
filed; the descriptions in the Conversion Application and
the Registration Statement of such documents and exhibits
are accurate in all material respects.
In rendering such opinions, such counsel may rely as to matters of fact on
certificates of officers and directors of the Company and the Bank and
certificates of public officials delivered pursuant hereto. Such counsel may
assume that any agreement is the valid and binding obligation of any parties to
such agreement other than the Company and the Bank. Such opinions may be
governed by, and interpreted in accordance with, the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991), and, as a consequence,
references in such opinions to such counsel's "knowledge" may be limited to
"actual knowledge" as defined in the Accord (or knowledge based on
certificates). Such opinions may be limited to present statutes, regulations
and judicial interpretations and to facts as they presently exist; in rendering
such opinions, such counsel need assume no obligation to revise or supplement
them should the present laws be changed by legislative or regulatory action,
judicial decision or otherwise; and such counsel need express no view, opinion
or belief with respect to whether any proposed or pending legislation, if
enacted, or any regulations or any policy statements issued by any regulatory
agency, whether or not promulgated pursuant to any such legislation, would
affect the validity of the execution and delivery by the Company and the Bank of
this Agreement or the issuance of the Shares.
(b) At the Closing Date, Trident shall receive the favorable opinions
of _______________________________ ,_________ Missouri, local counsel for the
Bank, dated the Closing Date, in form and substance reasonably satisfactory to
counsel for Trident and to the effect that:
(i) to such counsel's knowledge, the Bank is not required to
be qualified as a foreign corporation in any jurisdiction
in which failure to so qualify would have a material
adverse effect upon the financial condition or results of
operations or business of the Bank;
(ii) to the knowledge of such counsel, the Subsidiary is not
in material breach of its charter or bylaws.
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<PAGE>
(iii) the Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws
of the State of Missouri and has full power and authority
to own its properties and conduct its business as
described in the Prospectus and, to the knowledge of such
counsel, the Subsidiary is not required to be qualified
as a foreign corporation in any jurisdiction in which
failure to so qualify would have a material adverse
effect upon the financial condition or results of
operations of the Subsidiary.
(c) At the Closing Date, Trident shall receive the letter of Breyer &
Aguggia, Washington, D.C., special counsel for the Company and the Bank, dated
the Closing Date, addressed to Trident, in form and substance reasonably
satisfactory to counsel for Trident and to the effect that in connection with
the preparation of the Registration Statement and Prospectus, such counsel
participated in conferences with directors, officers, employees and other
representatives of the Company and the Bank and representatives of the
independent public accountants for the Company and the Bank as well as reviewed
various documents and other information deemed relevant and, based on such
conferences and review, nothing has come to such counsel's attention that lead
such counsel to believe that the Registration Statement (except as to
information in respect of Trident contained therein and except as to the
appraisal financial statements, notes to financial statements, financial tables
and other financial and statistical data contained therein or omitted therefrom
with respect to which such counsel need not comment), at the time it became
effective and at the time any post-effective amendment thereto became effective,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, or that the Prospectus (except as to information in respect of
Trident contained therein and except as to the appraisal financial statements,
notes to financial statements, financial tables and other financial and
statistical data contained therein or omitted therefrom with respect to which
such counsel need not comment), at the time the Prospectus was filed with the
Commission under Rule 424(b) or at the time any amendment or supplement to the
Prospectus was filed with the Commission or transmitted to the Commission for
filing or on the Closing Date, contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (in
rendering this letter, counsel may state that they have not undertaken to verify
independently the information in the Registration Statement or Prospectus and
therefore do not assume any responsibility for the accuracy or completeness
thereof).
(d) Counsel for Trident shall have been furnished such documents as
they reasonably may require for the purpose of enabling them to review or pass
upon the matters required by Trident, and for the purpose of evidencing the
accuracy, completeness or satisfaction of any of the representations, warranties
or conditions herein contained, including but not limited to, resolutions of the
Board of Directors of the Company and the Bank regarding the authorization of
this Agreement and the transactions contemplated hereby.
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<PAGE>
(e) Prior to and at the Closing Date, in the reasonable opinion of
Trident, (i) there shall have been no material change in the financial
condition, business or results of operations of the Company and the Bank, taken
as a whole, since the latest date as of which such condition is set forth in the
Prospectus, except as referred to therein; (ii) there shall have been no
transaction entered into by the Company or the Bank after the latest date as of
which the financial condition of the Company or the Bank is set forth in the
Prospectus other than transactions referred to or contemplated therein,
transactions in the ordinary course of business, and transactions which are not
material to the Company and the Bank, taken as a whole; (iii) neither the
Company nor the Bank shall have received from the Office or Commission any
direction (oral or written) to make any change in the method of conducting their
respective businesses which is material to the business of the Company and the
Bank, taken as a whole, with which they have not complied; (iv) no action, suit
or proceeding, at law or in equity or before or by any federal or state
commission, board or other administrative agency, shall be pending or threatened
against the Company or the Bank or affecting any of their respective assets,
wherein an unfavorable decision, ruling or finding would have a material adverse
effect on the business, operations, financial condition or income of the Company
and the Bank, taken as a whole; and (v) the Shares shall have been qualified or
registered for offering and sale by the Company under the securities or blue sky
laws of such jurisdictions as Trident and the Company shall have agreed upon.
(f) At the Closing Date, Trident shall receive a certificate of the
principal executive, financial and accounting officers of each of the Company
and the Bank, dated the Closing Date, to the effect that: (i) they have examined
the Prospectus, and, at the time the Prospectus became authorized for final use,
the Prospectus did not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading with
respect to the Company or the Bank; (ii) since the date the Prospectus became
authorized for final use, no event has occurred which should have been set forth
in an amendment or supplement to the Prospectus which has not been so set forth,
including specifically, but without limitation, any material change in the
business, financial condition or results of operations of the Company or the
Bank and, the conditions set forth in clauses (ii) through (iv) inclusive of
subsection (e) of this Section 7 have been satisfied; (iii) to the best
knowledge of such officers, no order has been issued by the Commission or the
Office to suspend the Subscription Offering or the Direct Community Offering or
the effectiveness of the Prospectus, and no action for such purposes has been
instituted or threatened by the Commission or the Office; (iv) to the best
knowledge of such officers, no person has sought to obtain review of the final
actions of the Office and division approving the Plan; and (v) all of the
representations and warranties contained in Section 2 of this Agreement are true
and correct, with the same force and effect as though expressly made on the
Closing Date.
(g) At the Closing Date, Trident shall receive, among other documents,
(i) copies of the letters from the Office authorizing the use of the Prospectus,
(ii) a copy of the order of the Commission declaring the Registration Statement
effective; (iii) copies of the letters from the Office evidencing the corporate
existence of the Bank; (iv) a copy of the letter from the appropriate Delaware
authority evidencing the good standing of the Company; (v) a copy of the
20
<PAGE>
Company's certificate of incorporation certified by the appropriate Delaware
governmental authority; and (vi) a copy of the letter from the Office approving
the Bank's Federal Stock Charter.
(h) As soon as available after the Closing Date, Trident shall receive
a certified copy of the Bank's Federal Stock Charter executed by the appropriate
federal governmental authority.
(i) Concurrently with the execution of this Agreement, Trident
acknowledges receipt of a letter from Moore, Horton & Carlson, P.C., independent
certified public accountants, dated the date hereof and addressed to the Company
and Trident, in substance and form satisfactory to counsel for Trident, with
respect to the financial statements and certain financial information contained
in the Prospectus.
(j) At the Closing Date, Trident shall receive a letter in form and
substance satisfactory to counsel for Trident from Moore, Horton & Carlson,
P.C., independent certified public accountants, dated the Closing Date and
addressed to the Company and Trident, confirming the statements made by them in
the letter delivered by them pursuant to the preceding subsection as of a
specified date not more than five (5) days prior to the Closing Date.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are, in the reasonable
opinion of Trident and its counsel, satisfactory to Trident and its counsel. Any
certificates signed by an officer or director of the Company or the Bank
prepared for Trident's reliance and delivered to Trident or to counsel for
Trident at the Closing Date shall be deemed a representation and warranty by the
Company and the Bank to Trident as to the statements made therein. If any
condition to Trident's obligations hereunder to be fulfilled prior to or at the
Closing Date is not so fulfilled, Trident may terminate this Agreement or, if
Trident so elects, may waive any such conditions which have not been fulfilled,
or may extend the time of their fulfillment. If Trident terminates this
Agreement as aforesaid, the Company and the Bank shall reimburse Trident for its
expenses as provided in Section 3(b) hereof.
8. Indemnification.
---------------
(a) The Company and the Bank jointly and severally agree to indemnify
and hold harmless Trident, its officers, directors and employees and each
person, if any, who controls Trident within the meaning of Section 15 of the Act
or Section 20(a) of the Exchange Act, against any and all loss, liability,
claim, damage and expense whatsoever and shall further promptly reimburse such
persons for any legal or other expenses reasonably incurred by each or any of
them in investigating, preparing to defend or defending against any such action,
proceeding or claim (whether commenced or threatened) arising out of or based
upon (A) any misrepresentation by the Company or the Bank in this Agreement or
any breach of warranty by the Company or the Bank with respect to this Agreement
or arising out of or based upon any untrue or alleged untrue statement of a
material fact or the omission or alleged omission of a material fact required to
be stated or necessary to make not misleading any statements contained
21
<PAGE>
in (i) the Registration Statement or the Prospectus or (ii) any application
(including the Form AC and the Form H-(e)1-S) or other document or communication
(in this Section 8, collectively called "Application") prepared or executed by
or on behalf of the Company or the Bank or based upon written information
furnished by or on behalf of the Company or the Bank, whether or not filed in
any jurisdiction, to effect the Conversion or qualify the Shares under the
securities laws thereof or filed with the Office or Commission, unless such
statement or omission was made in reliance upon and in conformity with written
information furnished to the Company or the Bank with respect to Trident by or
on behalf of Trident expressly for use in the Prospectus or any amendment or
supplement thereof or in any Application, as the case may be, or (B) the
participation by Trident in the Conversion, provided, however, that this
indemnification agreement will not apply to any loss, liability, claim, damage
or expense found in a final judgment by a court of competent jurisdiction to
have resulted primarily from the bad faith, willful misconduct or gross
negligence of any party who may otherwise be entitled to indemnification
pursuant to this Section 8(a). This indemnity shall be in addition to any
liability the Company and the Bank may have to Trident otherwise.
(b) The Company shall indemnify and hold Trident harmless for any
liability whatsoever arising out of (i) the Allocation Instructions or (ii) any
records of account holders, depositors, borrowers and other members of the Bank
delivered to Trident by the Bank or its agents for use during the Conversion,
provided, however, that this indemnification agreement will not apply to any
loss, liability, claim, damage or expense found in a final judgment by a court
of competent jurisdiction to have resulted primarily from the bad faith, willful
misconduct or gross negligence of any party who may otherwise be entitled to
indemnification pursuant to this Section 8(a).
(c) Trident agrees to indemnify and hold harmless the Company and the
Bank, their officers, directors and employees and each person, if any, who
controls the Company and the Bank within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, to the same extent as the foregoing indemnity
from the Company and the Bank to Trident, but only with respect to (A)
statements or omissions, if any, made in the Prospectus or any amendment or
supplement thereof, in any Application or to a purchaser of the Shares in
reliance upon, and in conformity with, written information furnished to the
Company or the Bank with respect to Trident by or on behalf of Trident expressly
for use in the Prospectus or in any Application; (B) any misrepresentation by
Trident in Section 2 of this Agreement; or (C) any liability of the Company or
the Bank which is found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have principally and directly resulted from
gross negligence or willful misconduct of Trident.
(d) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party of the commencement thereof; but the
omission to so notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 8. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to
22
<PAGE>
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof, other than the
reasonable cost of investigation and except as otherwise provided herein. In
the event the indemnifying party elects to assume the defense of any such action
and retain counsel acceptable to the indemnified party, the indemnified party
may retain additional counsel, but shall bear the fees and expenses of such
counsel, unless (i) the indemnifying party shall have specifically authorized
the indemnified party to retain such counsel or (ii) the parties to such suit
include such indemnifying party and the indemnified party, and such indemnified
party shall have been advised by counsel that one or more material legal
defenses may be available to the indemnified party which may not be available to
the indemnifying party, in which case the indemnifying party shall not be
entitled to assume the defense of such suit notwithstanding the indemnifying
party's obligation to bear the fees and expenses of such counsel. An
indemnifying party against whom indemnity may be sought shall not be liable to
indemnify an indemnified party under this Section 8, if any settlement of any
such action is effected without such indemnifying party's consent. To the
extent required by law, this Section 8 is subject to and limited by the
provisions of Section 23A.
9. Contribution. In order to provide for just and equitable contribution
------------
in circumstances in which the indemnity agreement provided for in Section 8
above is for any reason held to be unavailable to Trident, the Company and/or
the Bank other than in accordance with its terms, the Company or the Bank and
Trident shall contribute to the aggregate losses, liabilities, claims, damages,
and expenses of the nature contemplated by said indemnity agreement incurred by
the Company or the Bank and Trident (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Bank on the one
hand and Trident on the other from the offering of the Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of the Company or
the Bank on the one hand and Trident on the other hand in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Bank on
the one hand and Trident on the other shall be deemed to be in the same
proportion as the total net proceeds from the Conversion received by the Company
and the Bank bear to the total fees received by Trident under this Agreement.
The relative fault of the Bank on the one hand and Trident on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Bank or by
Trident and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Bank and Trident agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in
23
<PAGE>
the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by the indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 9, Trident shall not be required to contribute any amount in excess of
the amount by which fees owed Trident pursuant to this Agreement exceeds the
amount of any damages which Trident has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section 11
(f) of the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. To the extent required by law,
this Section 9 is subject to and limited by the provisions of Section 23A.
10. Survival of Agreements Representations and Indemnities. The
------------------------------------------------------
respective indemnities of the Company and the Bank and Trident and the
representation and warranties of the Company and the Bank and of Trident, set
forth in or made pursuant to this Agreement, shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of Trident or the Company or the Bank or any
controlling person or indemnified party referred to in Section 8 hereof, and
shall survive any termination or consummation of this Agreement and/or the
issuance of the Shares, and any legal representative of Trident, the Company,
the Bank and any such controlling persons shall be entitled to the benefit of
the respective agreements, indemnities, warranties and representations.
11. Termination. Trident may terminate this Agreement by giving the
------------
notice indicated below in this Section at any time after this Agreement becomes
effective as follows:
(a) If any domestic or international event or act or occurrence has
materially disrupted the United States securities markets such as to make it, in
Trident's reasonable opinion, impracticable to proceed with the offering of the
Shares; or if trading on the American Stock Exchange or the New York Stock
Exchange shall have been suspended; or if the United States shall have become
involved in a war or major hostilities; or if a general banking moratorium has
been declared by a state or federal authority which has material effect on the
Bank or the Conversion; or if a moratorium in foreign exchange trading by major
international banks or persons has been declared; or if there shall have been a
material change in the capitalization, financial condition or business of the
Company or the Bank, or if the Bank shall have sustained a material or
substantial loss by fire, flood, accident, hurricane, earthquake, theft,
sabotage or other calamity or malicious act, whether or not said loss shall have
been insured;
(b) If Trident elects to terminate this Agreement as provided in this
Section, the Company and the Bank shall be notified promptly by Trident by
telephone or telegram, confirmed by letter.
(c) If this Agreement is terminated by Trident for any of the reasons
set forth in subsection (a) above, and to fulfill its obligations, if any,
pursuant to Sections 3, 6, 8(a) and
24
<PAGE>
9 of this Agreement and upon demand, the Company and the Bank shall pay Trident
the full amount so owing thereunder.
(d) The Bank may terminate the Conversion in accordance with the terms
of the Plan. Such termination shall be without liability to any party, except
that the Company and the Bank shall be required to fulfill their obligations
pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of this Agreement.
12. Notices. All communications hereunder, except as herein otherwise
--------
specifically provided, shall be in writing and if sent to Trident shall be
mailed, delivered or telegraphed and confirmed to Trident Securities, Inc., 4601
Six Forks Road, Suite 400, Raleigh, North Carolina 27609, Attention: Mr. R. Lee
Burrows, Jr. (with a copy to Malizia, Spidi, Sloane & Fisch, P.C., 1301 K
Street, N.W., Suite 700 East, Washington, D.C. 20005, Attention: Charles E.
Sloane, Esquire) and if sent to the Company or the Bank, shall be mailed,
delivered or telegraphed and confirmed to Fulton Bancorp, Inc., Fulton Savings
Bank, F.S.B., 410 Market Street, Fulton, Missouri 65251, Attention: Kermit D.
Gohring, President and Chief Executive Officer (with copies to Breyer & Aguggia,
Suite 470 East, 1300 I Street, N.W., Washington, D.C. 20005, Attention: Paul M.
Aguggia, Esquire).
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, Trident, the Company, the Bank and the controlling and
other persons referred to in Section 8 hereof, and their respective successors,
legal representatives and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
14. Construction. Unless governed by pre-emptive federal law, this
-------------
Agreement shall be governed by and construed in accordance with the substantive
laws of Missouri.
15. Counterparts. This Agreement may be executed in separate
-------------
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
25
<PAGE>
Please acknowledge your agreement to the foregoing by signing below and
returning to the Company one copy of this letter.
FULTON BANCORP, INC. FULTON SAVINGS BANK, FSB
By: By:
--------------------------------- ---------------------------------
Kermit D. Gohring Kermit D. Gohring
President and Chief President and Chief Executive
Executive Officer Officer
Dated: Dated:
------------------------------ ---------------------------
AGREED TO AND ACCEPTED:
TRIDENT SECURITIES, INC.
By:
----------------------------------
Dated:
-------------------------------
26
<PAGE>
Exhibit A
Trident Securities, Inc. is a registered selling agent in the jurisdictions
listed below:
Alabama Nebraska
Arizona Nevada
Arkansas New Hampshire
California New Jersey
Colorado New Mexico
Connecticut New York
Delaware North Carolina
District of Columbia North Dakota (Trident Securities, Inc.
Florida only, no agents)
Georgia Ohio
Idaho Oklahoma
Illinois Oregon
Indiana Pennsylvania
Iowa Rhode Island
Kansas South Carolina
Kentucky Tennessee
Louisiana Texas
Maine Vermont
Maryland Virginia
Massachusetts Washington
Michigan West Virginia
Minnesota Wisconsin
Mississippi Wyoming
Missouri
Trident Securities, Inc. is not a registered selling agent in the jurisdictions
listed below:
Alaska
Hawaii
Montana
South Dakota
Utah
0177fult\agency.agr
27
<PAGE>
FULTON BANCORP, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
COMMON STOCK CUSIP
See Reverse For
Certain Definitions
THIS CERTIFIES THAT
is the owner of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK,
$.01 PAR VALUE PER SHARE, OF
Fulton Bancorp, Inc., a stock corporation incorporated under the laws of the
State of Delaware. The shares represented by this Certificate are transferable
only on the stock transfer books of the Corporation by the holder of record
hereof or by his duly authorized attorney or legal representative upon the
surrender of this Certificate properly endorsed. THE SHARES REPRESENTED BY THIS
CERTIFICATE ARE NOT A DEPOSIT OR ACCOUNT AND ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. The Certificate
and shares represented hereby are issued and shall be held subject to all
provisions of the Certificate of Incorporation and Bylaws of the Corporation and
any amendments thereto (copies of which are on file with the Transfer Agent), to
all of which provisions the holder by acceptance hereof, assents.
IN WITNESS WHEREOF, Fulton Bancorp, Inc. has caused this Certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused a facsimile of its corporate seal to be hereunto affixed.
CORPORATE SECRETARY PRESIDENT
TRANSFER AGENT
[SEAL]
<PAGE>
Fulton Bancorp, Inc.
The shares represented by this Certificate are issued subject to all the
provisions of the Certificate of Incorporation and Bylaws of Fulton Bancorp,
Inc. ("Corporation") as from time to time amended (copies of which are on file
with the Transfer Agent and at the principal executive offices of the
Corporation).
The shares represented 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 vote in respect of the shares held in excess of the Limit, unless a
majority of the whole Board of Directors, as defined, shall have by resolution
granted in advance such entitlement or permission.
The Board of Directors of the Corporation is authorized by resolution(s),
from time to time adopted, to provide for the issuance of preferred stock in
series and to fix and state the 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. 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 affirmative vote of the holders of at least 80% of the voting
stock of the Corporation, voting together as a single class, shall be required
to approve certain business combinations and other transactions, pursuant to the
Certificate of Incorporation, or 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 through 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_______ under Uniform Gifts
(Cust) (Minor)
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 OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------
________________________________________________________________________________
________________________________________________________________________________
Please print or typewrite name and address,
including postal zip code, of assignee
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________ shares
of the Common Stock evidenced by this 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.
Dated _________________
__________________________________
Signature
____________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the Certificate in every particular, without
alteration or enlargement or any change whatever.
<PAGE>
Exhibit 8.2
[LETTERHEAD OF MOORE, HORTON & CARLSON, P.C.]
FORM OF MISSOURI TAX OPINION
Board of Directors
Fulton Savings Bank, FSB
Fulton, Missouri 65251
RE: Certain Missouri Income Tax Consequences Relating to Proposed Holding
Company Conversion
Gentlemen:
In accordance with your request, set forth herein is the opinion of this firm
relating to certain Missouri income tax consequences of (i) the proposed
conversion of Fulton Savings Bank, FSB (the "Bank") from a federally-chartered
mutual savings bank to a federally-chartered stock savings bank (the "Converted
Bank") (the "Stock Conversion") and (ii) the concurrent acquisition of 100% of
the outstanding capital stock of the Converted Bank by a parent holding company
formed at the direction of the Board of Directors of the Bank and to be known as
Fulton Bancorp, Inc. (the "Holding Company").
You have previously received the opinion of Breyer & Aguggia regarding the
federal income tax consequences of the Stock Conversion and Holding Company
formation to the Bank, the Converted Bank, and the Holding Company and the
deposit account holders of the Bank under the Internal Revenue Code of 1986,
as amended (the "Code"). The federal tax opinion concludes, inter alia,
that the proposed transactions qualify as a tax-free reorganization under
Section 368(a)(1)(F) of the Code.
The State of Missouri will, for income tax purposes, treat the proposed
transactions in an identical manner as they are treated by the Internal Revenue
Service for federal income tax purposes. Based upon the facts and circumstances
attendant to the Stock Conversion, and applicable provisions of the Internal
Revenue Code, it is our opinion that, under the laws of the State of Missouri,
no adverse Missouri tax consequences will be incurred by the parties to the
proposed transactions, including deposit account holders, as a result of the
Stock Conversion and Holding Company formation.
<PAGE>
Board of Directors
Fulton Savings Bank, FSB
Page 2
No opinion is expressed on any matter other than income tax consequences
including, but not limited to, any franchise or capital stock taxes which
might result from the implementation of the proposed transactions.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (Form S-1) of the Holding Company filed under the
Securities Act of 1933, as amended, the Bank's Application for Approval of
Conversion (Form AC) filed with the Office of Thrift Supervision ("OTS"),
and to the reference to us in the prospectus and proxy statement included
therein. We also consent to the filing of this opinion as an exhibit to the
Holding Company Application H-(e)1-S filed on behalf of the Holding Company
with the OTS.
Mexico, Missouri
, 1996
<PAGE>
FULTON SAVINGS AND LOAN ASSOCIATION
RETIREMENT TRUST
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS.................... 19
2.2 DETERMINATION OF TOP HEAVY STATUS.............. 19
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.... 23
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY........ 24
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES.. 24
2.6 POWERS AND DUTIES OF THE ADMINISTRATOR......... 25
2.7 RECORDS AND REPORTS............................ 26
2.8 APPOINTMENT OF ADVISERS........................ 26
2.9 INFORMATION FROM EMPLOYER...................... 26
2.10 PAYMENT OF EXPENSES............................ 27
2.11 MAJORITY ACTIONS............................... 27
2.12 CLAIMS PROCEDURE............................... 27
2.13 CLAIMS REVIEW PROCEDURE........................ 27
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY....................... 28
3.2 APPLICATION FOR PARTICIPATION................... 29
3.3 EFFECTIVE DATE OF PARTICIPATION................. 29
3.4 DETERMINATION OF ELIGIBILITY.................... 29
<PAGE>
3.5 TERMINATION OF ELIGIBILITY........................... 29
3.6 OMISSION OF ELIGIBLE EMPLOYEE........................ 30
3.7 INCLUSION OF INELIGIBLE EMPLOYEE..................... 30
3.8 ELECTION NOT TO PARTICIPATE.......................... 30
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION..... 30
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION............. 31
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION.......... 35
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND
EARNINGS............................................ 36
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS.................... 41
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS...... 44
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS................ 46
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS.. 49
4.9 MAXIMUM ANNUAL ADDITIONS............................ 52
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS........... 56
4.11 TRANSFERS FROM QUALIFIED PLANS...................... 57
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND.......................... 60
5.2 METHOD OF VALUATION.................................. 60
<PAGE>
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT........... 61
6.2 DETERMINATION OF BENEFITS UPON DEATH................ 61
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY.... 62
6.4 DETERMINATION OF BENEFITS UPON TERMINATION.......... 63
6.5 DISTRIBUTION OF BENEFITS............................ 68
6.6 DISTRIBUTION OF BENEFITS UPON DEATH................. 70
6.7 TIME OF SEGREGATION OR DISTRIBUTION................. 70
6.8 DISTRIBUTION FOR MINOR BENEFICIARY.................. 71
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN...... 71
6.10 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION..... 71
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE............... 72
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE......... 72
7.3 OTHER POWERS OF THE TRUSTEE......................... 73
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS............ 76
7.5 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES....... 76
7.6 ANNUAL REPORT OF THE TRUSTEE........................ 76
7.7 AUDIT............................................... 77
7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE...... 78
7.9 TRANSFER OF INTEREST................................ 79
7.10 EMPLOYER SECURITIES AND REAL PROPERTY............... 80
<PAGE>
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT............................................ 80
8.2 TERMINATION.......................................... 81
8.3 MERGER OR CONSOLIDATION.............................. 82
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS................................ 82
9.2 ALIENATION.......................................... 82
9.3 CONSTRUCTION OF PLAN................................ 83
9.4 GENDER AND NUMBER................................... 83
9.5 LEGAL ACTION........................................ 83
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS.............. 83
9.7 BONDING............................................. 84
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE.......... 84
9.9 INSURER'S PROTECTIVE CLAUSE......................... 85
9.10 RECEIPT AND RELEASE FOR PAYMENTS.................... 85
9.11 ACTION BY THE EMPLOYER.............................. 85
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY.. 85
9.13 HEADINGS............................................ 86
9.14 APPROVAL BY INTERNAL REVENUE SERVICE................ 86
9.15 UNIFORMITY.......................................... 87
<PAGE>
FULTON SAVINGS AND LOAN ASSOCIATION
RETIREMENT TRUST
THIS AGREEMENT, hereby made and entered into this 28th day of December,
----- --------
1992, , by and between Fulton Savings and Loan Association (herein referred to
- ----
as the "Employer") and Kermit D. Gohring, Richard W. Gohring and Bonnie Smith
(herein referred to as the "Trustee").
W I T N E S S E T H:
WHEREAS, the Employer heretofore established a Profit Sharing Plan and
Trust effective January 1, 1990, (hereinafter called the "Effective Date") known
as Fulton Savings and Loan Association Retirement Trust (herein referred to as
the "Plan") in recognition of the contribution made to its successful operation
by its employees and for the exclusive benefit of its eligible employees; and
WHEREAS, under the terms of the Plan, the Employer has the ability to amend
the Plan, provided the Trustee joins in such amendment if the provisions of the
Plan affecting the Trustee are amended;
NOW, THEREFORE, effective January 1, 1990, except as otherwise provided,
the Employer and the Trustee in accordance with the provisions of the Plan
pertaining to amendments thereof, hereby amend the Plan in its entirety and
restate the Plan to provide as follows:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person designated by the Employer pursuant to
Section 2.4 to administer the Plan on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1
<PAGE>
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 2.2.
1.5 "Anniversary Date" means December 31st.
1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such Participant's
wages, salaries, fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for personal
services actually rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and reimbursements or other expense
allowances under a nonaccountable plan (as described in Regulation 1.62-2(c))
for a Plan Year.
Compensation shall exclude (a)(l) contributions made by the Employer to a
plan of deferred compensation to the extent that, the contributions are not
includible in the gross income of the Participant for the taxable year in which
contributed, (2) Employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employee's gross income, (3) any
distributions from a plan of deferred compensation; (b) 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; (c) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (d) other amounts which receive special tax benefits, or contributions made
by the Employer (whether or not under a salary reduction) towards the purchase
of any annuity contract described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross income of the Employee).
2
<PAGE>
For purposes of this Section, the determination of Compensation shall be
made by:
(a) including amounts which are contributed by the Employer pursuant
to a salary reduction agreement and which are not includible in the gross
income of the Participant under Code Sections 125, 402(a)(8), 402(h),
403(b) or 457, and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation, Compensation shall be
recognized as of such Employee's effective date of participation pursuant to
Section 3.3.
Compensation in excess of $200,000 shall be disregarded. Such amount shall
be adjusted at the same time and in such manner as permitted under Code Section
415(d), except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within such calendar
year and the first adjustment to the $200,000 limitation shall be effective on
January 1, 1990. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the
Plan Year begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12). In applying this limitation, the
family group of a Highly Compensated Participant who is subject to the Family
Member aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10) Highly
Compensated Employees paid the greatest "415 Compensation" during the year,
shall be treated as a single Participant, except that for this purpose Family
Members shall include only the affected Participant's spouse and any lineal
descendants who have not attained age nineteen (19) before the close of the
year. If, as a result of the application of such rules the adjusted $200,000
limitation is exceeded, then the limitation shall be prorated among the affected
Family Members in proportion to each such Family Member's Compensation prior to
the application of this limitation, or the limitation shall be adjusted in
accordance with any other method permitted by Regulation.
If, as a result of such rules, the maximum "annual addition" limit of
Section 4.9(a) would be exceeded for one or more of the affected Family Members,
the prorated Compensation of all affected Family Members shall be adjusted to
avoid or reduce any excess. The prorated Compensation of any affected Family
Member whose allocation would exceed the limit shall be adjusted
3
<PAGE>
downward to the level needed to provide an allocation equal to such limit. The
prorated Compensation of affected Family Members not affected by such limit
shall then be adjusted upward on a pro rata basis not to exceed each such
affected Family Member's Compensation as determined prior to application of the
Family Member rule. The resulting allocation shall not exceed such individual's
maximum "annual addition" limit. If, after these adjustments, an "excess amount"
still results, such "excess amount" shall be disposed of in the manner described
in Section 4.10(a) pro rata among all affected Family Members.
If, in connection with the adoption of this amendment and restatement, the
definition of Compensation has been modified, then, for Plan Years prior to the
Plan Year which includes the adoption date of this amendment and restatement,
Compensation means compensation determined pursuant to the Plan then in effect.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy, or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Early Retirement Date" means any Anniversary Date (prior to the
Normal Retirement Date) coinciding with or following the date on which a
Participant or Former Participant attains age 55 and has completed at least 10
Years of Service with the Employer (Early Retirement Age). A Participant shall
become fully Vested upon satisfying this requirement if still employed at his
Early Retirement Age.
A Former Participant who terminates employment after satisfying the service
requirement for Early Retirement and who thereafter reaches the age requirement
contained herein shall be entitled to receive his benefits under this Plan.
1.12 "Elective Contribution" means the Employer's contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6 shall be
considered an Elective Contribution for purposes of the Plan. Any such
contributions deemed to be Elective Contributions shall be
4
<PAGE>
subject to the requirements of Sections 4.2(b) and 4.2(c) and shall further be
required to satisfy the discrimination requirements of Regulation 1.401(k)-
l(b)(5), the provisions of which are specifically incorporated herein by
reference.
1.13 "Eligible Employee" means any Employee.
Employees of Affiliated Employers shall not be eligible to participate in
this Plan unless such Affiliated Employers have specifically adopted this Plan
in writing.
1.14 "Employee" means any person who is employed by the Employer or
Affiliated Employer, but excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) unless such Leased Employees are covered by a plan
described in Code Section 414(n)(5) and such Leased Employees do not constitute
more than 20% of the recipient's non-highly compensated work force.
1.15 "Employer" means Fulton Savings and Loan Association and any successor
which shall maintain this Plan; and any predecessor which has maintained this
Plan. The Employer is a corporation, with principal offices in the State of
Missouri.
1.16 "Excess Aggregate Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of the Employer matching contributions made
pursuant to Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a).
1.17 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions made on behalf of Highly Compensated Participants for
the Plan Year over the maximum amount of such contributions permitted under
Section 4.5(a). Excess Contributions shall be treated as an "annual addition"
pursuant to Section 4.9(b).
1.18 "Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and the elective deferrals pursuant to Section 4.2(f)
actually made on behalf of such Participant for such taxable year, over the
dollar limitation provided for in Code Section 402(g), which is
incorporated herein by reference. Excess Deferred Compensation shall be treated
as an "annual addition" pursuant to Section
5
<PAGE>
4.9(b) when contributed to the Plan unless distributed to the affected
Participant not later than the first April 15th following the close of the
Participant's taxable year. Additionally, for purposes of Sections 2.2 and
4.4(h), Excess Deferred Compensation shall continue to be treated as Employer
contributions even if distributed pursuant to Section 4.2(f). However, Excess
Deferred Compensation of Ion-Highly Compensated Participants is not taken into
account for purposes of Section 4.5(a) to the extent such Excess Deferred
Compensation occurs pursuant to Section 4.2(d).
1.19 "Family Member" means, with respect to an affected Participant, such
Participant's spouse, such Participant's lineal descendants and ascendants and
their spouses, all as described in Code Section 414(q)(6)(B).
1.20 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, tb) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.21 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on January 1st of each year and ending the following December 31st.
1.22 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive l-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(g)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
6
<PAGE>
1.23 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.24 "415 Compensation" with respect to any Participant means such
Participant's wages, salaries, fees for professional services and other amounts
received (without regard to whether or
not an amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the Plan to the extent that
the amounts are includible in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a nonaccountable
plan (as described in Regulation 1.62-2(c)) for a Plan Year.
"415 Compensation" shall exclude (a)(l) contributions made by the Employer
to a plan of deferred compensation to the extent that, the contributions are not
includible in the gross income of the Participant for the taxable year in which
contributed, (2) Employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employee's gross income, (3) any
distributions from a plan of deferred compensation; (b) amounts realized from
the exercise of a nonqualified 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; (c) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
and (d) other amounts which receive special tax benefits, or contributions made
by the Employer (whether or not under a salary reduction) towards the purchase
of any annuity contract described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross income of the Employee).
If, in connection with the adoption of this amendment and restatement, the
definition of "415 Compensation" has been modified, then, for Plan Years prior
to the Plan Year which includes the adoption date of this amendment and
restatement, "415 Compensation" means compensation determined pursuant to the
Plan then in effect.
7
<PAGE>
1.25 "414(s) Compensation" with respect to any Participant means such
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s) Compensation"
shall be made by including amounts which are contributed by the Employer
pursuant to a salary reduction agreement and which are not includible in the
gross income of the Participant under Code Sections 125, 402(a)(8), 402(h),
403(b) or 457, and Employee contributions described in Code Section 414(h)(2)
that are treated as Employer contributions.
"414(s) Compensation" in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted under
Code Section 415(d), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year and the first adjustment to the $200,00 limitation shall be
effective on January 1, 1990. For any short Plan Year the "414(s) Compensation"
limit shall be an amount equal to the "414(s) Compensation" limit for the
calendar year in which the Plan Year begins multiplied by the ratio obtained by
dividing the number of full months in the short Plan Year by twelve (12). In
applying this limitation, the family group of a Highly Compensated Participant
who is subject to the Family Member aggregation rules of Code Section 414(q)(6)
because such Participant is either a "five percent owner" of the Employer or one
of the ten (10) Highly Compensated Employees paid the greatest "415
Compensation" during the year, shall be treated as a single Participant, except
that for this purpose Family Members shall include only the affected
Participant's spouse and any lineal descendants who have not attained age
nineteen (19) before the close of the year.
If, in connection with the adoption of this amendment and restatement, the
definition of "414(s) Compensation" has been modified, then, for Plan Years
prior to the Plan Year which includes the adoption date of this amendment and
restatement, "414(s) Compensation" means compensation determined pursuant to the
Plan then in effect.
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1.26 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section
1.32(c).
(b) Employees who received "415 Compensation" during the "look-
back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the "look-
back year" from the Employer in excess of $50,000 and were in the Top
Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of
the Employer (as that term is defined within the meaning of the
Regulations under Code Section 416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50 percent
of the limit in effect under Code Section 415(b)(1)(A) for any such
Plan Year. The number of officers shall be limited to the lesser of
(i) 50 employees; or (ii) the greater of 3 employees or 10 percent of
all employees. For the purpose of determining the number of officers,
Employees described in Section 1.55(a), (b), (c) and (d) shall be
excluded, but such Employees shall still be considered for the purpose
of identifying the particular Employees who are officers. If the
Employer does not have at least one officer whose annual "415
Compensation" is in excess of 50 percent of the Code Section
415(b)(1)(A) limit, then the highest paid officer of the Employer will
be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look-back year".
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
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For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections 125,
402(a)(8), 402(h)(1)(B) and, in the case of Employer contributions made pursuant
to a salary reduction agreement, by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
Section 403(b). Additionally, the dollar threshold amounts specified in (b) and
(c) above shall be adjusted at such time and in such manner as is provided in
Regulations In the case of such an adjustment, the dollar limits which shall be
applied are those for the calendar year in which the "determination year" or
"look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who are non-
resident aliens and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Additionally, all Affiliated Employers shall be taken into account as a single
employer and Leased Employees within the meaning of Code Sections 414(n)(2) and
414(o)(2) shall be considered Employees unless such Leased Employees are covered
by a plan described in Code Section 414(n)(5) and are not covered in any
qualified plan maintained by the Employer. The exclusion of Leased Employees for
this purpose shall be applied on a uniform and consistent basis for all of the
Employer's retirement plans. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees without regard to whether they performed
services during the "determination year".
1.27 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner". For purposes
of this Section, "determination year", "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.26. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(q) definition is applicable.
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1.28 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.29 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period; (2) each
hour for which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period; (3) each hour for
which back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. 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.
The same Hours of Service shall not be credited both under (1) or (2), as the
case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made by or
due from the Employer regardless of whether such payment is made by or due from
the Employer directly, or indirectly through, among others, a trust fund, or
insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a Year of
Service, a year of participation for purposes of accrued benefits, a l-Year
Break in Service, and employment commencement date (or reemployment commencement
date).
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In addition, Hours of Service will be credited for employment with other
Affiliated Employers. The provisions of Department of Labor regulations
2530.200b-2(b) and (c) are incorporated herein by reference.
1.30 "Income" means the income or losses allocable to Excess Deferred
Compensation which amount shall be allocated in the same manner as income or
losses are allocated pursuant to Section 4.4(f).
1.31 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary responsibility
to the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940, a
bank, or an insurance company.
1.32 "Key Employee" means an Employee as defined in Code Section 416(i) and
the Regulations thereunder. Generally, any Employee or former Employee (as well
as each of his Beneficiaries) is considered a Key Employee if he, at any time
during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within
the meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation"
from the Employer for a Plan Year greater than the dollar limitation
in effect under Code Section 415(c)(1)(A) for the calendar year in
which such Plan Year ends and owning (or considered as owning within
the meaning of Code Section 318) both more than one-half percent
interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than five percent (5%) of the capital or profits interest in
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the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person who
owns more than one percent (1%) of the capital or profits interest in
the Employer. In determining percentage ownership hereunder, employers
that would otherwise be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be treated as separate employers. However, in
determining whether an individual has "415 Compensation" of more than
$150,000, "415 Compensation" from each employer required to be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken
into account.
For purposes of this Section, the determination of "415 Compensation" shall
be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections 125,
402(a)(B), 402(h)(1)(s) and, in the case of Employer contributions made pursuant
to a salary reduction agreement, by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of Code
Section 403(b).
1.33 "Late Retirement Date" means the Anniversary Date coinciding with or
next following a Participant's actual Retirement Date after having reached his
Normal Retirement Date.
1.34 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are of a type historically performed by employees in the
business field of the recipient employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided
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by the recipient employer. A Leased Employee shall not be considered an Employee
of the recipient:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at least 108
of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction
agreement which are excludable from the employee's gross income
under Code Sections 125, 402(a)(8), 402(h) or 403(b);
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated work force.
1.35 "Non-Elective Contribution" means the Employer's contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution.
1.36 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.37 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.38 "Normal Retirement Age" means the Participant's 65th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.39 "Normal Retirement Date" means the Anniversary Date coinciding with or
next following the Participant's Normal Retirement Age.
1.40 "l-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a l-Year Break in Service, Hours of Service shall be
recognized for "authorized leaves of absence" and "maternity and paternity
leaves of absence." Years of Service and l-Year Breaks in Service shall be
measured on the same computation period.
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"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established nondiscriminatory
policy, whether occasioned by illness, military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years beginning
after December 31, 1984, an absence from work for any period by reason of the
Employee's pregnancy, birth of the Employee's child, placement of a child with
the Employee in connection with the adoption of such child, or any absence for
the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a l-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.41 "Participant" means any Eligible Employee who participates in the Plan
as provided in Sections 3.2 and 3.3, and has not for any reason become
ineligible to participate further in the Plan.
1.42 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Employer's Non-Elective Contributions.
A separate accounting shall be maintained with respect to that portion of
the Participant's Account attributable to Employer matching contributions made
pursuant to Section 4.1(b) and Employer discretionary contributions made
pursuant to Section 4.1(c).
1.43 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
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1.44 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer's Elective
Contributions. A separate accounting shall be maintained with respect to that
portion of the Participant's Elective Account attributable to Elective
Contributions pursuant to Section 4.2 and any Employer Qualified Non-Elective
Contributions.
1.45 "Plan" means this instrument, including all amendments thereto.
1.46 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.47 "Qualified Non-Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to Section 4.6. Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests.
In addition, the Employer's contributions to the Plan that are made
pursuant to Section 4.8(h) which are used to satisfy the "Actual Contribution
Percentage" tests shall be considered Qualified Non-Elective Contributions and
be subject to the provisions of Sections 4.2(b) and 4.2(c).
1.48 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.49 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.50 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such retirement
occurs on a Participant's Normal Retirement Date, Early or Late Retirement Date
(see Section 6.1).
1.51 "Super Top Heavy Plan" means a plan described in Section 2.2(b).
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1.52 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.53 "Top Heavy Plan" means a plan described in Section 2.2(a).
1.54 "Top Heavy Plan Year" means a Plan Year during which the Plan is a Top
Heavy Plan.
1.55 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for this purpose in accordance with
Section 1.26) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are nonresident aliens and who received no earned income
(within the meaning of Code Section 911(d)(2)) from the Employer constituting
United States source income within the meaning of Code Section 861(a)(3) shall
not be treated as Employees. Additionally, for the purpose of determining the
number of active Employees in any year, the following additional Employees shall
also be excluded; however, such Employees shall still be considered for the
purpose of identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the Employer are
covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the identification of particular
Employees in the Top Paid Group.
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The foregoing exclusions set forth in this Section shall be applied on a
uniform and consistent basis for all purposes for which the Code Section 414(q)
definition is applicable.
1.56 "Total and Permanent Disability" means a physical or mental condition
of a Participant resulting from bodily injury, disease, or mental disorder which
renders him incapable of continuing his usual and customary employment with the
Employer. The disability of a Participant shall be determined by a licensed
physician chosen by the Administrator. The determination shall be applied
uniformly to all Participants.
1.57 "Trustee" means the person or entity named as trustee herein or in any
separate trust forming a part of this Plan, and any successors.
1.58 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.59 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.60 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial computation
period shall begin with the date on which the Employee first performs an Hour of
Service. The participation computation period beginning after a 1-Year Break in
Service shall be measured from the date on which an Employee again performs an
Hour of Service. The participation computation period shall shift to the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service. An Employee who is credited with the required
Hours of Service in both the initial computation period (or the computation
period beginning after a 1-Year Break in Service) and the Plan Year which
includes the anniversary of the date on which the Employee first performed an
Hour of Service, shall be credited with two (2) Years of Service for purposes of
eligibility to participate.
For vesting purposes, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan.
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For all other purposes, the computation period shall be the Plan Year.
Notwithstanding the foregoing, for any short Plan Year, the determination
of whether an Employee has completed a Year of Service shall be made in
accordance with Department of Labor regulation 2530.203-2(c). However, in
determining whether an Employee has completed a Year of Service for benefit
accrual purposes in the short Plan Year, the number of the Hours of Service
required shall be proportionately reduced based on the number of full months in
the short Plan Year.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY AND ADMINISTRATION
2.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special vesting
requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan and the
special minimum allocation requirements of Code Section 416(c) pursuant to
Section 4.4 of the Plan.
2.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in which, as
of the Determination Date, (1) the Present Value of Accrued Benefits of Key
Employees and (2) the sum of the Aggregate Accounts of Key Employees under
this Plan and all plans of an Aggregation Group, exceeds sixty percent
(60%) of the Present Value of Accrued Benefits and the Aggregate Accounts
of all Key and Non-Key Employees under this Plan and all plans of an
Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate Account
balance shall not be taken into account for purposes of determining whether
this Plan is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group). In
addition, if a Participant or Former Participant has not performed any
services for any Employer maintaining the Plan at any time during the five
year period ending on
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the Determination Date, any accrued benefit for such Participant or Former
Participant shall not be taken into account for the purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of Key
Employees under this Plan and all plans of an Aggregation Group, exceeds
ninety percent (90%) of the Present Value of Accrued Benefits and the
Aggregate Accounts of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account as of the
Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the most recent
valuation occurring within a twelve (12) month period ending on the
Determination Date;
(2) an adjustment for any contributions due as of the Determination
Date. Such adjustment shall be the amount of any contributions
actually made after the valuation date but due on or before the
Determination Date, except for the first Plan Year when such
adjustment shall also reflect the amount of any contributions made
after the Determination Date that are allocated as of a date in that
first Plan Year.
(3) any Plan distributions made within the Plan Year that includes the
Determination Date or within the four (4) preceding Plan Years.
However, in the case of distributions made after the valuation date
and prior to the Determination Date, such distributions are not
included as distributions for top heavy purposes to the extent that
such distributions are already included in the Participant's Aggregate
Account balance as of the valuation date. Notwithstanding anything
herein to the contrary, all distributions, including distributions
made prior to January 1, 1984, and distributions under a terminated
plan which if it had not been terminated would have been required to
be included in an Aggregation Group, will be
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counted. Further, distributions from the Plan (including the cash
value of life insurance policies) of a Participant's account balance
because of death shall be treated as a distribution for the purposes
of this paragraph.
(4) any Employee contributions, whether voluntary or mandatory.
However, amounts attributable to tax deductible qualified voluntary
employee contributions shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan transfers
(ones which are both initiated by the Employee and made from a plan
maintained by one employer to a plan maintained by another employer),
if this Plan provides the rollovers or plan-to-plan transfers, it
shall always consider such rollovers or plan-to-plan transfers as a
distribution for the purposes of this Section. If this Plan is the
plan accepting such rollovers or plan-to-plan transfers, it shall not
consider such rollovers or plan-to-plan transfers as part of the
Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan transfers
(ones either not initiated by the Employee or made to a plan
maintained by the same employer), if this Plan provides the rollover
or plan-to-plan transfer, it shall not be counted as a distribution
for purposes of this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider such rollover or
plan-to-plan transfer as part of the Participant's Aggregate Account
balance, irrespective of the date on which such rollover or plan-to-
plan transfer is accepted.
(7) For the purposes of determining whether two employers are to be
treated as the same employer in (5) and (6) above, all employers
aggregated under Code Section 414(b), (c), (m) and (o) are treated as
the same employer.
(d) "Aggregation Group" means either a Required Aggregation Group or
a Permissive Aggregation Group as hereinafter determined.
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(1) Required Aggregation Group: In determining a Required Aggregation
Group hereunder, each plan of the Employer in which a Key Employee is
a participant in the Plan Year containing the Determination Date or
any of the four preceding Plan Years, and each other plan of the
Employer which enables any plan in which a Key Employee participates
to meet the requirements of Code Sections 401(a)(4) or 410, will be
required to be aggregated. Such group shall be known as a Required
Aggregation Group.
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.
(2) Permissive Aggregation Group: The Employer may also include any
other plan not required to be included in the Required Aggregation
Group, provided the resulting group, taken as a whole, would continue
to satisfy the provisions of Code Sections 401(a)(4) and 410. Such
group shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation 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 a Top Heavy Group. No plan
in the Permissive Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is not a Top Heavy Group.
(3) Only those plans of the Employer in which the Determination Dates
fall within the same calendar year shall be aggregated in order to
determine whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan of the
Employer if it was maintained within the last five (5) years ending on
the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding Plan
Year, or (b) in the case of the first Plan Year, the last day of
such Plan Year.
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(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant other than
a Key Employee, shall be as determined using the single accrual method used for
all plans of the Employer and Affiliated Employers, or if no such single method
exists, using a method which results in benefits accruing not more rapidly than
the slowest accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall be determined as of
the most recent valuation date that falls within or ends with the 12-month
period ending on the Determination Date except as provided in Code Section 416
and the Regulations thereunder for the first and second plan years of a defined
benefit plan.
(g) "Top Heavy Group" means an Aggregation Group in which, as of the
Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees under all
defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all defined
contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined for all
Participants.
2.3 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to assure that the Plan is
being operated for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the Code, and
the Act.
(b) The Employer shall establish a "funding policy and method",
i.e., it shall determine whether the Plan has a short run need for
liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or
its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
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communication of such a "funding policy and method" shall not,
however, constitute a directive to the Trustee as to investment of the
Trust Funds. Such "funding policy and method" shall be consistent with
the objectives of this Plan and with the requirements of Title I of
the Act.
(c) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.4 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be eligible
to serve as an Administrator. Any person so appointed shall signify his
acceptance by filing written acceptance with the Employer. An Administrator may
resign by delivering his written resignation to the Employer or be removed by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, or upon delivery to the Administrator if no date is
specified.
The Employer, upon the resignation or removal of an Administrator, shall
promptly designate in writing a successor to this position. If the Employer does
not appoint an Administrator, the Employer will function as the Administrator.
2.5 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the responsibilities
of each Administrator may be specified by the Employer and accepted in writing
by each Administrator. In the event that no such delegation is made by the
Employer, the Administrators may allocate the responsibilities among themselves,
in which event the Administrators shall notify the Employer and the Trustee in
writing of such action and specify the responsibilities of each Administrator.
The Trustee thereafter shall accept and rely upon any documents executed by the
appropriate Administrator until such time as the Employer or the Administrators
file with the Trustee a written revocation of such designation.
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2.6 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the Plan
for the exclusive benefit of the Participants and their Beneficiaries, subject
to the specific terms of the Plan. The Administrator shall administer the Plan
in accordance with its terms and shall have the power and discretion to construe
the terms of the Plan and to determine all questions arising in connection with
the administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon all
persons. The Administrator may establish procedures, correct any defect, supply
any information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose of the
Plan; provided, however, that any procedure, discretionary act, interpretation
or construction shall be done in a nondiscriminatory manner based upon uniform
principles consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of Code
Section 401(a), and shall comply with the terms of the Act and all regulations
issued pursuant thereto. The Administrator shall have all powers necessary or
appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to
the amount and the kind of benefits to which any Participant shall be
entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are consistent with
the terms hereof;
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(f) to determine the size and type of any Contract to be
purchased from any insurer, and to designate the insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the Trustee
from time to time the sums of money necessary or desirable to be
contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their Compensation
deferred or paid to them n cash;
(j) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.7 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall keep
all other books of account, records, and other data that may be necessary for
proper administration of the Plan and shall be responsible for supplying all
information and reports to the Internal Revenue Service, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.8 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the Administrator,
may appoint counsel, specialists, advisers, and other persons as the
Administrator or the Trustee deems necessary or desirable in connection with the
administration of this Plan.
2.9 INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the Employer shall
supply full and timely information to the Administrator on all matters relating
to the Compensation of all Participants, their Hours of Service, their Years of
Service, their retirement, death, disability, or termination of employment, and
such other pertinent facts as the Administrator may require; and the
Administrator shall advise the Trustee of
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such of the foregoing facts as may be pertinent to the Trustee's duties under
the Plan. The Administrator may rely upon such information as is supplied by the
Employer and shall have no duty or responsibility to verify such information.
2.10 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident to the
functioning of the Administrator, including, but not limited to, fees of
accountants, counsel, and other specialists and their agents, and other costs of
administering the Plan. Until paid, the expenses shall constitute a liability of
the Trust Fund. However, the Employer may reimburse the Trust Fund for any
administration expense incurred.
2.11 MAJORITY ACTIONS
Except where there has been an allocation and delegation of administrative
authority pursuant to Section 2.5, if there shall be more than one
Administrator, they shall act by a majority of their number, but may authorize
one or more of them to sign all papers on their behalf.
2.12 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed with the Administrator on
forms supplied by the Employer. Written notice of the disposition of a claim
shall be furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be understood by
the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
2.13 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to Section 2.12
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed
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with the Administrator no later than 60 days after receipt of the written
notification provided for in Section 2.12. The Administrator shall then conduct
a hearing within the next 60 days, at which the claimant may be represented by
an attorney or any other representative of his choosing and at which the
claimant shall have an opportunity to submit written and oral evidence and
arguments in support of his claim. At the hearing (or prior thereto upon 5
business days written notice to the Administrator) the claimant or his
representative shall have an opportunity to review all documents in the
possession of the Administrator which are pertinent to the claim at issue and
its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and has
attained age 19 shall be eligible to participate hereunder as of the date he has
satisfied such requirements. However, any Employee who was a Participant in the
Plan prior to the effective date of this amendment and restatement shall
continue to participate in the Plan. The Employer shall give each prospective
Eligible Employee written notice of his eligibility to participate in the Plan
prior to the close of the Plan Year in which he first becomes an Eligible
Employee.
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3.2 APPLICATION FOR PARTICIPATION
In order to become a Participant hereunder, each Eligible Employee shall
make application to the Employer for participation in the Plan and agree to the
terms hereof. Upon the acceptance of any benefits under this Plan, such Employee
shall automatically be deemed to have made application and shall be bound by the
terms and conditions of the Plan and all amendments hereto.
3.3 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee shall become a Participant effective as of the first
day of the month coinciding with or next following the date on which such
Employee met the eligibility requirements of Section 3.1, provided said Employee
was still employed as of such date (or if not employed on such date, as of the
date of rehire if a l-Year Break in Service has not occurred).
3.4 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the Employer. Such
determination shall be conclusive and binding upon all persons, as long as the
same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.13.
3.5 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification of
an Eligible Employee to an ineligible Employee, such Former
Participant shall continue to vest in his interest in the Plan for
each Year of Service completed while a noneligible Employee, until
such time as his Participant's Account shall be forfeited or
distributed pursuant to the terms of the Plan. Additionally, his
interest in the Plan shall continue to share in the earnings of the
Trust Fund.
(b) In the event a Participant is no longer a member of an
eligible class of Employees and becomes ineligible to participate but
has not incurred a l-Year Break in Service, such Employee will
participate immediately upon returning to an eligible class of
Employees. If such Participant incurs a l-Year Break in Service,
eligibility will be determined under the break in service rules of the
Plan.
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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 made
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 with
respect to him had he not been omitted. Such contribution 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 such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture (except for Deferred
Compensation which shall be distributed to the ineligible person) for the Plan
Year in which the discovery is made.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect voluntarily
not to participate in the Plan. The election not to participate must be
communicated to the Employer, in writing, at least thirty (30) days before the
beginning of a Plan Year.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed an Employer's Elective Contribution.
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(b) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a discretionary matching
contribution equal to a percentage of each such Participant's Deferred
Compensation, the exact percentage to be determined each year by the
Employer, which amount shall be deemed an Employer's Non-Elective
Contribution.
(c) A discretionary amount, which amount shall be deemed an
Employer's Non-Elective Contribution.
(d) Notwithstanding the foregoing, however, the Employer's
contributions for any Plan Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash
or in such property as is acceptable to the Trustee.
(e) Except, however, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a contribution even
if it exceeds the amount which is deductible under Code Section 404.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a portion of his
Compensation which would have been received in the Plan Year (except
for the deferral election) by up to the maximum amount which will not
cause the Plan to violate the provisions of Sections 4.5(a) and 4.9,
or cause the Plan to exceed the maximum amount allowable as a
deduction to the Employer under Code Section 404. A deferral election
(or modification of an earlier election) may not be made with respect
to Compensation which is currently available on or before the date the
Participant executed such election.
The amount by which Compensation is reduced shall be that
Participant's Deferred Compensation and be treated as an Employer
Elective Contribution and allocated to that Participant's Elective
Account.
(b) The balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to Forfeiture for
any reason.
(c) Amounts held in the Participant's Elective Account may not be
distributable earlier than:
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(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan", as that term is described in
Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity that is
not an Affiliated Employer of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) used in a trade or
business of such corporation if such corporation continues to
maintain this Plan after the disposition with respect to a
Participant who continues employment with the corporation
acquiring such assets; or
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a subsidiary
(within the meaning of Code Section 409(d)(3)) to an entity which
is not an Affiliated Employer but only with respect to a
Participant who continues employment with such subsidiary.
(d) For each Plan Year, a Participant's Deferred Compensation
made under this Plan and all other plans, contracts or arrangements of
the Employer maintaining this Plan shall not exceed, during any
taxable year of the Participant, the limitation imposed by Code
Section 402(g), as in effect at the beginning of such taxable year. If
such dollar limitation is exceeded, a Participant will be deemed to
have notified the Administrator of such excess amount which shall be
distributed in a manner consistent with 4.2(f). The dollar limitation
shall be adjusted annually pursuant to the method provided in Code
Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iv)(B) from any
other plan maintained by the Employer, then such Participant shall not
be permitted to elect to have Deferred Compensation contributed to the
Plan on his behalf for a period of twelve (12) months following the
receipt of the
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distribution. Furthermore, the dollar limitation under Code Section
402(g) shall be reduced, with respect to the Participant's taxable
year following the taxable year in which the hardship distribution was
made, by the amount of such Participant's Deferred Compensation, if
any, pursuant to this Plan (and any other plan maintained by the
Employer) for the taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-l(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension (as
defined in Code Section 408(k)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457, or a trust described in Code
Section 501(c)(18) cumulatively exceed the limitation imposed by Code
Section 402(g) (as adjusted annually in accordance with the method
provided in Code Section 415(d) pursuant to Regulations) for such
Participant's taxable year, the Participant may, not later than March
1 following the close of the Participant's taxable year, notify the
Administrator in writing of such excess and request that his Deferred
Compensation under this Plan be reduced by an amount specified by the
Participant. In such event, the Administrator may direct the Trustee
to distribute such excess amount (and any Income allocable to such
excess amount) to the Participant not later than the first April 15th
following the close of the Participant's taxable year. Any
distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata distribution of
Excess Deferred Compensation and Income. The amount distributed shall
not exceed the Participant's Deferred Compensation under the Plan for
the taxable year. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following
conditions:
(1) the distribution must be made after the date on which the
Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as Excess
Deferred Compensation; and
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(3) the Plan must designate the distribution as a distribution of
Excess Deferred Compensation.
Matching contributions which relate to Excess Deferred
Compensation which is distributed pursuant to this Section 4.2(f)
shall be forfeited.
(g) Notwithstanding Section 4.2(f) above, a Participant's
Excess Deferred Compensation shall be reduced, but not below zero, by
any distribution of Excess Contributions pursuant to Section 4.6(a)
for the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section
may be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate, or other
short-term debt security acceptable to the Trustee until such time as
the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the salary
reduction elections provided for herein in accordance with the
following:
(1) A Participant may commence making elective deferrals to the
Plan only after first satisfying the eligibility and
participation requirements specified in Article III. However, the
Participant must make his initial salary deferral election within
a reasonable time, not to exceed thirty (30) days, after entering
the Plan pursuant to Section 3.3. If the Participant fails to
make an initial salary deferral election within such time, then
such Participant may thereafter make an election in accordance
with the rules governing modifications. The Participant shall
make such an election by entering into a written salary reduction
agreement with the Employer and filing such agreement with the
Administrator. Such election
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shall initially be effective beginning with the pay period
following the acceptance of the salary reduction agreement by the
Administrator, shall not have retroactive effect and shall remain
in force until revoked.
(2) A Participant may modify a prior election at any time during
the Plan Year and concurrently make a new election by filing a
written notice with the Administrator within a reasonable time
before the pay period for which such modification is to be
effective. Any modification shall not have retroactive effect and
shall remain in force until revoked.
(3) A Participant may elect to prospectively revoke his salary
reduction agreement in its entirety at any time during the Plan
Year by providing the Administrator with thirty (30) days written
notice of such revocation (or upon such shorter notice period as
may be acceptable to the Administrator). Such revocation shall
become effective as of the beginning of the first pay period
coincident with or next following the expiration of the notice
period. Furthermore, the termination of the Participant's
employment, or the cessation of participation for any reason,
shall be deemed to revoke any salary reduction agreement then in
effect, effective immediately following the close of the pay
period within which such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including extensions
of time, for the filing of the Employer's federal income tax return for the
Fiscal Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer's general assets,
but in any event within ninety (90) days from the date on which such amounts
would otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
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later than the twelve-month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall credit
as of each Anniversary Date all amounts allocated to each such
Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contributions for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) With respect to the Employer's Elective Contribution made
pursuant to Section 4.1(a), to each Participant's Elective
Account in an amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 4.1(b), to each Participant's Account in
accordance with Section 4.1(b).
Any Participant actively employed during the Plan Year shall be
eligible to share in the matching contribution for the Plan Year.
(3) With respect to the Employer's Non-Elective Contribution made
pursuant to Section 4.1(c), to each Participant's Account in the
same proportion that each such Participant's Compensation for the
year bears to the total Compensation of all Participants for such
year.
Only Participants who have completed a Year of Service during the
Plan Year and are actively employed on the last day of the Plan
Year shall be eligible to share in the discretionary contribution
for the year.
(c) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made
available to reinstate
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previously forfeited account balances of Former Participants, if any,
in accordance with Section 6.4(g)(2). The remaining Forfeitures, if
any, shall be allocated to Participants' Accounts in the following
manner:
(1) Forfeitures attributable to Employer matching contributions
made pursuant to Section 4.1(b) shall be allocated among the
Participants' Accounts in the same proportion that each such
Participant's Compensation for the year bears to the total
Compensation of all Participants for the year.
Except, however, Participants who are not eligible to share in
matching contributions (whether or not a deferral election was
made or suspended pursuant to Section 4.2(e)) for a Plan Year
shall not share in Plan Forfeitures attributable to Employer
matching contributions for that year.
(2) Forfeitures attributable to Employer discretionary
contributions made pursuant to Section 4.1(c) shall be added to
the Employer's discretionary contribution for the Plan Year in
which such Forfeitures occur and allocated among the
Participants' Accounts in the same manner as the Employer's
discretionary contributions.
Provided, however, that in the event the allocation of
Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.9) to any Participant's Account to exceed
the amount allowable by the Code, the excess shall be reallocated
in accordance with Section 4.10.
(d) For any Top Heavy Plan Year, Employees not otherwise eligible
to share in the allocation of contributions and Forfeitures as
provided above, shall receive the minimum allocation provided for in
Section 4.4(h) if eligible pursuant to the provisions of Section
4.4(j).
(e) Notwithstanding the foregoing, Participants who are not
actively employed on the last day of the Plan Year due to Retirement
(Early, Normal or Late), Total and Permanent Disability or death shall
not share in the allocation of contributions and Forfeitures for that
Plan Year.
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(f) As of each Anniversary Date or other valuation date, before
the current valuation period allocation of Employer contributions
account balance, any earnings or losses (net appreciation or net
depreciation) of the Trust Fund shall be allocated in the same
proportion that each Participant's and Former Participant's
nonsegregated accounts bear to the total of all Participants' and
Former Participants' nonsegregated accounts as of such date.
Participants' transfers from other qualified plans deposited in
the general Trust Fund shall share in any earnings and losses (net
appreciation or net depreciation) of the Trust Fund in the same manner
provided above. Each segregated account maintained on behalf of a
Participant shall be credited or charged with its separate earnings
and losses.
(g) Participants' accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends
received on insurance contracts.
(h) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of
the Employer's contributions and Forfeitures allocated to the
Participant's Combined Account of each Employee shall be equal to at
least three percent (3%) of such Employee's "415 Compensation"
(reduced by contributions and forfeitures, if any, allocated to each
Employee in any defined contribution plan included with this plan in a
Required Aggregation Group). However, if (1) the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is less than
three percent (38) of each Key Employee's "415 Compensation" and (2)
this Plan is not required to be included in an Aggregation Group to
enable a defined benefit plan to meet the requirements of Code Section
401(a)(4) or 410, the sum of the Employer's contributions and
Forfeitures allocated to the Participant's Combined Account of each
Employee shall be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However, in
determining whether a Non-Key Employee has received the required
minimum allocation, such Non-Key Employee's Deferred Compensation and
matching contributions needed to satisfy the "Actual Contribution
Percentage" tests pursuant to Section
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4.7(a) shall not be taken into account.
However, no such minimum allocation shall be required in this
Plan for any Employee who participates in another defined contribution
plan subject to Code Section 412 providing such benefits included with
this Plan in a Required Aggregation Group.
(i) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any Key
Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(j) For any Top Heavy Plan Year, the minimum allocations set
forth above shall be allocated to the Participant's Combined Account
of all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
(k) For the purposes of this Section, "415 Compensation" shall be
limited to $200,000. Such amount shall be adjusted at the same time
and in the same manner as permitted under Code Section 415(d), except
that the dollar increase in effect on January 1 of any calendar year
shall be effective for the Plan Year beginning with or within such
calendar year and the first adjustment to the $200,000 limitation
shall be effective on January 1, 1990. For any short Plan Year the
"415 Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12).
(l) Notwithstanding anything herein to the contrary, Participants
who terminated employment for any reason during the Plan Year shall
share in the salary reduction contributions made by the Employer for
the year of termination without regard to the Hours of Service
credited.
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(m) If a Former Participant is reemployed after five (5)
consecutive l-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits attributable to pre-
break service; and
(2) one account representing his status in the Plan attributable
to post-break service.
(n) Notwithstanding anything to the contrary, if this is a Plan
that would otherwise fail to meet the requirements of Code Sections
401(a)(26), 410(b)(1) or 410(b)(2)(A)(i) and the Regulations
thereunder because Employer contributions would not be allocated to a
sufficient number or percentage of Participants for a Plan Year, then
the following rules shall apply:
(1) The group of Participants eligible to share in the Employer's
contribution and Forfeitures for the Plan Year shall be expanded
to include the minimum number of Participants who would not
otherwise be eligible as are necessary to satisfy the applicable
test specified above. The specific Participants who shall become
eligible under the terms of this paragraph shall be those who are
actively employed on the last day of the Plan Year and, when
compared to similarly situated Participants, have completed the
greatest number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the applicable
test is still not satisfied, then the group of Participants
eligible to share in the Employer's contribution and Forfeitures
for the Plan Year shall be further expanded to include the
minimum number of Participants who are not actively employed on
the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become
eligible to share shall be those Participants, when compared to
similarly situated Participants, who have completed the greatest
number of Hours of Service in the Plan Year before terminating
employment.
(3) Nothing in this Section shall permit the reduction of a
Participant's accrued benefit. Therefore any amounts that have
previously been
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allocated to Participants may not be reallocated to satisfy these
requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected
Participants would have received had they been included in the
allocations, even if it exceeds the amount which would be
deductible under Code Section 404. Any adjustment to the
allocations pursuant to this paragraph shall be considered a
retroactive amendment adopted by the last day of the Plan Year.
(4) Notwithstanding the foregoing, for any Top Heavy Plan Year
beginning after December 31, 1992, if the portion of the Plan
which is not a Code Section 401(k) or 401(m) plan would fail to
satisfy Code Section 410(b) if the coverage tests were applied by
treating those Participants whose only allocation (under such
portion of the Plan) would otherwise be provided under the-top
heavy formula as if they were not currently benefiting under the
Plan, then, for purposes of this Section 4.4(n), such
Participants shall be treated as not benefiting and shall
therefore be eligible to be included in the expanded class of
Participants who will share in the allocation provided under the
Plan's non top heavy formula.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer Elective Contributions to a
Participant's Elective Account shall satisfy one of the following
tests:
(1) The "Actual Deferral Percentage" for the Highly Compensated
Participant group shall not be more than the "Actual Deferral
Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for the Highly
Compensated Participant group over the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual
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Deferral Percentage" for the Highly Compensated Participant group
shall not exceed the "Actual Deferral Percentage" for the Non-
Highly Compensated Participant group multiplied by 2. The
provisions of Code Section 401(k)(3) and Regulation 1.401(k)-l(b)
are incorporated herein by reference.
However, in order to prevent the multiple use of the alternative
method described in (2) above and in Code Section 401(m)(9)(A),
any Highly Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 and to make Employee
contributions or to receive matching contributions under this
Plan or under any other plan maintained by the Employer or an
Affiliated Employer shall have his actual contribution ratio
reduced pursuant to Regulation 1.401(m)-2, the provisions of
which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group for a Plan Year, the average
of the ratios, calculated separately for each Participant in such
group, of the amount of Employer Elective Contributions allocated to
each Participant's Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The actual
deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest one-
hundredth of one percent. Employer Elective Contributions allocated to
each Non-Highly Compensated Participant's Elective Account shall be
reduced by Excess Deferred Compensation to the extent such excess
amounts are made under this Plan or any other plan maintained by the
Employer.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant
is either a "five percent owner" of the Employer or one of the ten
(10) Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual deferral ratio for the family group
(which shall be treated as one Highly Compensated Participant)
shall be
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determined by aggregating Employer Elective Contributions and
"414(s) Compensation" of all eligible Family Members (including
Highly Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation", Family Members shall
include only the affected Employee's spouse and any lineal
descendants who have not attained age 19 before the close of the
Plan Year.
(2) The Employer Elective Contributions and "414(s) Compensation"
of all Family Members shall be disregarded for purposes of
determining the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into
account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are
members of those family groups that include the Participant are
aggregated as one family group in accordance with paragraphs (1)
and (2) above.
(d) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to make a deferral election pursuant to
Section 4.2, whether or not such deferral election was made or
suspended pursuant to Section 4.2.
(e) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more plans which include cash or deferred
arrangements are considered one plan for the purposes of Code Section
401(a)(4) or 410(b) (other than Code Section 410(b)(2)(A)(ii)), the
cash or deferred arrangements included in such plans shall be treated
as one arrangement. In addition, two or more cash or deferred
arrangements may be considered as a single arrangement for purposes of
determining whether or not such arrangements satisfy Code Sections
401(a)(4), 410(b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including such
arrangements shall be treated as one arrangement and as one plan for
purposes of this Section and Code Sections 401(a)(4), 410(b) and
401(k). Plans may be aggregated under this paragraph (e) for Plan
Years beginning after December 31, 1988 only if they have the same
plan year.
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Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be combined with
this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is part
of an employee stock ownership plan as defined in Code Section
4975(e)(7) or 409) of the Employer or an Affiliated Employer, all such
cash or deferred arrangements shall be treated as one cash or deferred
arrangement for the purpose of determining the actual deferral ratio
with respect to such Highly Compensated Participant. However, if the
cash or deferred arrangements have different plan years, this
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a single
arrangement.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's Elective
Contributions made pursuant to Section 4.4 do not satisfy one of the tests set
forth in Section 4.5(a), the Administrator shall adjust Excess Contributions
pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Participant having
the highest actual deferral ratio shall have his portion of Excess
Contributions distributed to him until one of the tests set forth in
Section 4.5(a) is satisfied, or until his actual deferral ratio equals
the actual deferral ratio of the Highly Compensated Participant having
the second highest actual deferral ratio. This process shall continue
until one of the tests set forth in Section 4.5(a) is satisfied. For
each Highly Compensated Participant, the amount of Excess
Contributions is equal to the Elective Contributions on behalf of such
Highly Compensated Participant (determined prior to the application of
this paragraph) minus the amount determined by multiplying the Highly
Compensated Participant's actual deferral ratio (determined after
application of this paragraph) by his "414(s)
44
<PAGE>
Compensation". However, in determining the amount of Excess
Contributions to be distributed with respect to an affected Highly
Compensated Participant as determined herein, such amount shall be
reduced by any Excess Deferred Compensation previously distributed to
such affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year.
(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of the
Plan Year following the Plan Year to which they are
allocable;
(ii) shall cause matching contributions which relate to such
Deferred Compensation to be forfeited;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a distribution
of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of Excess
Contributions shall be treated as a pro rata distribution of
Excess Contributions and Income.
(3) The determination and correction of Excess Contributions of a
Highly Compensated Participant whose actual deferral ratio is
determined under the family aggregation rules shall be
accomplished by reducing the actual deferral ratio as required
herein, and the Excess Contributions for the family unit shall
then be allocated among the Family Members in proportion to the
Elective Contributions of each Family Member that were combined
to determine the group actual deferral ratio.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer may make a special Qualified NonElective Contribution on
behalf of Non-Highly Compensated Participants in an amount sufficient
to satisfy one of the tests set forth in Section 4.5(a). Such
contribution shall be allocated to
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the Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
(c) If during a Plan Year the projected aggregate amount of
Elective Contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.5(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the order
provided in Section 4.6(a) each affected Highly Compensated
Participant's deferral election made pursuant to Section 4.2 by an
amount necessary to satisfy one of the tests set forth in Section
4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly
Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly Compensated
Participant group; or
(2) the lesser of 200 percent of such percentage for the Non-
Highly Compensated Participant group, or such percentage for the
Non-Highly Compensated Participant group plus 2 percentage
points. However, to prevent the multiple use of the alternative
method described in this paragraph and Code Section 401(m)(9)(A),
any Highly Compensated Participant eligible to make elective
deferrals pursuant to Section 4.2 or any other cash or deferred
arrangement maintained by the Employer or an Affiliated Employer
and to make Employee contributions or to receive matching
contributions under this Plan or under any other plan maintained
by the Employer or an Affiliated Employer shall have his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2. The
provisions of Code Section 401(m) and Regulations 1.401(m)-l(b)
and 1.401(m)-2 are incorporated herein by reference.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year
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means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group, the average of the ratios
(calculated separately for each Participant in each group) of:
(1) the sum of Employer matching contributions made pursuant to
Section 4.1(b) on behalf of each such Participant for such Plan
Year; to
(2) the Participant's "414(s) Compensation" for such Plan Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant
to Section 4.8(d), only Employer matching contributions (excluding
Employer matching contributions forfeited pursuant to Sections 4.2(f)
and 4.6(a)(1) or forfeited pursuant to Section 4.8(a)) contributed to
the Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer matching
contributions pursuant to Section 4.1(b) allocated to their accounts,
elective deferrals (as defined in Regulation 1.402(g)-l(b)) and
qualified non-elective contributions (as defined in Code Section
401(m)(4)(C)) contributed to any plan maintained by the Employer. Such
elective deferrals and qualified non-elective contributions shall be
treated as Employer matching contributions subject to Regulation
1.401(m)-l(b)(5) which is incorporated herein by reference. However,
the Plan Year must be the same as the plan year of the plan to which
the elective deferrals and the qualified nonelective contributions are
made.
(d) For the purpose of determining the actual contribution ratio
of a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Employee is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual contribution ratio for the family group
(which shall be treated as one Highly Compensated Participant)
shall be
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<PAGE>
determined by aggregating Employer matching contributions made
pursuant to Section 4.1(b) and "414(s) Compensation" of all
eligible Family Members (including Highly Compensated
Participants). However, in applying the $200,000 limit to "414(s)
Compensation", Family Members shall include only the affected
Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer matching contributions made pursuant to Section
4.1(b) and "414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual Contribution
Percentage" of the Non-Highly Compensated Participant group
except to the extent taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a member of
more than one family group in a plan, all Participants who are
members of those family groups that include the Participant are
aggregated as one family group in accordance with paragraphs (1)
and (2) above.
(e) For purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(m), if two or more plans of the Employer to which
matching contributions, Employee contributions, or both, are made are
treated as one plan for purposes of Code Sections 401(a)(4) or 410(b)
(other than the average benefits test under Code Section
410(b)(2)(A)(ii)), such plans shall be treated as one plan. In
addition, two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made may be
considered as a single plan for purposes of determining whether or not
such plans satisfy Code Sections 401(a)(4), 410(b) and 401(m). In such
a case, the aggregated plans must satisfy this Section and Code
Sections 401(a)(4), 410(b) and 401(m) as though such aggregated plans
were a single plan. Plans may be aggregated under this paragraph (e)
only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan
described in Code Section 4975(e)(7) or 409 may not be aggregated with
this Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(m).
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(f) If a Highly Compensated Participant is a Participant under
two or more plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409) which are maintained by the
Employer or an Affiliated Employer to which matching contributions,
Employee contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be aggregated for
purposes of determining such Highly Compensated Participant's actual
contribution ratio. However, if the plans have different plan years,
this paragraph shall be applied by treating all plans ending with or
within the same calendar year as a single plan.
(g) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions pursuant to
Section 4.1(b) (whether or not a deferral election was made or
suspended pursuant to Section 4.2(e)) allocated to his account for the
Plan Year.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that the "Actual Contribution Percentage" for
the Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group pursuant to Section 4.7(a), the Administrator (on or before the
fifteenth day of the third month following the end of the Plan Year,
but in no event later than the close of the following Plan Year) shall
direct the Trustee to distribute to the Highly Compensated Participant
having the highest actual contribution ratio, his Vested portion of
Excess Aggregate Contributions (and Income allocable to such
contributions) and, if forfeitable, forfeit such non-Vested Excess
Aggregate Contributions attributable to Employer matching
contributions (and Income allocable to such forfeitures) until either
one of the tests set forth in Section 4.7(a) is satisfied, or until
his actual contribution ratio equals the actual contribution ratio of
the Highly Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of the tests
set forth in Section 4.7(a) is satisfied.
(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate
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Contributions (and Income) shall be treated as a pro rata distribution
and/or forfeiture of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be designated by
the Employer as a distribution of Excess Aggregate Contributions (and
Income). Forfeitures of Excess Aggregate Contributions shall be
treated in accordance with Section 4.4. However, no such forfeiture
may be allocated to a Highly Compensated Participant whose
contributions are reduced pursuant to this Section.
(c) Excess Aggregate Contributions, including forfeited matching
contributions, shall be treated as Employer contributions for purposes
of Code Sections 404 and 415 even if distributed from the Plan.
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated and
for the Participants from whose Accounts they are forfeited.
(d) For each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the Employer matching
contributions made pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into account
pursuant to Section 4.7(c) on behalf of the Highly Compensated
Participant (determined prior to the application of this paragraph)
minus the amount determined by multiplying the Highly Compensated
Participant's actual contribution ratio (determined after application
of this paragraph) by his "414(s) Compensation". The actual
contribution ratio must be rounded to the nearest one-hundredth of one
percent. In no case shall the amount of Excess Aggregate Contribution
with respect to any Highly Compensated Participant exceed the amount
of Employer matching contributions made pursuant to Section 4.1(b) and
any qualified non-elective contributions or elective deferrals taken
into account pursuant to Section 4.7(c) on behalf of such Highly
Compensated Participant for such Plan Year.
(e) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess
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Contributions, if any, to be treated as voluntary Employee
contributions due to recharacterization for the plan year of any other
qualified cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within the Plan
Year.
(f) If the determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules,
then the actual contribution ratio shall be reduced and the Excess
Aggregate Contributions for the family unit shall be allocated among
the Family Members in proportion to the sum of Employer matching
contributions made pursuant to Section 4.1(b) and any qualified non-
elective contributions or elective deferrals taken into account
pursuant to Section 4.7(c) of each Family Member that were combined to
determine the group actual contribution ratio.
(g) If during a Plan Year the projected aggregate amount of
Employer matching contributions to be allocated to all Highly
Compensated Participants under this Plan would, by virtue of the tests
set forth in Section 4.7(a), cause the Plan to fail such tests, then
the Administrator may automatically reduce proportionately or in the
order provided in Section 4.8(a) each affected Highly Compensated
Participant's projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in Section 4.7(a).
(h) Notwithstanding the above, within twelve (12) months after
the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set
forth in Section 4.7(a). Such contribution shall be allocated to the
Participant's Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants. A separate
accounting shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests pursuant to
Section 4.5(a).
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4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall
equal the lesser of: (1) $30,000 (or, if greater, one-fourth of the
dollar limitation in effect under Code Section 415(b)(1)(A)) or (2)
twenty-five percent (25%) of the Participant's "415 Compensation" for
such "limitation year". For any short "limitation year", the dollar
limitation in (1) above shall be reduced by a fraction, the numerator
of which is the number of full months in the short "limitation year"
and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's accounts
for any "limitation year" of (1) Employer contributions, (2) Employee
contributions, (3) forfeitures, (4) amounts allocated, after March 31,
1984, to an individual medical account, as defined in Code Section
415(1)(2) which is part of a pension or annuity plan maintained by the
Employer and (5) 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 (as defined in Code Section
419A(d)(3)) under a welfare benefit plan (as defined in Code Section
419(e)) maintained by the Employer. Except, however, the "415
Compensation" percentage limitation referred to in paragraph (a)(2)
above shall not apply to: (1) any contribution for medical benefits
(within the meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition", or (2) any
amount otherwise treated as an "annual addition" under Code Section
415(1)(1).
(c) For purposes of applying the limitations of Code Section 415,
the transfer of funds from one qualified plan to another is not an
"annual addition". In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
403(b)(8) and 408(d)(3)), (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received by
an Employee pursuant to Code Section 411(a)(7)(B)
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(cash-outs); (4) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(3)(D) (mandatory contributions); and
(5) Employee contributions to a simplified employee pension excludable
from gross income under Code Section 408(k)(6).
(d) For purposes of applying the limitations of Code Section 415,
the "limitation year" shall be the Plan Year.
(e) The dollar limitation under Code Section 415(b)(1)(A) stated
in paragraph (a)(l) above shall be adjusted annually as provided in
Code Section 415(d) pursuant to the Regulations. The adjusted
limitation is effective as of January 1st of each calendar year and is
applicable to "limitation years" ending with or within that calendar
year.
(f) For the purpose of this Section, all qualified defined
benefit plans (whether terminated or not) ever maintained by the
Employer shall be treated as one defined benefit plan, and all
qualified defined contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
contribution plan.
(g) For the purpose of this Section, if the Employer is a member
of a controlled group of corporations, trades or businesses under
common control (as defined by Code Section 1563(a) or Code Section
414(b) and (c) as modified by Code Section 415(h)), is a member of an
affiliated service group (as defined by Code Section 414(m)), or is a
member of a group of entities required to be aggregated pursuant to
Regulations under Code Section 414(o), all Employees of such Employers
shall be considered to be employed by a single Employer.
(h) For the purpose of this Section, if this Plan is a Code
Section 413(c) plan, all Employers of a Participant who maintain this
Plan will be considered to be a single Employer.
(i)(l) If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation
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year" minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year".
(2) If a Participant participates in both a defined contribution
plan subject to Code Section 412 and a defined contribution plan
not subject to Code Section 412 maintained by the Employer which
have the same Anniversary Date, "annual additions" will be
credited to the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior to crediting
"annual additions" to the Participant's accounts under the
defined contribution plan not subject to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412 maintained by
the Employer which have the same Anniversary Date, the maximum
"annual additions" under this Plan shall equal the product of (A)
the maximum "annual additions" for the "limitation year" minus
any "annual additions" previously credited under subparagraphs
(1) or (2) above, multiplied by (B) a fraction (i) the numerator
of which is the "annual additions" which would be credited to
such Participant's accounts under this Plan without regard to the
limitations of Code Section 415 and (ii) the denominator of which
is such "annual additions" for all plans described in this
subparagraph.
(j) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans
maintained by the Employer, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(k) The defined benefit plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all the defined benefit plans (whether
or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined
for the "limitation year" under Code Sections 415(b) and (d) or 140
percent of the highest average compensation, including any adjustments
under Code Section 415(b).
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Notwithstanding the above, if the Participant was a
Participant as of the first day of the first "limitation year"
beginning after December 31, 1986, in one or more defined benefit
plans maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125
percent of the sum of the annual benefits under such plans which the
Participant had accrued as of the close of the last "limitation year"
beginning before January 1, 1987, disregarding any changes in the
terms and conditions of the plan after May 5, 1986. The preceding
sentence applies only if the defined benefit plans individually and in
the aggregate satisfied the requirements of Code Section 415 for all
"limitation years" beginning before January 1, 1987.
(l) The defined contribution plan fraction for any "limitation
year" is a fraction, the numerator of which is the sum of the annual
additions to the Participant's Account under all the defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior "limitation years" (including
the annual additions attributable to the Participant's nondeductible
Employee contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in Code Section
415(1)(2), maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current and all
prior "limitation years" of service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer).
The maximum aggregate amount in any "limitation year" is the lesser of
125 percent of the dollar limitation determined under Code Sections
415(b) and (d) in effect under Code Section 415(c)(1)(A) or 35 percent
of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first
day of the first "limitation year" beginning after December 31, 1986,
in one or more defined contribution plans maintained by the Employer
which were in existence on May 6, 1986, the numerator of this fraction
will be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this Plan.
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Under the adjustment, an amount equal to the product of (1) the excess
of the sum of the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they
would be computed as of the end of the last "limitation year"
beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 5, 1986, but using the
Code Section 415 limitation applicable to the first "limitation year"
beginning on or after January 1, 1987. The annual addition for any
"limitation year" beginning before January 1, 1987 shall not be
recomputed to treat all Employee contributions as annual additions.
(m) Notwithstanding the foregoing, for any "limitation year" in
which the Plan is a Top Heavy Plan, 100 percent shall be substituted
for 125 percent in Sections 4.9(k) and 4.9(l) unless the extra minimum
allocation is being provided pursuant to Section 4.4. However, for any
"limitation year" in which the Plan is a Super Top Heavy Plan, 100
percent shall be substituted for 125 percent in any event.
(n) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's Compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.9 or other
facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause the
maximum "annual additions" to be exceeded for any Participant, the
Administrator shall (1) distribute any elective deferrals (within the
meaning of Code Section 402(g)(3)) or return any voluntary Employee
contributions credited for the "limitation year" to the extent that
the return would reduce the "excess amount"
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in the Participant's accounts (2) hold any "excess amount" remaining
after the return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) use the "Section
415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to reduce Employer contributions for
that Participant if that Participant is covered by the Plan as of the
end of the "limitation year", or if the Participant is not so covered,
allocate and reallocate the "Section 415 suspense account" in the next
"limitation year" (and succeeding "limitation years" if necessary) to
all Participants in the Plan Before any Employer or Employee
contributions which would constitute "annual additions" are made to
the Plan for such "limitation year" (4) reduce Employer contributions
to the Plan for such "limitation year" by the amount of the "Section
415 suspense account" allocated and reallocated during such
"limitation year".
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any, of
(1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitations of Code
Section 415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess amounts"
for all Participants in the Plan during the "limitation year". The
"Section 415 suspense account" shall not share in any earnings or
losses of the Trust Fund.
(d) The Plan may not distribute "excess amounts", other than
voluntary Employee contributions, to Participants or Former
Participants.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Participants, provided that
the trust from which such funds are transferred permits the transfer
to be made and the transfer will not jeopardize the tax exempt status
of the Plan or Trust or create adverse tax consequences for the
Employer. The amounts transferred shall be set up in a separate
account
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herein referred to as a "Participant's Rollover Account". Such
account shall be fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by
the Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(3)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)-l(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits,
the fair market value of the Participant's Rollover Account shall be
used to provide additional benefits to the Participant or his
Beneficiary. Any distributions of amounts held in a Participant's
Rollover Account shall be made in a manner which is consistent with
and satisfies the provisions of Section 6.5, including, but not
limited to, all notice and consent requirements of Code Section
411(a)(11) and the Regulations thereunder. Furthermore, such amounts
shall be considered as part of a Participant's benefit in determining
whether an involuntary cash-out of benefits without Participant
consent may be made.
(e) The Administrator may direct that employee transfers made
after a valuation date be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate, or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
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(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) lump-sum distributions received by an Employee from another
qualified plan which are eligible for tax free rollover to a qualified
plan and which are transferred by the Employee to this Plan within
sixty (60) days following his receipt thereof; (iii) amounts
transferred to this Plan from a conduit individual retirement account
provided that the conduit individual retirement account has no assets
other than assets which (A) were previously distributed to the
Employee by another qualified plan as a lump-sum distribution (B.)
were eligible for tax-free rollover to a qualified plan and (C) were
deposited in such conduit individual retirement account within sixty
(60) days of receipt thereof and other than earnings on said assets;
and (iv) amounts distributed to the Employee from a conduit individual
retirement account meeting the requirements of clause (iii) above, and
transferred by the Employee to this Plan within sixty (60) days of his
receipt thereof from such conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that
the amounts to be transferred to this Plan meet the requirements of
this Section and may also require the Employee to provide an opinion
of counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(h) This Plan shall not accept any direct or indirect transfers
(as that term is defined and interpreted under Code Section 401(a)(11)
and the Regulations thereunder) from a defined benefit plan, money
purchase plan (including a target benefit plan), stock bonus or profit
sharing plan which would otherwise have provided for a life annuity
form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it
will not result in the elimination or reduction of any "Section
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411(d)(6) protected benefit" as described in Section 8.1.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Anniversary Date,
and at such other date or dates deemed necessary by the Administrator, herein
called "valuation date", to determine the net worth of the assets comprising the
Trust Fund as it exists on the "valuation date." In determining such net worth,
the Trustee shall value the assets comprising the Trust Fund at their fair
market value as of the "valuation date" and shall deduct all expenses for which
the Trustee has not yet obtained reimbursement from the Employer or the Trust
Fund.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust Fund
which are listed on a registered stock exchange, the Administrator shall direct
the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the "valuation date". If such
securities were not traded on the "valuation date", or if the exchange on which
they are traded was not open for business on the "valuation date", then the
securities shall be valued at the prices at which they were last traded prior to
the "valuation date". Any unlisted security held in the Trust Fund shall be
valued at its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other than
securities for which trading or bid prices can be obtained, the Trustee may
appraise such assets itself, or in its discretion, employ one or more appraisers
for that purpose and rely on the values established by such appraiser or
appraisers.
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ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and retire
for the purposes hereof on his Normal Retirement Date or Early Retirement Date.
However, a Participant may postpone the termination of his employment with the
Employer to a later date, in which event the participation of such Participant
in the Plan, including the right to receive allocations pursuant to Section 4.4,
shall continue until his Late Retirement Date. Upon a Participant's Retirement
Date, or as soon thereafter as is practicable, the Trustee shall distribute all
amounts credited to such Participant's Combined Account in accordance with
Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct the Trustee, in accordance with the provisions of
Sections 6.6 and 6.7, to distribute any remaining Vested amounts
credited to the accounts of a deceased Former Participant to such
Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant
as the Administrator may deem desirable. The Administrator's
determination of death and of the right of any person to receive
payment shall be conclusive.
(d) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
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(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been abandoned
(within the meaning of local law) and the Participant has a court
order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may at
any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change with
the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily elected
to relinquish such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
(e) Any consent by the Participant's spouse to waive any rights
to the death benefit must be in writing, must acknowledge the effect
of such waiver, and be witnessed by a Plan representative or a notary
public. Further, the spouse's consent must be irrevocable and must
acknowledge the specific nonspouse Beneficiary.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability prior to his
Retirement Date or other termination of his employment, all amounts credited to
such Participant's Combined Account shall become fully Vested. In the event of a
Participant's Total and Permanent Disability, the Trustee, in accordance with
the provisions of Sections 6.5 and 6.7, shall distribute to such Participant all
amounts credited to such Participant's Combined Account as though he had
retired.
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6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date coinciding with or
subsequent to the termination of a Participant's employment for any
reason other than death, Total and Permanent Disability or retirement,
the Administrator may direct the Trustee to segregate the amount of
the Vested portion of such Terminated Participant's Combined Account
and invest the aggregate amount thereof in a separate, federally
insured savings account, certificate of deposit, common or collective
trust fund of a bank or a deferred annuity. In the event the Vested
portion of a Participant's Combined Account is not segregated, the
amount shall remain in a separate account for the Terminated
Participant and share in allocations pursuant to Section 4.4 until
such time as a distribution is made to the Terminated Participant.
In the event that the amount of the Vested portion of the
Terminated Participant's Combined Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so directed
by the Administrator and agreed to by the Terminated Participant,
shall assign, transfer, and set over to such Terminated Participant
all Contracts on his life in such form or with such endorsements so
that the settlement options and forms of payment are consistent with
the provisions of Section 6.5. In the event that the Terminated
Participant's Vested portion does not at least equal the fair market
value of the Contracts, if any, the Terminated Participant may pay
over to the Trustee the sum needed to make the distribution equal to
the value of the Contracts being assigned or transferred, or the
Trustee, pursuant to the Participant's election, may borrow the cash
value of the Contracts from the insurer so that the value of the
Contracts is equal to the Vested portion of the Terminated
Participant's Account and then assign the Contracts to the Terminated
Participant.
Distribution of the funds due to a Terminated Participant shall
be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of
the Employer (upon the Participant's death, Total and Permanent
Disability, Early or Normal Retirement). However, at the election of
the Participant, the Administrator shall direct the Trustee to cause
the
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entire Vested portion of the Terminated Participant's Combined
Account to be payable to such Terminated Participant 12 months after
termination of employment. Any distribution under this paragraph shall
be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Section 411(a)(11) and the
Regulations thereunder.
If the value of a Terminated Participant's Vested benefit derived
from Employer and Employee contributions does not exceed $3,500 and
has never exceeded $3,500 at the time of any prior distribution, the
Administrator shall direct the Trustee to cause the entire Vested
benefit to be paid to such Participant in a single lump sum.
For purposes of this Section 6.4, if the value of a Terminated
Participant's Vested benefit is zero, the Terminated Participant shall
be deemed to have received a distribution of such Vested benefit.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of
Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
Less than 3 0%
3 20%
4 40%
5 60%
6 80%
7 100%
(c) Notwithstanding the vesting provided for in paragraph (b)
above, for any Top Heavy Plan Year, the Vested portion of the
Participant's Account of any Participant who has an Hour of Service
after the Plan becomes top heavy shall be a percentage of the total
amount credited to his Participant's Account determined on the basis
of the Participant's number of Years of Service according to the
following schedule:
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Vesting Schedule
Years of Service Percentage
Less than 2 0%
2 20%
3 40%
4 60%
5 80%
6 100%
If in any subsequent Plan Year, the Plan ceases to be a Top Heavy
Plan, the Administrator shall revert to the vesting schedule in effect
before this Plan became a Top Heavy Plan. Any such reversion shall be
treated as a Plan amendment pursuant to the terms of the Plan.
(d) Notwithstanding the vesting schedule above, the Vested
percentage of a Participant's Account shall not be less than the
Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement.
(e) Notwithstanding the vesting schedule above, upon the complete
discontinuance of the Employer's contributions to the Plan or upon any
full or partial termination of the Plan, all amounts credited to the
account of any affected Participant shall become 100% Vested and shall
not thereafter be subject to Forfeiture.
(f) The computation of a Participant's nonforfeitable percentage
of his interest in the Plan shall not be reduced as the result of any
direct or indirect amendment to this Plan. For this purpose, the Plan
shall be treated as having been amended if the Plan provides for an
automatic change in vesting due to a change in top heavy status. In
the event that the Plan is amended to change or modify any vesting
schedule, a Participant with at least three (3) Years of Service as of
the expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to
such amendment. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of
the amendment and shall end 60 days after the latest of:
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(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(g)(l) If any Former Participant shall be reemployed by the
Employer before a l-Year Break in Service occurs, he shall continue to
participate in the Plan in the same manner as if such termination had
not occurred.
(2) If any Former Participant shall be reemployed by the Employer
before five (5) consecutive l-Year Breaks in Service, and such
Former Participant had received, or was deemed to have received, a
distribution of his entire Vested interest prior to his
reemployment, his forfeited account shall be reinstated only if he
repays the full amount distributed to him before the earlier of
five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first
period of five (5) consecutive l-Year Breaks in Service commencing
after the distribution, or in the event of a deemed distribution,
upon the reemployment of such Former Participant. In the event the
Former Participant does repay the full amount distributed to him,
or in the event of a deemed distribution, the undistributed
portion of the Participant's Account must be restored in full,
unadjusted by any gains or losses occurring subsequent to the
Anniversary Date or other valuation date coinciding with or
preceding his termination. The source for such reinstatement shall
first be any Forfeitures occurring during the year. If such source
is insufficient, then the Employer shall contribute an amount
which is sufficient to restore any such forfeited Accounts
provided, however, that if a discretionary contribution is made
for such year pursuant to Section 4.1(c), such contribution shall
first be applied to restore any such Accounts and the remainder
shall be allocated in accordance with Section 4.4.
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(3) If any Former Participant is reemployed after a l-Year Break
in Service has occurred, Years of Service shall include Years of
Service prior to his l-Year Break in Service subject to the
following rules:
(i) If a Former Participant has a l-Year Break in Service,
his pre-break and postbreak service shall be used for
computing Years of Service for eligibility and for vesting
purposes only after he has been employed for one (1) Year of
Service following the date of his reemployment with the
Employer;
(ii) Any Former Participant who under the Plan does not have
a nonforfeitable right to any interest in the Plan resulting
from Employer contributions shall lose credits otherwise
allowable under (i) above if his consecutive l-Year Breaks
in Service equal or exceed the greater of (A) five (5) or
(B) the aggregate number of his pre-break Years of Service;
(iii) After five (5) consecutive l-Year Breaks in Service, a
Former Participant's Vested Account balance attributable to
prebreak service shall not be increased as a result of post-
break service;
(iv) If a Former Participant who has not had his Years of
Service before a l-Year Break in Service disregarded
pursuant to (ii) above completes one (1) Year of Service for
eligibility purposes following his reemployment with the
Employer, he shall participate in the Plan retroactively
from his date of reemployment;
(v) If a Former Participant who has not had his Years of
Service before a l-Year Break in Service disregarded
pursuant to (ii) above completes a Year of Service (a l-Year
Break in Service previously occurred, but employment had not
terminated), he shall participate in the Plan retroactively
from the first day of the Plan Year during which he
completes one (1) Year of Service.
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6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount to which he is entitled under the Plan
in one lump-sum payment in cash.
(b) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded, $3,500 at the time of any prior
distribution shall require such Participant's consent if such
distribution occurs prior to the later of his Normal Retirement Age or
age 62. With regard to this required consent:
(1) The Participant must be informed of his right to defer receipt
of the distribution. If a Participant fails to consent, it shall
be deemed an election to defer the distribution of any benefit.
However, any election to defer the receipt of benefits shall not
apply with respect to distributions which are required under
Section 6.5(c).
(2) Notice of the rights specified under this paragraph shall be
provided no less than 30 days and no more than 90 days before the
first day on which all events have occurred which entitle the
Participant to such benefit.
(3) Written consent of the Participant to the distribution must
not be made before the Participant receives the notice and must
not be made more than 90 days before the first day on which all
events have occurred which entitle the Participant to such
benefit.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not consent to
the distribution.
(c) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits shall be made in accordance
with the following requirements and shall otherwise comply with Code
Section 401(a)(9) and the Regulations thereunder (including Regulation
1.401(a)(9)-2), the provisions of which are incorporated herein by
reference:
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(1) A Participant's benefits shall be distributed to him not later
than April 1st of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70 1/2 or (ii)
the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during
the five (5) Plan Year period ending in the calendar year in which
he attains age 70 1/2 or, in the case of a Participant who becomes
a "five (5) percent owner" during any subsequent Plan Year, clause
(ii) shall no longer apply and the required beginning date shall
be the April 1st of the calendar year following the calendar year
in which such subsequent Plan Year ends. Notwithstanding the
foregoing, clause (ii) above shall not apply to any Participant
unless the Participant had attained age 70 1/2 before January 1,
1988 and was not a "five (5) percent owner" at any time during the
Plan Year ending with or within the calendar year in which the
Participant attained age 66 1/2 or any subsequent Plan Year.
(2) Distributions to a Participant and his Beneficiaries shall
only be made in accordance with the incidental death benefit
requirements of Code Section 401(a)(9)(G) and the Regulations
thereunder.
(d) All annuity Contracts under this Plan shall be non-
transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall
comply with all of the requirements of the Plan.
(e) If a distribution is made at a time when a Participant is not
fully Vested in his Participant's Account (employment has not
terminated) and the Participant may increase the Vested percentage in
such account:
(1) a separate account shall be established for the Participant's
interest in the Plan as of the time of the distribution; and
(2) at any relevant time, the Participant's Vested portion of the
separate account shall be
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equal to an amount ("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested percentage
at the relevant time, AB is the account balance at the relevant
time, D is the amount of distribution, and R is the ratio of the
account balance at the relevant time to the account balance after
distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in cash
subject to the rules of Section 6.6(b).
(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Regulations thereunder. If it is
determined pursuant to Regulations that the distribution of a
Participant's interest has begun and the Participant dies before his
entire interest has been distributed to him, the remaining portion of
such interest shall be distributed at least as rapidly as under the
method of distribution selected pursuant to Section 6.5 as of his date
of death. If a Participant dies before he has begun to receive any
distributions of his interest under the Plan or before distributions
are deemed to have begun pursuant to Regulations, then his death
benefit shall be distributed to his Beneficiaries by December 31st of
the calendar year in which the fifth anniversary of his date of death
occurs.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is to make a
distribution on or as of an Anniversary Date, the distribution may be made on
such date or as soon thereafter as is practicable. However, unless a Former
Participant elects in writing to defer the receipt of benefits (such election
may not result in a death benefit that is more than incidental), the payment of
benefits shall occur not later than the 60th day after the close of the Plan
Year in which the latest of the following events occurs: (a) the date on which
the
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Participant attains the earlier of age 65 or the Normal Retirement Age
specified herein; (b) the 10th anniversary of the year in which the Participant
commenced participation in the Plan; or (c) the date the Participant terminates
his service with the Employer.
6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the Administrator
may direct that such distribution be paid to the legal guardian, or if none, to
a parent of such Beneficiary or a responsible adult with whom the Beneficiary
maintains his residence, or to the custodian for such Beneficiary under the
Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the
laws of the state in which said Beneficiary resides. Such a payment to the legal
guardian, custodian or parent of a minor Beneficiary shall fully discharge the
Trustee, Employer, and Plan from further liability on account thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable to a
Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored.
6.10 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a Participant in
this Plan shall be subject to the rights afforded to any "alternate payee" under
a "qualified domestic relations order." Furthermore, a distribution to an
"alternate payee" shall be permitted if such distribution is authorized by a
"qualified domestic relations order," even if the affected Participant has not
separated from service and has not reached the "earliest retirement age" under
the Plan. For the purposes of this Section, "alternate payee," "qualified
domestic relations order" and "earliest retirement age" shall have the meaning
set forth under Code Section 414(p).
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ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of responsibilities:
(a) Consistent with the "funding policy and method" determined by
the Employer, to invest, manage, and control the Plan assets subject,
however, to the direction of an Investment Manager if the Trustee
should appoint such manager as to all or a portion of the assets of
the Plan;
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event
of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and furnish
to the Employer and/or Administrator for each Plan Year a written
annual report per Section 7.6; and
(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to
sign papers on their behalf.
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep
the Trust Fund invested without distinction between principal and
income and in such securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not
limited to, stocks, common or preferred, bonds and other evidences of
indebtedness or ownership, and real estate or any interest therein.
The Trustee shall at all times in making investments of the Trust Fund
consider, among other factors, the short and long-term financial needs
of the Plan on the basis of information furnished by the Employer. In
making such investments, the Trustee shall not be restricted to
securities or other property of the character expressly authorized by
the applicable law for trust investments; however, the Trustee shall
give due regard to any limitations imposed by the Code or the Act so
that at
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all times the Plan may qualify as a qualified Profit Sharing
Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under which
the duties of such bank or trust company shall be of a custodial,
clerical and record-keeping nature.
(c) The Trustee, at the direction of the Administrator, shall
ratably apply for, own, and pay premiums on Contracts on the lives of
the Participants. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for ordinary life insurance for
each Participant must be less than 50% of the aggregate of the
contributions and Forfeitures to the credit of the Participant at any
particular time. If term insurance is purchased with such
contributions, the aggregate premium must be less than 25% of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. If both term insurance and ordinary life insurance
are purchased with such contributions, the amount expended for term
insurance plus one-half of the premium for ordinary life insurance may
not in the aggregate exceed 25% of the aggregate contributions and
Forfeitures allocated to a Participant's Combined Account. The Trustee
must convert the entire value of the life insurance contracts at or
before retirement into cash or provide for a periodic income so that
no portion of such value may be used to continue life insurance
protection beyond retirement, or distribute the Contracts to the
Participant. In the event of any conflict between the terms of this
Plan and the terms of any insurance Contract purchased hereunder, the
Plan provisions shall control.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common law,
statutory authority, including the Act, and other provisions of the Plan, shall
have the following powers and authorities, to be exercised in the Trustee's sole
discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
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(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without power
of substitution; to exercise any conversion privileges, subscription
rights or other options, and to make any payments incidental thereto;
to oppose, or to consent to, or otherwise participate in, corporate
reorganizations or other changes affecting corporate securities, and
to delegate discretionary powers, and to pay any assessments or
charges in connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities, or other
property;
(d) To cause any securities or other property to be registered in
the Trustee's own name or in the name of one or more of the Trustee's
nominees, and to hold any investments in bearer form, but the books
and records of the Trustee shall at all times show that all such
investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee shall deem
advisable; and for any sum so borrowed, to issue a promissory note as
Trustee, and to secure the repayment thereof by pledging all, or any
part, of the Trust Fund; and no person lending money to the Trustee
shall be bound to see to the application of the money lent or to
inquire into the validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the best
interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as
Trustee hereunder,
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whether or not such securities or other property would normally be
purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other instruments
that may be necessary or appropriate to carry out the powers herein
granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or
defend suits or legal or administrative proceedings, and to represent
the Plan in all suits and legal and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may or
may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance companies,
to be selected by the Administrator, as an investment of the Trust
Fund such annuity, or other Contracts (on the life of any Participant)
as the Administrator shall deem proper; to exercise, at any time or
from time to time, whatever rights and privileges may be granted under
such annuity, or other Contracts; to collect, receive, and settle for
the proceeds of all such annuity or other Contracts as and when
entitled to do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To invest in shares of investment companies registered under
the Investment Company Act of 1940;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange;
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(p) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan associations;
(q) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension benefit trust
created by the Employer or an affiliated company of the Employer, and
to commingle such assets and make joint or common investments and
carry joint accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such
investments or accounts or any pooled assets of the two or more trusts
in accordance with their respective interests;
(r) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to carry out the purposes of the Plan.
7.4 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time to time,
in accordance with the terms of the Plan, make payments out of the Trust Fund.
The Trustee shall not be responsible in any way for the application of such
payments.
7.5 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from time to
time be agreed upon in writing by the Employer and the Trustee. An individual
serving as Trustee who already receives full-time pay from the Employer shall
not receive compensation from the Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall be paid from the
Trust Fund unless paid or advanced by the Employer. All taxes of any kind and
all kinds whatsoever that may be levied or assessed under existing or future
laws upon, or in respect of, the Trust Fund or the income thereof, shall be paid
from the Trust Fund.
7.6 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the Anniversary Date
or receipt of the Employer's contribution for each Plan Year, the Trustee shall
furnish to the Employer and Administrator a written statement of account with
respect to the Plan Year for which such contribution was made setting forth:
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(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust Fund; and
(e) such further information as the Trustee and/or Administrator
deems appropriate. The Employer, forthwith upon its receipt of each
such statement of account, shall acknowledge receipt thereof in
writing and advise the Trustee and/or Administrator of its approval or
disapproval thereof. Failure by the Employer to disapprove any such
statement of account within thirty (30) days after its receipt thereof
shall be deemed an approval thereof. The approval by the Employer of
any statement of account shall be binding as to all matters embraced
therein as between the Employer and the Trustee to the same extent as
if the account of the Trustee had been settled by judgment or decree
in an action for a judicial settlement of its account in a court of
competent jurisdiction in which the Trustee, the Employer and all
persons having or claiming an interest in the Plan were parties;
provided, however, that nothing herein contained shall deprive the
Trustee of its right to have its accounts judicially settled if the
Trustee so desires.
7.7 AUDIT
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the Administrator
shall direct the Trustee to engage on behalf of all Participants an
independent qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of the Plan
in accordance with generally accepted auditing standards, within a
reasonable period after the close of the Plan Year, furnish to the
Administrator and the Trustee a report of his audit setting forth his
opinion as to whether any statements, schedules or lists that are
required by Act Section 103 or the Secretary of Labor to be filed with
the Plan's annual report, are presented fairly in conformity with
generally accepted accounting
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principles applied consistently. All auditing and accounting fees
shall be an expense of and may, at the election of the Administrator,
be paid from the Trust Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised
and subject to periodic examination by a state or federal agency, it
shall transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one hundred
twenty (120) days after the end of the Plan Year or by such other date
as may be prescribed under regulations of the Secretary of Labor.
7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by registered
or certified mail, addressed to such Trustee at his last known
address, at least thirty (30) days before its effective date, a
written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining
Trustee or Trustees shall have full authority to act under the terms
of the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In the event
a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested
with all the estate, rights, powers, discretions, and duties of his
predecessor with the
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like effect as if he were originally named as Trustee herein
immediately upon the death, resignation, incapacity, or removal of his
predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he
shall furnish to the Employer and Administrator a written statement of
account with respect to the portion of the Plan Year during which he
served as Trustee. This statement shall be either (i) included as part
of the annual statement of account for the Plan Year required under
Section 7.6 or (ii) set forth in a special statement. Any such special
statement of account should be rendered to the Employer no later than
the due date of the annual statement of account for the Plan Year. The
procedures set forth in Section 7.6 for the approval by the Employer
of annual statements of account shall apply to any special statement
of account rendered hereunder and approval by the Employer of any such
special statement in the manner provided in Section 7.6 shall have the
same effect upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have any duty
or responsibility to investigate the acts or transactions of any
predecessor who has rendered all statements of account required by
Section 7.6 and this subparagraph.
7.9 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the Trustee at
the direction of the Administrator shall transfer the Vested interest, if any,
of such Participant in his account to another trust forming part of a pension,
profit sharing or stock bonus plan maintained by such Participant's new employer
and represented by said employer in writing as meeting the requirements of Code
Section 401(a), provided that the trust to which such transfers are made permits
the transfer to be made.
Notwithstanding the above, with respect to distributions made after December
31, 1992, if the distributee of any "eligible rollover distribution" (as defined
in Code Section 402tf)(2)(A)) (1) elects to have such distribution paid directly
to an "eligible retirement plan", and (2) specifies the "eligible retirement
plan" to which such distribution is to be paid (in such form and at such time as
the Administrator may prescribe), then the distribution shall be made in the
form of a direct trustee-to-trustee transfer to the specified eligible
retirement plan. Moreover, the amount subject to the direct trustee-to-trustee
transfer shall be limited to the amount of the
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distribution that would be includible in gross income if not transferred in
accordance with the preceding (determined without regard to Code Sections 402(c)
and 403(a)(4)).
For purposes of this section, the term "eligible retirement plan" has the
meaning given such term by Code Section 402(c)(8)(B), except that a qualified
trust shall be considered an eligible retirement plan only if it is a defined
contribution plan, the terms of which permit the acceptance of rollover
distributions.
7.10 EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are defined
in the Act, provided, however, that the Trustee shall not be permitted to
acquire any qualifying Employer securities or qualifying Employer real property
if, immediately after the acquisition of such securities or property, the fair
market value of all qualifying Employer securities and qualifying Employer real
property held by the Trustee hereunder should amount to more than 100% of the
fair market value of all the assets in the Trust Fund.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the
Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee and Administrator may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant; or
causes or permits any
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portion of the Trust Fund to revert to or become property of the
Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective to the extent
it eliminates or reduces any "Section 411(d)(6) protected benefit" or
adds or modifies conditions relating to "Section 411(d)(6) protected
benefits" the result of which is a further restriction on such benefit
unless such protected benefits are preserved with respect to benefits
accrued as of the later of the adoption date or effective date of the
amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written notice of
such termination. Upon any full or partial termination, all amounts
credited to the affected Participants' Combined Accounts shall become
100% Vested as provided in Section 6.4 and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be allocated
to the accounts of all Participants in accordance with the provisions
hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5. Distributions to a Participant shall be
made in cash or through the purchase of irrevocable nontransferable
deferred commitments from an insurer. Except as permitted by
Regulations, the termination of the Plan shall not result in the
reduction of "Section 411(d)(6) protected benefits" in accordance with
Section 8.1(c).
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8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan and trust only if the benefits
which would be received by a Participant of this Plan, in the event of a
termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
ARTICLE IX
MISCELLANEOUS
9.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the Employer
and any Participant or to be a consideration or an inducement for the employment
of any Participant or Employee. Nothing contained in this Plan shall be deemed
to give any Participant or Employee the right to be retained in the service of
the Employer or to interfere with the right of the Employer to discharge any
Participant or Employee at any time regardless of the effect which such
discharge shall have upon him as a Participant of this Plan.
9.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit which
shall be payable out of the Trust Fund to any person (including a
Participant or his Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge the same shall be void;
and no such benefit shall in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements, or torts of any such
person, nor shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized by the
Trustee, except to such extent as may be required by law.
(b) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations
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orders permitted to be so treated by the Administrator under the
provisions of the Retirement Equity Act of 1984. The Administrator
shall establish a written procedure to determine the qualified status
of domestic relations orders and to administer distributions under
such qualified orders. 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.
9.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the Act and
the laws of the State of Missouri, other than its laws respecting choice of law,
to the extent not preempted by the Act.
9.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in another gender
in all cases where they would so apply, and whenever any words are used herein
in the singular or plural form, they shall be construed as though they were also
used in the other form in all cases where they would so apply.
9.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the Trust
and/or Plan established hereunder to which the Trustee or the Administrator may
be a party, and such claim, suit, or proceeding is resolved in favor of the
Trustee or Administrator, they shall be entitled to be reimbursed from the Trust
Fund for any and all costs, attorney's fees, and other expenses pertaining
thereto incurred by them for which they shall have become liable.
9.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically permitted
by law, it shall be impossible by operation of the Plan or of the
Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by
any other means, for any part of the corpus or income of any trust
fund maintained pursuant to the Plan or any funds contributed thereto
to be used for, or diverted to, purposes other than the exclusive
benefit of Participants, Retired Participants, or their
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Beneficiaries.
(b) In the event the Employer shall make an excessive contribution
under a mistake of fact pursuant to Act Section 403(c)(2)(A), the
Employer may demand repayment of such excessive contribution at any
time within one (1) year following the time of payment and the
Trustees shall return such amount to the Employer within the one (1)
year period. Earnings of the Plan attributable to the excess
contributions may not be returned to the Employer but any losses
attributable thereto must reduce the amount so returned.
9.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless exempted by
the Act and regulations thereunder, shall be bonded in an amount not less than
10% of the amount of the funds such Fiduciary handles; provided, however, that
the minimum bond shall be $1,000 and the maximum bond, $500,000. The amount of
funds handled shall be determined at the beginning of each Plan Year by the
amount of funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary,
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.
9.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for the failure
on the part of the insurer to make payments provided by any such Contract, or
for the action of any person which may delay payment or render a Contract null
and void or unenforceable in whole or in part.
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9.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
9.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative, Beneficiary, or to
any guardian or committee appointed for such Participant or Beneficiary in
accordance with the provisions of the Plan, shall, to the extent thereof, be in
full satisfaction of all claims hereunder against the Trustee and the Employer,
either of whom may require such Participant, legal representative, Beneficiary,
guardian or committee, as a condition precedent to such payment, to execute a
receipt and release thereof in such form as shall be determined by the Trustee
or Employer.
9.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or required
to do or perform any act or matter or thing, it shall be done and performed by a
person duly authorized by its legally constituted authority.
9.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan. In general, the Employer shall have the sole
responsibility for making the contributions provided for under Section 4.1; and
shall have the sole authority to appoint and remove the Trustee and the
Administrator; to formulate the Plan's "funding policy and method"; and to amend
or terminate, in whole or in part, the Plan. The Administrator shall have the
sole responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. The Trustee shall have the sole
responsibility of management of the assets
85
<PAGE>
held under the Trust, except those assets, the management of which has been
assigned to an Investment Manager, who shall be solely responsible for the
management of the assets assigned to it, all as specifically provided in the
Plan. Each named Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction, information
or action of another named Fiduciary as being proper under the Plan, and is not
required under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each named Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity. In the furtherance of their responsibilities hereunder, the "named
Fiduciaries" shall be empowered to interpret the Plan and Trust and to resolve
ambiguities, inconsistencies and omissions, which findings shall be binding,
final and conclusive.
9.13 HEADINGS
The headings and subheadings of this Plan have been inserted for convenience
of reference and are to be ignored in any construction of the provisions hereof.
9.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, contributions
to this Plan are conditioned upon the initial qualification of the
Plan under Code Section 401. If the Plan receives an adverse
determination with respect to its initial qualification, then the Plan
may return such contributions to the Employer within one year after
such determination, provided the application for the determination is
made by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan was adopted, or such later date
as the Secretary of the Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.6, 3.7, and 4.1(e), any contribution by the Employer to the
Trust Fund is conditioned upon the deductibility of the contribution
by the Employer under the Code and, to the extent any
86
<PAGE>
such deduction is disallowed, the Employer may, within one (1) year
following the disallowance of the deduction, demand repayment of such
disallowed contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of the Plan
attributable to the excess contribution may not be returned to the
Employer, but any losses attributable thereto must reduce the amount
so returned.
9.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a uniform,
nondiscriminatory manner. In the event of any conflict between the terms of this
Plan and any Contract purchased hereunder, the Plan provisions shall control.
87
<PAGE>
IN WITNESS WHEREOF, this Plan has been executed the day and year first above
written.
Signed, sealed, and delivered
in the presence of:
Fulton Savings and Loan
Association
By /s/ Kermit D. Gohring
- ------------------------------ ------------------------------
EMPLOYER
/s/ Bonnie Salmons
- ------------------------------
WITNESSES AS TO EMPLOYER
ATTEST /s/ Bonnie Smith
------------------------------
/s/ Kermit D. Gohring (SEAL)
- ------------------------------ ------------------------
TRUSTEE
/s/ Bonnie Salmons
- ------------------------------
WITNESSES AS TO TRUSTEE
/s/ Richard W. Gohring (SEAL)
- ------------------------------ ------------------------
TRUSTEE
/s/ Bonnie Salmons
- ------------------------------
WITNESSES AS TO TRUSTEE
/s/ Bonnie Smith (SEAL)
- ------------------------------ ------------------------
TRUSTEE
/s/ Bonnie Salmons
- ------------------------------
WITNESSES AS TO TRUSTEE
88
<PAGE>
FULTON SAVINGS AND LOAN ASSOCIATION
RETIREMENT TRUST
FUNDING POLICY AND METHOD
A pension benefit plan (as defined in the Employee Retirement Income
Security Act of 1974) has been adopted by the company for the purpose of
rewarding long and loyal service to the company by providing to employees
additional financial security at retirement. Incidental benefits are provided in
the case of disability, death or other termination of employment.
Since the principal purpose of the plan is to provide benefits at normal
retirement age, the principal goal of the investment of the funds in the plan
should be both security and long-term stability with moderate growth
commensurate with the anticipated retirement dates of participants. Investments,
other than "fixed dollar" investments, should be included among the plan's
investments to prevent erosion by inflation. However, investments should be
sufficiently liquid to enable the plan, on short notice, to make some
distributions in the event of the death or disability of a participant.
<PAGE>
Exhibit 23.1
[LETTERHEAD OF MOORE, HORTON & CARLSON, P.C.]
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Fulton Bancorp, Inc.
Fulton Savings Bank, FSB
Fulton, Missouri 65251
We consent to the use in this Amended Registration Statement on Form S-1 on
behalf of Fulton Bancorp, Inc. of our report date June 14, 1996, relating to the
consolidated financial statements of Fulton Savings Bank, FSB and Subsidiary,
which appears in such Registration Statement. We also consent to the reference
to us under the headings "Legal and Tax Opinions" and "Experts" contained in the
Prospectus, which is a part of such Registration Statement.
/s/ Moore, Horton & Carlson, P.C.
Mexico, Missouri
August 27, 1996
<PAGE>
_ _ FULTON BANCORP, INC.
| | ---------------------------------------
PROPOSED HOLDING COMPANY FOR FULTON
SAVINGS BANK, FSB
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 terminate at 4:30 p.m., Central Time,
on , 1996, unless extended, but not later than , 1996.
- -------------------------------------------------------------------------------
(1) Number of Shares Subscription Price (2) Total Payment Due
---------------------- X$10.00= ---------------------
---------------------- ---------------------
The minimum number of shares that may be subscribed for by any person (or
persons through a single account) is 25 shares and the maximum is 15,000,
except for purchases by the Employee Stock Ownership Plan of Fulton Savings
Bank, FSB ("Fulton Savings"). No person or entity together with their
associates or persons acting in concert may purchase more than 20,000 shares.
Management has the discretion to increase or decrease the purchase limit
within regulations. 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 Fulton Savings on December 31,
order made payable to 1994 (the Eligibility Record Date)
Fulton Bancorp, Inc. Enter information below for all
in the amount of: deposit accounts that you had at
- --------------- Cash can be Fulton Savings on December 31,
$ used only 1994.
- --------------- if presented (5)b [ ]Check here if you were a depositor
in person of Fulton Savings on June 30, 1996
at any (the Supplemental Eligibility
Fulton Record Date), but not on the
Savings Eligibility Record Date. Enter
office. information below for all deposit
accounts that you had at Fulton
Savings on June 30, 1996.
(5)c [ ]Check here if you had a loan from
(4)[ ]The]undersigned Fulton Savings on April 15, 1995 that
authorizes withdrawal was still outstanding on September 3
from this (these) 1996 or if you were a depositor at
account(s) at Fulton Fulton Savings on September 3, 1996
Savings. Please but not at the Eligibility Record
contact the Stock Date or the Supplemental Eligibility
Information Center Record Date. Enter information below
prior to , 1996 for all loan and deposit accounts
if you wish to use that you had at Fulton Savings on
your Fulton Savings , 1996 (the Voting Record Date
IRA for stock (5)d [ ]State and county in which you reside:
purchase.
Account Number Amount Account Title Deposit Loan Account
- ---------------------------- (Names on Accounts) Account Account Number
$
- ---------------------------- -------------------------------------------------
$
- ---------------------------- -------------------------------------------------
$
- ---------------------------- -------------------------------------------------
Total Withdrawal $
Amout ------------ -------------------------------------------------
There is no penalty for early withdrawals used for stock payment.
STOCK REGISTRATION (SEE BACK UNDER STOCK OWNERSHIP GUIDE)
(6) Form of Stock Ownership:
[_]Individual [_]Joint tenants with right of survivorship
[_]Tenants in common [_]Uniform Transfer to Minors
[_]Fiduciary (i.e., trust, estate, etc.)
[_]Corporation or Partnership [_]Other ___________________
- -------------------------------------------------------------------------------
(7)Name(s) in which your stock is to Social Security No. or
be registered (Please Print Clearly) 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 Fulton Saving'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 together with payment must be actually received by Fulton Savings
no later than 4:30 p.m., Central time 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 Fulton Savings 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 Fulton Savings described in the accompanying
Prospectus. If the Plan of Conversion is not approved by the voting members of
Fulton Savings at a Special Meeting to be held on , 1996, or any
adjournment thereof, if all required regulatory approvals are not received, or
if the minimum number of shares is not sold in the Offerings all orders will
be cancelled and funds received as payment, with accrued interest, will be
returned promptly. The undersigned agrees that after receipt by Fulton
Savings, 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 Fulton Savings' consent and if
authorization to withdraw from deposit accounts at Fulton Savings 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. FULTON SAVINGS AND FULTON 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.
I ALSO ACKNOWLEDGE RECEIPT OF A PROSPECTUS DATED , 1996.
A VALID STOCK ORDER FORM MUST BE SIGNED AND DATED BELOW AND ACCOMPANIED BY
PAYMENT OR WITHDRAWAL AUTHORIZATION.
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 Fulton Bancorp, Inc.
SIGNATURE(S)
- -------------------------------------------------------------------------------
(11)Signature Date Signature Date
- -------------------------------------------------------------------------------
FOR OFFICE USE ONLY
STOCK INFORMATION CENTER
FULTON SAVINGS BANK, FSB
Date Category # ______ 410 MARKET STREET
Received _ /_ /_ Deposit _________ FULTON, MISSOURI 65251
Batch # _________ Date Input /_ / (573) -
Order # _________
<PAGE>
FULTON 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
Gifts or 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 Transfers to Minors Law
will be abbreviated John Doe, CUST Susan Doe MO Tran Min Law (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 either banking office of
Fulton Savings. 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 $10.00 per share must be received
by Fulton Savings no later than 4:30 p.m., Central Time, on , 1996, unless
such date is extended, or your Stock Order Form will become void. However, the
Direct Community Offering, if one is held, may terminate as late as ,
1996, unless extended with regulatory approval. Stock Order Forms shall be
deemed received only upon actual receipt at either banking office of Fulton
Savings.
If you need further assistance, please call the Stock Information Center at
(573) . 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 Fulton
Savings Employee Stock Ownership Plan) is 15,000 shares. In addition, no
person, together with associates or group of persons acting in concert, may
purchase more than 20,000 shares. Fulton Bancorp and Fulton Savings reserve
the right to reject any order received in the Direct Community Offering, in
whole or in part.
Fulton Bancorp and Fulton Savings 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 Fulton Bancorp, Inc. Your
funds will earn interest at Fulton Savings' passbook 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 Fulton Savings 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 Fulton Savings, 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 Fulton Savings on December
31, 1994 (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 Fulton Savings 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 had a loan from Fulton Savings on April 15,
1995 that was still outstanding on September 3, 1996 or if you were a
depositor on September 3, 1996 but not on the Eligibility Record Date or the
Supplemental Eligibility Record Date. You must list the account numbers the
name of all borrowers on your loan accounts and the full title and account
numbers of all deposit accounts that you had at such date in order to ensure
proper identification of your purchase rights and preferences.
d. You must list the state and county 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
(573) .
<PAGE>
-------------------------------------------------
CONVERSION APPRAISAL REPORT
FULTON BANCORP, INC.
PROPOSED HOLDING COMPANY FOR
FULTON SAVINGS BANK, FSB
Fulton, Missouri
Stock Prices As Of:
July 12, 1996
-------------------------------------------------
Prepared By:
RP Financial, LC.
1700 North Moore Street
Suite 2210
Arlington, Virginia 22209
<PAGE>
[LETTERHEAD OF RP FINANCIAL, L.C. APPEARS HERE]
July 12, 1996
Board of Directors
Fulton Savings Bank, FSB
410 Market Street
Fulton, Missouri 65251
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 Fulton Bancorp, Inc. (the "Holding Company"), in connection with
the mutual-to-stock conversion of Fulton Savings Bank, FSB, (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 a Direct Community Offering and a
Syndicated 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 capital stock savings bank. In the
reorganization process, to become effective concurrent with the completion of
the stock sale, which is targeted for the fourth 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
July 12, 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-1 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; Moore, Horton & Carlson, P.C., the Bank's independent
auditor; Breyer and Aguggia, 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 July 12, 1996, the aggregate pro forma market
value of the Bank and the Holding Company, was $13,000,000 at the midpoint,
equal to 1,300,000 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 $11,050,000 and a maximum value of $14,950,000. Based on the $10.00
per share offering price, this valuation range equates to an offering of
1,105,000 shares at the minimum to 1,495,000 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 $17,192,500, equal
to 1,319,250 shares at the $10.00 per share offering price.
<PAGE>
RP Financial, LC.
Board of Directors
July 12, 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 April 30, 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/ James J. Oren
James J. Oren
Vice President
<PAGE>
RP Financial, LC.
TABLE OF CONTENTS
FULTON SAVINGS BANK, FSB
Fulton, Missouri
<TABLE>
<CAPTION>
PAGE
DESCRIPTION NUMBER
----------- ------
CHAPTER ONE OVERVIEW AND FINANCIAL ANALYSIS
- -----------
<S> <C>
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 1.12
Funding Composition and Strategy 1.12
Subsidiary 1.13
Legal Proceedings 1.13
CHAPTER TWO MARKET AREA
- -----------
Introduction 2.1
National Economic Factors 2.2
Market Area Demographics 2.3
Economy 2.5
Deposit Trends and Competition 2.7
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
Interest Rate Risk 3.12
Credit Risk 3.12
Summary 3.15
</TABLE>
<PAGE>
RP Financial, LC.
TABLE OF CONTENTS
FULTON SAVINGS BANK, FSB
Fulton, Missouri
(continued)
<TABLE>
<CAPTION>
PAGE
DESCRIPTION NUMBER
----------- ------
CHAPTER FOUR VALUATION ANALYSIS
- ------------
<S> <C>
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 4.8
A. The Public Market 4.8
B. The New Issue Market 4.12
C. The Acquisition Market 4.16
8. Management 4.16
9. Effect of Government Regulation and Regulatory
Reform 4.17
Summary of Adjustments 4.17
Valuation Approaches 4.18
1. Price-to-Earnings ("P/E") 4.19
2. Price-to-Book ("P/B") 4.20
3. Price-to-Assets ("P/A") 4.20
Valuation Conclusion 4.21
</TABLE>
<PAGE>
RP Financial, LC.
LIST OF TABLES
FULTON SAVINGS BANK, FSB
Fulton, Missouri
<TABLE>
<CAPTION>
TABLE
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
<S> <C> <C>
1.1 Historical Balance Sheets 1.5
1.2 Historical Income Statements 1.8
2.1 Summary Demographic Data 2.4
2.2 Major Market Area Employers 2.6
2.3 Market Area Unemployment Trends 2.7
2.4 Deposit Summary 2.8
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 & Related Info. 3.11
3.5 Credit Risk Measures & Related Information 3.13
3.6 Interest Rate Risk Comparative Analysis 3.14
4.1 Peer Group Primary Market Area Demographics/Competition Trends 4.5
4.2 Recent Conversions: Market Pricing Comparatives 4.13
4.3 Market Pricing Comparatives 4.15
4.4 Pricing Characteristics of Recent Midwestern Conversions 4.16
4.5 Public Market Pricing: Valuation Conclusion 4.22
</TABLE>
<PAGE>
RP Financial, LC.
Page 1.1
I. OVERVIEW AND FINANCIAL ANALYSIS
Fulton Savings Bank, FSB ("Fulton Savings", or the "Bank") is a
federally- chartered mutual savings bank headquartered in Fulton, Callaway
County, Missouri. The Bank also operates a branch in the nearby town of Holts
Summit. The Bank considers its primary market for deposits to consist of
Callaway County as both offices are located in that county. Lending activities
are concentrated in Callaway and Boone Counties, and to a lesser extent in Cole
and Audrain Counties, with the metropolitan area of Columbia, Missouri providing
a source of lending opportunities (see Exhibit I-1). The Bank was chartered as a
Missouri mutual savings and loan association in 1912, and 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 April 30,
1996, the Bank maintained $85.5 million in assets, $70.3 million in deposits and
$9.1 million in retained earnings, equal to 10.7 percent of assets.
The Bank's Board of Directors has adopted a Plan of Conversion, in
which the Bank will reorganize from a federal mutual savings bank to a federal
capital stock savings bank, issuing all of its common stock to a newly formed
unitary savings and loan holding company called Fulton Bancorp, Inc. ("Fulton
Bancorp" or 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 fourth 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 primarily in Callaway and Boone Counties, Missouri,
supplemented with active originations of other loan types such as commercial
real estate, construction and consumer loans. The more urbanized area of
Columbia, Boone County provides a source of commercial real estate loans (multi-
family and non-residential). The Bank is also an active originator of consumer
loans, the majority of which have consisted of secured consumer loans,
automobile loans, home improvement loans, and education loans. In recent years
Fulton Savings has experienced loan demand (residential mortgage and
nonresidential mortgage), in excess of available funds for loan originations.
The Bank has followed a strategy of originating fixed rate residential loans and
selling such loans in the secondary market servicing retained, and originating
and selling adjustable rate residential loans and commercial real estate loans
to other Missouri financial institutions while generally
<PAGE>
RP Financial, LC.
Page 1.2
retaining 10-20 percent of the loan balance and the loan servicing. Excess
cash at the Bank is reinvested into deposits in other financial institutions
and various other types of low-risk investment securities, including U.S.
government and federal agency obligations.
By emphasizing a traditional thrift operating strategy through the
origination of primarily 1-4 family mortgage loans, and a concentration of
lending on local properties, the Bank has maintained good asset quality in
recent years. The Bank has also effectively limited its exposure to interest
rate risk through its lending strategies, which has involved selling essentially
all fixed-rate residential mortgage loans with servicing retained, retaining a
majority of adjustable rate residential mortgages ("ARMs") for portfolio, and
growing the portfolios of adjustable rate commercial real estate loans and
shorter-term construction and consumer loans. The Bank also attempts to lengthen
the maturity of its deposit base whenever possible, and utilizes borrowings as
an asset-liability management tool when maturities and rates are attractive. The
strategy of selling loans servicing retained has resulted in a substantial
portfolio of loans serviced for others ("LSFOs"), which totaled over $84 million
as of April 30, 1996. Income from this servicing portfolio provides additional
revenue diversification from changes in interest rates. Fulton Saving's funding
needs have been met primarily with retail deposits, although the Bank has
recently borrowed funds from the FHLB of Des Moines to meet loan demand. 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 8 percent in the event of an instantaneous 200
basis point increase in interest rates. Fulton Savings intends to continue to
adhere to an operating strategy that limits exposure to interest rate risk.
Notwithstanding the recent growth in commercial real estate,
construction and consumer loans, the majority of Fulton Savings' loans consist
of relatively low credit risk residential mortgages (approximately 60 percent of
the gross loan portfolio consists of 1-4 family residential mortgages). This,
together with the Bank's generally conservative underwriting standards, has
minimized credit risk in recent years. The ratio of non-performing assets
("NPAs", consisting of real estate owned and other repossessed assets, non-
accruing loans, delinquent accruing loans and restructured loans) to assets has
stayed below 1.00 percent of assets during the last two fiscal years. The
majority of the NPAs are secured by residential mortgages or residential real
estate in which management believes exposure to losses is minimal.
The Bank has recorded somewhat variable earnings over the past five
fiscal years due to fluctuations in the net interest margin. The Bank derives
earnings from net interest income exceeding operating expenses supported by non-
interest income, including income from loan servicing operations. In the most
recent two fiscal years the Bank experienced a decline in net interest income,
as funding costs have increased, reducing the Bank's core earnings to lower
levels than were recorded in earlier years. During fiscal 1996, Fulton Savings
more aggressively priced deposit products in order to obtain additional funds
for lending operations; this
<PAGE>
RP Financial, LC.
Page 1.3
strategy resulted in higher overall deposit costs and a lower net interest
margin. Since 1995, the Bank has also utilized higher costing FHLB advances to
fund loan originations. Going forward, the Bank anticipates that earnings
will benefit from lower funding costs from the increase in capital and
continued expansion of the LSFO portfolio.
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 (10.7 percent of assets at April 30, 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 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 Fulton Bancorp, Inc.. Approximately 50 percent of the net proceeds
---------------------
of conversion will be initially retained by the Holding Company.
Subsequent to the conversion, Fulton Bancorp intends to loan a
majority of the funds retained to the Bank for use in ongoing
operations of Fulton Savings. The minimal amount of funds retained by
the Holding Company are expected to be invested initially into U.S.
Treasury and agency securities with laddered maturities ranging from
6 months to two 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 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. In addition, the Holding Company is expected to
downstream additional conversion proceeds to the Bank via a loan in
order to provide additional funds for lending activities. 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
<PAGE>
RP Financial, LC.
Page 1.4
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.
Balance Sheet Trends
- --------------------
Since fiscal 1992, the Bank has experienced asset growth of 4.2 percent
annually. Between fiscal 1992 and fiscal 1994 assets remained essentially
constant as the Bank experienced only slight increases in deposit levels. To
meet strong loan demand during fiscal year 1995, the Bank borrowed funds from
the FHLB of Des Moines, while during fiscal 1996 Fulton Savings more
aggressively priced deposit products. The combination of these two strategies
resulted in an increase in assets of $11.9 million, or 16.1 percent, from fiscal
1994 to 1996. Growth in assets was channeled primarily into loan portfolio
growth, which grew from $60.3 million at April 30, 1994 to $76.2 million at
April 30, 1996.
Since fiscal year end 1992, the cash and investments portfolio has
declined as excess cash and cash flow from maturing investments has been
reinvested into loans receivable. At April 30, 1996, the portfolio of cash and
investments totaled $6.8 million, or 7.9 percent of assets, down from a five
year peak of $13.7 million, or 18.9 percent of assets, at April 30, 1992. MBS,
which totaled $2.0 million at April 30, 1992, declined to less than $1,000 by
April 30, 1996 as the Bank sold MBS and reinvested such funds into loans
receivable. Positive earnings during the past five fiscal years has led to
steady capital growth and the capital to assets ratio increased from 8.4 percent
at fiscal year end 1992 to 10.7 percent at April 30, 1996, although such growth
has been offset by the increase in assets. Exhibit I-2 references the Bank's
audited financial statements, while Exhibit I-3 highlights the Bank's key
historical operating ratios.
Loans receivable comprised the majority of the Bank's assets at
April 30, 1996, totaling $76.2 million, or 89.1 percent of assets. An emphasis
on 1-4 family residential lending is reflected in the Bank's loan portfolio, as
59.6 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 multi-family and non-residential real estate loans (16.0
percent of gross loans), construction loans (9.8 percent of gross loans) and
consumer loans (12.7 percent). The Bank has more strongly emphasized commercial
real estate and construction lending to take advantage of the lending
opportunities, particularly in the Columbia, Boone County area and for the
attractive yields and shorter terms such loans offer. Essentially all of the
Bank's construction loans are made to the owners of the property. The Bank has
also been active in consumer lending, primarily through secured consumer
lending. To a lesser extent, the Bank originates land loans (2.0 percent of
gross loans). Permanent 1-4 family residential mortgages have always comprised
the largest portion of the loan portfolio. In addition to the whole loan
portfolio, Fulton Savings maintained a portfolio of LSFOs of $84.4
<PAGE>
RP Financial, LC.
Table 1.1
Fulton Savings Bank, FSB
Historical Balance Sheets (1)
(Amount and Percent of Assets)
<TABLE>
<CAPTION>
-------------------------------------------------------------------
1992 1993
--------------------------------- --------------------------------
Amount Pct Amount Pct
------ --- ------ ---
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Total Amount of:
Assets $72,345 100.00% $73,623 100.00%
Loans Receivable (net) 54,538 75.39% 56,323 76.50%
Mortgage-Backed Securities 1,986 2.75% 1,689 2.29%
Cash and Investment Securities 13,699 18.94% 13,605 18.46%
Real Estate Owned(Net) 413 0.57% 280 0.38%
Deposits 64,870 89.67% 65,235 88.61%
FHLB Advances, Other Borrowed Funds 0 0.00% 0 0.00%
Stockholders Equity 6,055 8.37% 7,052 9.58%
Offices Open 2 2
</TABLE>
<TABLE>
<CAPTION> As of April 30,
------------------------------------------------------------------
1994 1995
--------------------------------- -------------------------------
Amount Pct Amount Pct
------ --- ------ ---
($000) (%) ($000) (%)
<S> <C> <C> <C> <C>
Total Amount of:
Assets $73,620 100.00% $79,351 100.00%
Loans Receivable (net) 60,282 81.88% 68,378 86.17%
Mortgage-Backed Securities 1,196 1.62% 1 0.00%
Cash and Investment Securities 10,207 13.86% 9,014 11.36%
Real Estate Owned(Net) 203 0.28% 5 0.01%
Deposits 64,630 87.79% 65,205 82.17%
FHLB Advances, Other Borrowed Funds 0 0.00% 4,500 5.67%
Stockholders Equity 7,933 10.78% 8,484 10.69%
Offices Open 2 2
</TABLE>
<TABLE>
<CAPTION>
4/30/92-
4/30/96
---------------------------- Annualized
1996 Growth Rte
----------------------------- ----------
Amount Pct Pct
------ ---
($000) (%) (%)
<S> <C> <C> <C>
Total Amount of:
Assets $85,496 100.00% 4.26%
Loans Receivable (net) 76,199 89.13% 8.72%
Mortgage-Backed Securities 0 0.00% -89.40%
Cash and Investment Securities 6,777 7.93% -16.13%
Real Estate Owned(Net) 198 0.23% -16.82%
Deposits 70,316 32.24% 2.04%
FHLB Advances, Other Borrowed Funds 5,000 5.85% N/M
Stockholders Equity 9,117 10.66% 10.77%
Offices Open 2
</TABLE>
(1) Ratios are as a percent of ending assets.
Source: Fulton Savings' audited financial reports.
<PAGE>
RP Financial, LC.
Page 1.6
million as of April 30, 1996. The LSFOs consisted of fixed rate residential
loans sold to governmental agencies such as FHLMC and Fannie Mae, and adjustable
rate residential and commercial real estate loans generally sold to other
Missouri financial institutions.
The second largest component of interest-earning assets ("IEA") was the
portfolio of cash and investment securities, which totaled $6.8 million, or 7.9
percent of assets, at April 30, 1996 (see Exhibit I-4). The cash and
investments portfolio consisted of cash and equivalents, including interest-
earning deposits in other financial institutions ($2.9 million), federal agency
obligations ($3.2 million), and FHLB stock ($0.6 million). Over the past four
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 $13.7 million at April 30, 1992. Management utilizes the portfolio
of cash and investments for liquidity purposes and as part of the asset-
liability management strategy, as 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 maintained only a minimal amount of MBS, which totaled less than
$1,000, at April 30, 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 a sale of a large portion of the MBS in fiscal
1995, as the Bank determined to invest available funds into loans receivable.
Going forward, the Bank intends to continue a focus on investment into whole
loans, although MBS may be purchased with available funds. Balances of real
estate owned ("REO") showed a generally declining trend through fiscal 1995, but
increased to $198,000 as of April 30, 1996, consisting of seven residential
units.
The Bank's assets were primarily funded with retail deposits, FHLB
borrowings and retained earnings at April 30, 1996. Retail deposits have
consistently met the majority of the Bank's funding, and totaled $70.3 million,
or 82.2 percent of assets, at April 30, 1996. While strong competition for
deposits and disintermediation in the low interest rate environment limited
opportunities for deposit growth at the Bank, the deposit growth recorded during
fiscal 1996 was attributable to a more aggressive deposit pricing strategy
employed by the Bank. The deposit growth was pursued in order to fund
additional loan originations, and the higher rates paid on deposits during
fiscal 1996 was deemed acceptable due to the strong capital position of the
Bank.
Borrowings have also been used by the Bank in recent periods for the
purpose of funding loan originations. During fiscal 1995, the Bank borrowed
approximately $4.5 million in short- to intermediate-term
<PAGE>
RP Financial, LC.
Page 1.7
advances from the FHLB of Des Moines to meet the strong demand for loans. An
additional $0.5 million was borrowed during fiscal 1996, and FHLB advances
totaled $5.0 million, or 5.9 percent of assets, at April 30, 1996. Going
forward, the Bank may supplement deposit funding with borrowings from time to
time, based on funds availability, loan demand, and the costs of borrowing,
although deposits are expected to continue to comprise the majority of funding
liabilities.
Positive earnings during the past five fiscal years contributed to an
annual capital growth rate of 10.8 percent for the Bank. Capital growth outpaced
asset growth during this period and the capital ratio increased from 8.4 percent
at April 30, 1992 to 10.7 percent at April 30, 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. The
Bank has recorded profitable operations since 1992 but earnings have dropped
from the peak level in fiscal 1994. The more recent lower earnings have been
attributable to a lower net interest margin, adversely affected by higher
interest expense. The reinvestment of interest-free capital received in the
stock offering should serve to improve net interest income in future periods.
Most of Fulton Savings' income is recurring in nature, as non-recurring items
have had a minimal impact on the Bank's earnings since fiscal 1992.
Exhibit I-5 highlights the changes in the Bank's asset yields and cost of
funds over the past three fiscal years, which have influenced the level of net
interest income. Spreads narrowed by 36 basis points between fiscal 1995 and
1996, as the more aggressive pricing of certificate of deposits ("CDs") in order
to fund additional loan demand and the increase in higher costing FHLB advances
increased the Bank's cost of funds by 78 basis points, while asset yields
increased by only 42 basis points. During this most recent fiscal year, the
Bank's net interest income declined from 3.20 percent of average assets in
fiscal 1995 to 2.89 percent in fiscal 1996. These trends indicate that although
management has been successful in raising additional funds for lending, such
funds have been obtained at a higher cost. In addition, the Bank's net interest
income is still influenced by changes in interest rates.
The Bank derives significant income from non-interest sources, and believes such
income provides additional income diversification and protection from changes in
the net interest margin due to interest rate fluctuations. For fiscal 1996,
non-interest operating income totaled $0.486 million, or 0.59 percent of average
assets. A majority of this income results from the Bank's LSFO portfolio, which
totaled $84.4 million as of April 30, 1996. The Bank receives servicing fees of
approximately 30 to 35 basis points on the LSFO portfolio,
<PAGE>
RP Financial, LC.
Table 1.2
Fulton Savings Bank, FSB
Historical Income Statements
(Amount and Percent of Assets)(1)
<TABLE>
<CAPTION>
For the Fiscal Year Ended April 30,
-------------------------------------------------------------------------------------
1992 1993
------------------ -----------------------
<C> <C> <C> <C>
Amount Pct Amount Pct
------ --- ------ ---
($000) (%) ($000) (%)
Interest Income $6,438 9.22% $5,997 8.14%
Interest Expense (4,066) -5.82% (3,345) -4.54%
------ ------ ------ ------
Net Interest Income $2,372 3.40% $2,652 3.60%
Provision for Loan Losses (201) -0.29% (160) -0.22%
---- ------ ---- -----
Net Interest Income after Provisions $2,171 3.11% $2,492 3.38%
Loan Servicing Income 269 0.39% 286 0.39%
Other Income 124 0.18% 141 0.19%
Operating Expense (1,388) -1.99% (1,612) -2.19%
------ ------ ------ ------
Net Operating Income $1,176 1.68% $1,306 1.77%
Gain(Loss) on Sale of Securities 0 0.00% 0 0.00%
Provision for Loss on Foreclosed RE (0) -0.00% (13) -0.02%
-- ------ --- ------
Net Non-Operating Income ($0) - 0.00% ($13) -0.02%
Net Income Before Tax $1,176 1.68% $1,293 1.76%
Income Taxes (457) -0.65% (505) -0.69%
---- ------ ----- ------
Net Inc(Loss) Before Extraordinary Items $719 1.03% $788 1.07%
Cumulative Effect of Change in
Accounting For Income Taxes 0 0.00% 209 0.28%
- ---- --- ----
Net Income (Loss) $719 1.03% $997 1.35%
Estimated Core Earnings:
- ------------------------
Net Income Before Extraordinary Items $719 1.03% $788 1.07%
Addback(Deduct): Non-Operating Income 0 0.00% 13 0.02%
Tax Effect (37.1%) (0) -0.00% (5) -0.01%
- ---- - -----
Estimated Core Net Income $719 1.03% $796 1.08%
1994 1995 1996
--------------------- ----------------------- ---------------------
Amount Pct Amount Pct Amount Pct
------ --- ------ --- ------ ---
<C> <C> <C> <C> <C> <C>
($000) (%) ($000) (%) ($000) (%)
Interest Income $5,413 6.88% $5,355 7.10% $6,172 7.46%
Interest Expense (2,671) -3.39% (2,944) -3.91% (3,781) -4.57%
------- ------ ------- ------ ----- -------
Net Interest Income $2,742 3.49% $2,411 3.20% $2,391 2.89%
Provision for Loan Losses (48) -0.06% (118) -0.16% (44) -0.05%
---- ------ ----- ------ ---- ------
Net Interest Income after Provisions $2,694 3.42% $2,293 3.04% $2,346 2.84%
Loan Servicing Income 262 0.33% 255 0.34% 281 0.34%
Other Income 163 0.21% 160 0.21% 205 0.25%
Operating Expense (1,741) -2.21% (1,809) -2.40% (1,849) -2.24%
------- ------ ------- ------ ------- ------
Net Operating Income $1,377 1.75% $900 1.19% $983 1.19%
Gain(Loss) on Sale of Securities (11) -0.01% (55) -0.07% 0 0.00%
Provision for Loss on Foreclosed RE 0 0.00% 0 0.00% 0 0.00%
- ----- - ----- - -----
Net Non-Operating Income ($11) -0.01% ($55) -0.07% $0 0.00%
Net Income Before Tax $1,366 1.74% $844 1.12% $983 1.19%
Income Taxes (485) -0.62% (301) -0.40% (363) -0.44%
----- ------ ----- ------ ----- ------
Net Inc(Loss) Before Extraordinary Items $881 1.12% $543 0.72% $620 0.75%
Cumulative Effect of Change in
Accounting For Income Taxes 0 0.00% 0 0.00% 0 0.00%
- ---- - ----- - -----
Net Income (Loss) $881 1.12% $543 0.72% $620 0.75%
Estimated Core Earnings:
- ------------------------
Net Income Before Extraordinary Items $881 1.12% $543 0.72% $620 0.75%
Addback(Deduct): Non-Operating Income 11 0.01% 55 0.07% 0 0.00%
Tax Effect (37.1%) (4) -0.01% (21) -0.03% 0 0.00%
--- ------ ---- ------ - -----
Estimated Core Net Income $888 1.13% $578 0.77% $620 0.75%
</TABLE>
(1) Ratios are as a percent of average assets.
Source: Fulton Savings' audited financial reports.
<PAGE>
RP Financial, LC.
Page 1.9
and such income totaled $281,000, or 0.34 percent of average assets, for fiscal
1996. Other operating income consists of various loan and deposit fees and
charges and other miscellaneous sources of income. Going forward, the Bank
anticipates that non-interest income will increase with the growth in the
portfolio of loans serviced for others.
Fulton Savings recorded operating expenses of 2.24 percent of average
assets for fiscal 1996, consisting primarily of personnel, occupancy, data
processing and deposit insurance premium costs. The Bank's operating expenses
have grown in absolute terms in recent years, as expenses have increased in most
categories in line with the expansion of the Bank's asset base and level of
banking activities. The increase in assets has kept the operating expense ratio
in the range of 2.00 to 2.25 percent of average assets, and the recent
utilization of FHLB advances has served to leverage the expense base such that
the operating expense ratio declined by 0.16 percent of average assets from
fiscal 1995 to fiscal 1996.
Fulton Savings' operating expenses are expected to increase following the
conversion as a result of the following items. First, the Bank is in process of
renovating the Holts Summit office which is expected to result in higher
depreciation expense. Second, two stock plans, a leveraged Employee Stock
Ownership Plan ("ESOP") and a Management Recognition Plan and Trust ("MRP"), 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 MRP 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. In addition, as a publicly-traded institution, the Bank
will incur additional legal, accounting, printing/mailing and related costs.
Loan loss provisions have fluctuated during the past five fiscal years, and
for fiscal 1996 the Bank recorded a provision for loan losses of $0.044 million,
or 0.05 percent of average assets. The level of loan loss provisions is
established by the Bank's assessment of trends in the loan portfolio, market
conditions, and other factors. At April 30, 1996, the general valuation
allowance ("GVA") balance was equal to $782,000, or 1.06 percent of net loans
receivable and 99.36 percent of NPAs (including restructured loans), as compared
to $762,000, or 1.12 percent of net loans and 176.80 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 fiscal years, non-operating gains and losses have had
minimal impact on the Bank's operations. No non-operating income or expense was
recorded for fiscal 1996, while for fiscal years 1994 and 1995 the Bank recorded
losses on the sale of MBS as such securities were sold in order to reinvest
funds into whole loans receivable. The only other non-operating item recorded
by Fulton Savings in the past five fiscal years consisted of a $13,000 provision
for real estate owned ("REO") in fiscal 1994.
<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 residential adjustable rate mortgage loan
originations for portfolio, selling the majority of fixed-rate residential
mortgage loan originations in the secondary market, maintaining relatively high
proportions of adjustable rate commercial real estate and short-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). 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 8 percent, and in the event of an immediate decline of 200 basis
points in interest rates, the NPV is calculated to decrease by 1 percent.
Overall, the NPV analysis indicates 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-8 and I-9, loan composition and loan
maturity, respectively). However, the Bank has also concentrated on loan
portfolio diversification by building portfolios of commercial real estate
loans, construction loans and consumer loans. To a lesser extent, Fulton Savings
originates land loans. Underscoring the change in portfolio composition, while
gross loans increased from $63.3 million at April 30, 1994 to $78.4 million at
April 30, 1996, the proportion of 1-4 family loans dropped from 66.5 percent to
59.6 percent. Thus, the Bank's credit risk profile has increased in the most
recent two year period.
As of April 30, 1996, residential mortgage loans secured by 1-4 family
properties totaled $46.7 million, or 59.6 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
essentially all of these loans sold in the secondary market without recourse to
FHLMC or FNMA as part of the Bank's asset-liability management strategy. The
Bank retains the servicing on fixed rate loans sold in the secondary market.
Approximately 90 percent of the Bank's residential mortgages held in
portfolio consisted of ARMs at April 30, 1996. Fulton Savings offers ARMs with
one- or three-year adjustment periods that are indexed to the national quarterly
cost of funds index as published by the OTS plus a margin of approximately 3.0
percent. The majority of ARMs are originated with annual adjustment caps of 1.0
to 1.5 percent, and lifetime adjustment
<PAGE>
RP Financial, LC.
Page 1.11
caps of 4.5 to 6.0 percentage points. Until recently Fulton Savings adjustable
rate residential mortgage loans utilized the 8th District Cost of Funds Index,
and thus most of the existing portfolio is based on this index. Generally, ARMs
are retained for portfolio as part of asset/liability management strategy,
although the Bank does sell a portion of ARMs to other financial institutions
(with servicing retained) in the central Missouri region. All loan sales are
completed without recourse.
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"). Essentially all of the
residential mortgages originated by the Bank are secured by property in the
local market area.
The Bank has historically been an active originator of multi-family and
non-residential real estate loans. As of April 30, 1996, multi-family real
estate loans totaled $3.8 million, while non-residential real estate loans
totaled $8.7 million, for a total of $12.6 million or 16.0 percent of gross
loans receivable. The Bank's commercial real estate portfolio consists of loans
secured by residential care facilities, nursing homes, medical buildings, small
shopping centers, small office buildings and churches, most of which are located
in central Missouri, including the metropolitan area of Columbia, Missouri.
Based on availability of funds and as market conditions permit, the Bank has in
the past and intends to continue a practice of selling participation interests
in the income property loans it originates. Generally, Fulton Savings retains a
portion of the loan balance sold (10-20 percent), and retains servicing rights
on loans sold. Commercial real estate loans originated by Fulton Savings are
predominantly adjustable rate loans that generally have terms of up to 20 years.
LTVs on income property loans typically do not exceed 75 percent. The Bank seeks
to manage credit risk by lending primarily on local property and to borrowers
with whom management is familiar.
Construction and land loans totaled $9.2 million, or 11.7 percent of gross
loans receivable, at April 30, 1996. Construction loans are made on both
residential property and multi-family or non-residential property. These loans
are structured as interest-only during the construction period, which generally
equals six months. Most construction loans are extended directly to the
purchaser of the home and are originated with the intention of assuming the
permanent financing upon completion of the construction period. The Bank will
occasionally extend construction loans directly to builders for the construction
of speculative homes, although such speculative construction lending is limited.
Construction loans have maximum LTV ratios of 80 to 85 percent, depending upon
the security type. The Bank also occasionally originates loans for the
acquisition of land upon which the purchaser can then build or make improvements
necessary to build or sell as improved lots. As of April 30, 1996, the Bank had
land loans totalling $1.5 million. Land loans originated by the Bank generally
have a term to maturity of up to 10 to 20 years. Maximum LTVs are limited to 65
percent.
<PAGE>
RP Financial, LC.
Page 1.12
Fulton Savings has also actively originated consumer loans, which totaled
$9.9 million, or 12.6 percent of assets at April 30, 1996. The Bank offers a
variety of types of consumer loans, including automobile loans, loans secured by
deposit accounts, home improvement loans, education loans and other secured and
unsecured loans. The most prominent type of consumer loan in the portfolio is
secured consumer loans.
As shown in Exhibit I-10, Fulton Savings' overall loan origination volume
increased from $36.0 million in 1995 to $51.3 million for fiscal 1996. The
Bank's origination activity has occurred in both fixed-rate and adjustable-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 balance of loans
sold also include commercial real estate loans sold to other local financial
institutions with a portion of the loan balance retained by the Bank. The table
highlights the Bank's increased emphasis on commercial real estate,
construction, land and consumer lending, with originations increasing from $14.3
million, or 33.1 percent, of loan originations in fiscal 1994 to $26.0 million,
or 51.1 percent of loan originations for fiscal 1996.
Asset Quality
- -------------
As shown in Exhibit I-11, 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 April 30, 1996, NPAs (including restructured
loans), totaled $787,000, or 0.92 percent of assets, and consisted of $319,000
of non-accruing loans, $197,000 in REO and $271,000 of restructured loans. The
Bank experienced an increase in NPAs from $431,000, or 0.54 percent of assets,
at fiscal year end 1995, due to an increase in both non-accruing loans and REO.
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 April 30, 1996, the GVA balance totaled $782,000, or
99.36 percent of NPAs and 1.07 percent of loans. 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 $70.3 million, or 82.2 percent of assets, at
April 30, 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-12). As with most savings
institutions, CDs have been the Bank's primary
<PAGE>
RP Financial, LC.
Page 1.13
source of deposits (see Exhibit I-13), and as of April 30, 1996, the CD
portfolio totaled $55.4 million, or 78.8 percent of deposits. While the majority
of the Bank's CDs are short-term (approximately 61 percent were scheduled to
mature in one year or less at April 30, 1996), the Bank has made progress in
lengthening the maturity of the overall CD portfolio. Jumbo CDs, which tend to
be more rate sensitive than other types of CDs, totaled $5.9 million, or 8.4
percent of total CDs, at April 30, 1996. The Bank does not offer premium rates
on jumbo CDs and does not utilize brokered CDs. In light of current loan demand
and the capital level, the Bank has offered more aggressive rates for certain
deposit products in recent periods.
Lower costing transaction and savings accounts comprised the balance of the
Bank's deposits, totaling $14.9 million, or 21.2 percent of total deposits, at
April 30, 1996. Passbook accounts comprised the majority of these non-CD
deposits, totaling $5.9 million, followed by NOW accounts ($4.3 million), MMDA
accounts ($3.0 million) and non-interest checking accounts ($1.7 million).
Consistent with the general increase in short-term interest rates during fiscal
1995 and 1996, the Bank has experienced a moderate internal deposit shift into
higher rate CDs, particularly from MMDA accounts, which has increased the Bank's
cost of funds.
Borrowings have been utilized by the Bank in the most two recent fiscal
years as a supplemental funding source to meet the growing demand for loans (see
Exhibit I-14). Specifically, as of April 30, 1995 the Bank had borrowed $4.5
million in short- to intermediate-term advances from the FHLB of Des Moines. At
April 30, 1996, the outstanding balance totaled $5.0 million and had a weighted
average interest rate of 6.75 percent. 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, Multi-Purpose Service Agency, Inc.
("Service Corporation"). Service Corporation was established for the purpose of
offering credit life insurance to Bank customers. At April 30, 1996, the Bank's
investment in Service Corporation was a deficit of $68,000, and income from this
subsidiary 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
- ------------
Fulton Savings conducts operations out of its headquarters office in
Fulton, Callaway County, Missouri, and a branch office located in Holts Summit,
also in Callaway County. Exhibit I-1 details the locations of the Bank's
offices, while Exhibit II-1 details the general characteristics of the Bank's
offices. The city of Fulton, the county seat, serves as the economic and
employment center of Callaway County. Additional employment and economic
activity is present in the nearby larger metropolitan areas of Columbia (Boone
County) and Jefferson City (Cole County), as Columbia provides significant
employment in education (the University of Missouri) and medicine, and Jefferson
City serves as the location of the state capital of Missouri, resulting in a
significant concentration of government employment. While Callaway County is a
more rural county with a much lower population base and overall smaller economy
than Boone and Cole Counties, the economy has been stable historically due to
the economies in contiguous counties. Callaway County represents the Bank's
primary market area for deposit generation as most of Fulton Savings' depositors
live in this county, particularly in the areas surrounding the Bank's office
locations. Lending activities are concentrated both in Callaway County and the
city of Columbia, as the larger metropolitan area in Columbia provides
additional lending opportunities. While Callaway County is not included in any
regional metropolitan statistical area ("MSA"), the city of Columbia is located
in the Columbia MSA, defined as Boone County.
In general, the Bank serves an average growth market area. The Callaway
County economy, historically based on agriculture, has diversified in recent
years to include employment in health care, education, manufacturing and
local/state government. A large utility electrical generation plant is also
located in this county. Following an economic slowdown in the mid-1980s, the
economy of the market area has recovered and been relatively stable over the
past decade. The Boone County market area has historically been very stable due
to the presence of the University of Missouri and related employment and
employment in the health care sector.
Competition from other financial institutions operating in Callaway
County includes five commercial banks and two other savings institutions, of
which only one commercial bank has a larger presence than Fulton Savings. The
Bank maintains a market share of approximately one-fourth of overall financial
institution deposits in Callaway County, providing an opportunity to operate
competitively in the marketplace. Similar to the Bank, the other financial
institutions are locally-owned community-oriented banks and savings
institutions. While the Bank has strived to remain competitive, both from a rate
and service perspective, until recently Fulton Savings has experienced little
growth in deposits and market share due to increases in deposits of the
commercial bank and savings institution competitors.
<PAGE>
RP FINANCIAL, LC.
Page 2.2
Future business and growth opportunities for Fulton Savings will be
partially influenced by economic and demographic characteristics of the market
served, particularly the future growth and stability of the regional economy,
demographic growth trends, and the nature and intensity of the competitive
environment for financial institutions. These factors have been briefly
examined in the following pages to help determine the growth potential that
exists for the Bank and the relative economic health of the market area, and the
related impact on value.
National Economic Factors
- -------------------------
The nation's economy generally advanced at a moderate pace during the
second half of 1995, with inflation continuing to remain under control. Gross
domestic product ("GDP") growth in the third quarter was reported at an annual
rate of 3.2 percent, as construction picked up in most regions of the U.S. and
retail prices remained relatively stable. The Federal Reserve cut short-term
interest rates by 0.25 percent in early-July 1995, which improved the business
outlook for future expansion. Economic data through most of the fourth quarter
of 1995 suggested that the economy was slowing and GDP growth was reported at
0.5 percent for the fourth quarter of 1995, as weak retail sales during the
holiday shopping season and a slight increase in the November unemployment rate
provided indications of a slowing national economy at the end of the fourth
quarter.
Despite the adverse winter conditions in early 1996, a strike by General
Motors Corporation workers, weak manufacturing orders and minimal growth in
personal income, GDP growth for the first quarter of 1996 was reported at a
moderate 2.2 percent annual rate. While the winter weather caused reductions in
consumer spending in January and low growth in personal income, economic reports
for February indicated that pent-up demand resulted in increases in personal
income, consumer spending and auto sales. Auto sales for March 1996 were
characterized as strong, and gasoline prices reached a 12-year high reflecting
earlier than usual spring-time demand for fuel. Negative trends reported in the
first quarter of 1996 included lower planned capital investment spending by
businesses, a decline in new home sales in February, and mixed performance of
the index of leading economic indicators. Economic data released in April
included continued moderate levels of capital spending by business, an increase
in durable goods production, although the manufacturing sector remained weak.
Signs of a strengthening economy were evident in the second quarter of 1996, as
unemployment remained low and consumer spending for May was up strongly. A
higher than expected job creation report for June and a strong increase in the
average hourly earnings resulted in an additional decline in the unemployment
rate to 5.3 percent, and a sharp one day decline in the Dow Jones Industrial
Average of 115 points, or over 2 percent during the first week in July. As of
early July 1996, economists were predicting GDP growth in the range of 4.0
percent for the second calendar quarter of 1996, although most economists are
expecting a slowdown in the economy later in calendar year 1996.
<PAGE>
RP Financial, LC.
Page 2.3
Interest rates trended lower in the second half of 1995 to their lowest
level in almost two years as continued favorable inflation news, federal reserve
action and strong performance in the stock market resulted in higher bond
prices. Signs of economic weakness in the fourth quarter of 1995 further served
to push interest rates lower, with expectations increasing that the weak economy
would support an interest rate cut by the Federal Reserve. The Federal Reserve
cut short-term interest rates by 0.25 percent in late-December, which served to
push interest rates lower through the end of 1995. The absence of progress in
the budget negotiations pushed bond prices lower at the beginning of 1996, as
the credit markets became increasingly concerned that no balance budget deal
would be reached in the near term. However, bond prices generally stabilized in
late-January, in light of the favorable inflation data and increasing
expectations of another interest rate cut by the Federal Reserve. At its
January meeting, the Federal Reserve trimmed two short-term interest rates by
0.25 percent. Interest rates increased in February 1996 due to uncertainty over
the Republican Party's eventual success in cutting the federal budget deficit
and trends in the presidential campaign. A report of high growth in employment
in early March (and a belief that the Fed would not cut rates during March),
resulted in a jump in interest rates to levels not seen for over two years.
During April 1996 interest rates increased to levels above 7.0 percent due to
higher than expected job creation reports, however subsequent data issued by the
Federal Reserve indicated that inflation remained in check and that near term
interest rate increases were not likely. Following a period of fluctuating
interest rates in May and early June, signs of an accelerating economy and
revised upward estimates of second and third quarter GDP growth provided for a
sharp rise in interest rates in early July 1996. As of July 12, 1996, one- and
thirty-year U.S. Government bonds were yielding 5.84 percent and 7.06 percent,
respectively, versus comparative year ago rates of 5.44 percent and 6.54
percent. Exhibit II-2 presents data regarding historical market interest rate
trends.
Market Area Demographics
- ------------------------
Demographic growth trends in the Bank's primary market area of Callaway
County have been measured by changes in population, number of households and
median household income and other data, with trends in those areas summarized by
the data presented in Table 2.1. Information is included for Boone County as the
Bank pursues lending opportunities in that area. Missouri and the U.S. data is
provided for comparative purposes, and trends in this data provide some
indication of future levels of business activities for financial institutions.
Over the last five years, both Callaway and Boone County have
experienced growth in population and households exceeding the state and national
averages in percentage terms, although the absolute growth is small given the
relatively small size of the Bank's market. Callaway and Boone County's
estimated population is currently 159,000, with Callaway County having an
estimated population of only 35,000. The growth reflects
<PAGE>
Table 2.1
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>
(%) (%)
UNITED STATES 248,710 263,006 277,084 1.1% 1.0%
MISSOURI 5,117 5,318 5,536 0.7% 0.8%
CALLAWAY 33 35 37 1.2% 1.1%
BOONE 112 124 134 1.8% 1.7%
Households (0000)
- -----------------------
United States 91,947 97,070 102,202 1.1% 1.0%
Missouri 1,961 2,039 2,123 0.7% 0.8%
Callaway 12 12 13 1.1% 1.2%
Boone 42 47 51 2.0% 1.8%
Median Household Income ($)
- -----------------------
UNITED STATES $29,199 $33,610 $32,972 2.9% -0.4%
MISSOURI 26,417 28,782 27,847 1.7% -0.7%
CALLAWAY 26,668 27,845 27,181 0.9% -0.5%
BOONE 25,862 28,295 27,234 1.8% -0.8%
Per Capita Income - 1995 ($)
- ----------------------------
UNITED STATES $13,179 $16,405 ------ 4.5% -----
MISSOURI 12,987 14,388 ------ 2.1% -----
CALLAWAY 11,013 11,723 ------ 1.3% -----
BOONE 12,726 14,381 ------ 2.5% -----
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
CALLAWAY 22.3 16.3 29.9 19.3 12.1 32.6
BOONE 20.5 20.0 35.7 15.5 8.3 27.7
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
CALLAWAY 22.2 20.3 39.6 16.6 1.2 0.2
BOONE 25.4 18.1 32.9 19.9 2.5 1.2
</TABLE>
Source: CACI.
<PAGE>
RP Financial, LC.
Page 2.5
expansion of the local economy in various industry segments, and the presence of
the metropolitan areas of Columbia and Jefferson City. Such trends are expected
to continue, although the total population base is small. The growth has been
partially abated by the agriculture base in rural areas. Agriculture is a sector
of the economy which has experienced slow growth or contraction in recent
paralleling national trends.
While Callaway and Boone Counties maintain median household income
levels comparable to the state level, the per capita income figures for Callaway
County currently approximate 81 percent of the state level. Age distribution
figures show that Callaway and Boone Counties have a higher proportion of
residents between the ages of 15 and 24, reflecting the presence of two
universities in Fulton, William Woods University and Westminster College, and
the University of Missouri in Columbia. Income distribution levels also show
that Callaway County has a higher proportion of lower income households (below
$50,000 annually), reflecting the more rural nature of the county, while Boone
County has a household income profile that more matches statewide averages. The
Callaway County population (the location of the Bank's office locations) is
projected to continue to expand at a higher rate than statewide, although the
absolute increase will be small, thus growth opportunities in this competitive
market are expected to be limited with competitive marketing, service and rate
competition.
Economy
- -------
As a majority of the Bank's business activities are conducted in
Callaway County and the city of Columbia (primarily lending), the Bank's market
area economy is dominated by the Callaway County economy with secondary effects
by the Columbia area and, to a lesser extent, Jefferson City. Employment in
Callaway County is generally diversified, containing employment in health care,
utilities, education, manufacturing, other services and local government.
Manufacturing is represented by a number of smaller manufacturing facilities.
Education is represented by the local public schools, Westminster College and
William Woods University. Employment in Columbia is heavily weighted in the
education, insurance and health care sectors, while Jefferson City also contains
significant employment centered around the state government activities and the
resulting peripheral employment. Table 2.2 on the following page displays a list
of major employers in Callaway County, and the Columbia/Boone County and
Jefferson City/Cole County areas. Exhibit II-3 present additional data
concerning sources of personal income and employment sectors.
<PAGE>
RP FINANCIAL, LC.
Page 2.6
Table 2.2
Major Market Area Employers
<TABLE>
<CAPTION>
Employer Industry Employees
- -------- -------- ---------
<S> <C> <C>
Callaway County
Fulton State Hospital Mental Institution 1,260
Union Electric Company Utility 1,000
Stride Rite Shoe Manufacturing 340
Missouri Recep. and Diag. Correctional Facility 270
Fulton Public Schools Education 250
William Woods University Education 203
Missouri School for the Deaf Education 181
Westminster College Education 175
Ovid Bell Press Printing 167
City of Fulton Local Government 150
Callaway Community Hospital Health Care 150
Columbia City/Boone County
University of Missouri Education 12,936
University of Missouri Hospital Health Care 3,217
Boone County Hospital Health Care 1,450
Board of Education Public Schools 1,300
AB Chance Metal Products Manuf 1,200
Truman Memorial Veteran's Hospital Health Care 1,130
Columbia Regional Hospital Health Care 950
Shelter Insurance Company Insurance 915
City of Columbia Local Government 900
Jefferson City/Cole County
Missouri State Govt. State Govt. 13,000
Scholastic, Inc. Book Distributor 1,350
Capital Region Medical Center Medical Center 1,070
Jefferson City Public Schools Public Schools 930
ABB Power Underground Trans. 900
St. Mary's Health Center Medical Center 800
Lincoln University Education 711
Cheesbourgh Ponds, Inc. Personal Products 600
Wal-Mart Super Center Retailing 521
Von Hoffman Press Printing 357
Modine Manufacturing Manufacturing 352
</TABLE>
Source: Local Area Chambers of Commerce
<PAGE>
RP Financial, LC.
Page 2.7
Table 2.3 displays unemployment data in the market area as of April 1996
and April 1995. The unemployment rates for Callaway and Boone Counties remain
well below state and national averages. This data reflects in part the
employment opportunities in Callaway County and in nearby Columbia and Jefferson
City and attractiveness of the Callaway County market area for employers versus
more rural areas of the state.
Table 2.3
Market Area Unemployment Trends
<TABLE>
<CAPTION>
Region April 1995 April 1996
- ------ ---------- ----------
<S> <C> <C>
United States 5.6% 5.4%
Missouri 4.8 4.1
Callaway County 2.9 3.5
Boone County 1.8 1.4
</TABLE>
Source: U.S. Bureau of Labor Statistics
Deposit Trends and Competition
- ------------------------------
Fulton Savings' market area (defined as Callaway County for deposits),
is characterized by the presence of a number of locally-based and locally-owned
financial institutions, including commercial banks and savings institutions. In
Callaway County there are five commercial banks, of which only one has an asset
size and deposit base larger than that of Fulton Savings. A total of three
savings institutions with four office locations operate in Callaway County, and
Fulton Savings holds a majority of savings institution deposits. As a portion of
Callaway County residents commute to work in either Columbia or Jefferson City,
and thus there is strong competition from other financial institutions in these
larger metropolitan areas, including credit unions.
Table 2.4 displays deposit market trends for the state of Missouri and
the primary market area from June 30, 1993 to June 30 1995. Overall, financial
institution deposits showed an increase statewide, with commercial banks and
credit union deposits showing growth, while savings institutions lost deposits.
This trend of minimal increases in overall deposits, similar to the rest of the
nation, reflects in part disintermediation whereby banking customers have also
placed available funds into other types of financial intermediaries such as
mutual funds, investment firms, brokerage houses, and insurance companies. The
significant shrinkage in SAIF-insured thrift deposits in Missouri was due to a
number of thrift acquisitions by commercial banks during this time period
coupled with the impact of disintermediation.
<PAGE>
RP Financial, LC.
<TABLE>
<CAPTION>
-----------------------------------
Table 2.4
Deposit Summary
-----------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
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 $68,988,093 100.0% 1,639 $70,250,832 100.0% 2,132 0.9%
Commercial Banks 54,506,985 79.0% 1,330 56,816,569 80.9% 1,584 2.1%
Credit Unions 3,274,400 4.7% N/A 3,486,264 5.0% 284 3.2%
Savings Institutions 11,206,708 16.2% 309 9,947,999 14.2% 264 -5.8%
Callaway County $273,031 100.0% 15 $274,968 100.0% 15 0.4%
Commercial Banks 186,659 68.4% 11 185,187 67.3% 11 -0.4%
Credit Unions 0 0.0% 0 0 0.0% 0 0.0%
Savings Institutions 86,372 31.6% 4 89,781 32.7% 4 2.0%
Fulton Savings Bank(1) 65,088 75.4% 2 66,442 74.0% 2 1.0%
Fulton Savings Bank(2) 23.8% 24.2%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Percent of county S&L/bank deposits.
(2) Percent of total county deposits.
Source: FDIC; OTS; Thompson Credit Union Directory.
<PAGE>
RP Financial LC.
Page 2.9
Deposit trends in Callaway County also exhibited a slight deposit
increase, as total deposits increased by 0.4 percent over the two year period,
however contrary to state and nationwide trends savings institutions gained
market share to commercial banks. Fulton Savings holds a relatively large
percentage of overall deposits in Callaway County and experienced a slight
increase in deposits.
Summary
- -------
The overall condition of the Bank's market area can be characterized as
relatively stable with a diversified economy and low unemployment. Going
forward, in view of the numbers and types of competitors in Callaway County, the
competition for deposits is expected to remain substantial, which will result in
Fulton Savings having to pay competitive deposit rates to maintain local market
share. The reinvestment of stock proceeds from the conversion may mitigate to
some extent the potentially higher funding costs to attract deposits through
anticipated loyalty of local shareholders and referrals from local shareholders.
<PAGE>
RP Financial, LC.
Page 3.1
III. PEER GROUP ANALYSIS
This chapter presents an analysis of Fulton Savings' 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 Fulton Savings' 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 Fulton Savings 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 states
contiguous to Missouri. 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 less than $300 million,
--------------------------------------------------------------------
well-capitalized (equity-to-asset ratios greater than 10.0 percent).
--------------------------------------------------------------------
Eleven companies met the criteria for Screen #1 and eight were included
in the Peer Group (see Exhibit III-2): Companies excluded from the Peer
Group consisted of three companies who have recently completed
conversions (JOAC - Joachim Bancorp, CNSB - CNS Bancorp, and LXMO -
Lexington B&L Fin. Corp.).
<PAGE>
RP Financial LC.
Page 3.2
o Screen #2. Companies located in contiguous states, assets of $150
------------------------------------------------------------------
million or less, well-capitalized (equity-to-asset ratios between 15.0
----------------------------------------------------------------------
percent and 25.0 percent) and moderate to strong earnings (ROA greater
----------------------------------------------------------------------
than 0.50 percent of average assets and less than 1.25 percent of
-----------------------------------------------------------------
average assets). After all qualifying Missouri institutions were
----------------
considered, we expanded our selection process to consider other
institutions in the states contiguous to Missouri meeting the above
listed criteria. A total of 3 institutions met the foregoing screening
criteria as indicated by the underlined institutions in Exhibit III-3.
Two of these companies, SFFC - StateFed Financial Corp. of IA and KYF -
Kentucky First Bancorp of KY were included in the Peer Group. The
excluded company, NBSI - North Bancshares of Chicago, IL was excluded
due to its location in the large metropolitan Chicago, IL area.
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). 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 lending diversity in the areas of construction/land and
commercial real estate 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 higher
capital ratio 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 northwest Missouri area.
Cameron is one of five Peer Group members who converted during 1995, and
operates with a high capital level (26.5 percent, the highest in the Peer
Group), higher than the Bank on a pro forma basis. Cameron is diversified
primarily into construction lending, which make its earnings and risk
profiles similar to Fulton Savings', although Cameron is substantially more
profitable than the Bank due to lower operating expenses and lower interest
expense.
o Southern Missouri Bancorp of Poplar Bluff, Missouri. Southern Missouri is
a $162 million thrift operating eight branches in a rural market in the
southern part of the state. Operating in a low growth market, Southern
Missouri maintains a high proportion of assets in cash and investments and
MBS. Southern Missouri is a less diversified lender than Fulton Savings,
and has a similar income statement structure to Fulton Savings.
<PAGE>
RP FINANCIAL, LC.
------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.1
Peer Group of Publicly-Traded Thrifts
July 19, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------- ----------------------------------- ------ ----------------- --------- ------ ------- ---- ----- ------ -------
($) ($Mil)
<S> <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 16.00 29
CAPS Capital Savings Bancorp of MO OTC Central MO Thrift 203 7 06-30 12/93 18.12 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 14.12 24
FBSI First Bancshares of MO OTC Southcentral MO Thrift 140 5 06-30 12/93 15.63 20
KYF Kentucky First Bancorp of KY AMEX Central KY Thrift 84 2 06-30 08/95 15.00 21
HFSA Hardin Bancorp of Hardin MO OTC Western MO Thrift 83 3 03-31 09/95 11.75 12
PCBC Perry Co. Fin. Corp. of MO OTC EastCentral MO Thrift 77 D 1 09-30 02/95 16.25 14
SFFC StateFed Financial Corp. of IA OTC Des Moines IA Thrift 74 2 06-30 01/94 15.75 13
NSLB NS&L Bancorp of Neosho MO OTC Southwest MO Thrift 59 2 09-30 06/95 12.56 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: 07/19/96
<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 Kentucky First Bancorp of Cynthiana, Kentucky. Kentucky First is one of
two non-Missouri companies in the Peer Group. Kentucky First had $84
million in assets and operates out of two offices in Cynthiana, a small
town in northern Kentucky approximately 25 miles north of Lexington.
Kentucky First maintains substantial portfolios of cash and investments and
MBS, which result in low operating expenses and higher earnings than Fulton
Savings. Lending at Kentucky First is diversified into commercial real
estate loans.
o Hardin Bancorp of Hardin, Missouri. Hardin Bancorp is an $83 million asset
company operating out of three offices in west-central Missouri. Hardin
Bancorp diversifies its earning assets by maintaining a relatively high
proportion of mortgage backed securities, which lowers the yield on earning
assets. This disadvantage is offset in part by maintaining lower than
average operating expenses.
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 fourth Peer Group member who converted in
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 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 second 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 fifth Peer Group
member who converted during 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 (19.0 percent of assets versus 13.3 percent for the
all SAIF average), and higher core profitability (0.98 percent versus 0.80
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 5.45 percent versus 7.21 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 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
<PAGE>
RP Financial, LC.
Page 3.5
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 July 12, 1996
--------------------
Peer All SAIF
Group Insured
------- ---------
<S> <C>
Equity-to-Assets 18.96% 13.30%
Return on Assets ("ROA")-Core 0.98% 0.80%
Return on Equity ("ROE")-Core 5.45% 7.21%
Market Capitalization ($Mil) $20.36 $115.39
Price-to-Book Ratio ("P/B") 87.86% 102.41%
Price-to-Earnings Multiple
("P/E")-Core 17.73x 15.01x
Price-to-Assets Ratio ("P/A") 16.62% 12.87%
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. Information for Fulton Savings is as of
April 30, 1996, while 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 10.7 percent was well below the Peer Group's average net worth ratio of 19.0
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.
The asset compositions of the Bank and the Peer Group were similar, with
loans receivable constituting the majority of interest earning assets ("IEA")
for both. The Bank's ratio of loans to assets exceeded the Peer Group's ratio
(89.1 percent of assets versus 63.0 percent for the Peer Group), while the Peer
<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>
Fulton SB, FSB of Fulton, MO
- ----------------------------
April 30, 1996 7.9 89.1 0.0 82.2 5.9 0.0 10.7 0.0 10.7 0.0
SAIF-Insured Thrifts 19.4 64.4 12.9 73.8 11.8 0.1 12.8 0.2 12.6 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 20.0 63.0 14.3 70.9 9.1 0.0 19.0 0.0 19.0 0.0
Mid-West Companies 20.0 63.0 14.3 70.9 9.1 0.0 19.0 0.0 19.0 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
HFSA Hardin Bancorp of Hardin MO 14.4 54.0 29.0 79.9 0.0 0.0 19.2 0.0 19.2 0.0
KYF Kentucky First Bancorp of KY 22.0 49.7 25.6 60.9 14.8 0.0 23.6 0.0 23.6 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
State of MO
- -----------
CNSB CNS Bancorp of MO(3) 19.4 60.9 15.6 88.4 0.0 0.0 10.7 0.0 10.7 0.0
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
GSBC Great Southern Bancorp of MO 13.6 82.8 0.0 59.3 29.8 0.0 10.1 0.2 10.0 0.0
GFED Guaranty FS&LA, MHC of MO(31.1) 14.0 70.3 11.4 84.5 0.0 0.0 14.6 0.0 14.6 0.0
HFSA Hardin Bancorp of Hardin MO 14.4 54.0 29.0 79.9 0.0 0.0 19.2 0.0 19.2 0.0
JSBA Jefferson Svgs Bancorp of MO(1) 15.8 69.0 12.1 76.1 15.3 0.0 7.0 1.3 5.8 0.0
JOAC Joachim Bancorp of MO 35.4 62.4 0.3 69.7 0.0 0.0 29.2 0.0 29.2 0.0
LXMO Lexington B&L Fin. Corp. of MO(3) 13.6 80.2 4.6 84.2 0.0 0.0 14.7 0.0 14.7 0.0
MBLF MBLA Financial Corp. of MO(2) 10.8 53.5 34.9 44.7 40.1 0.0 14.5 0.0 14.5 0.0
MFSB Mutual Bancompany of MO(2) 14.7 73.6 8.9 85.9 1.7 0.0 11.7 0.0 11.7 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
NASB North American SB of MO 3.4 83.5 9.9 78.9 12.0 0.0 7.3 0.3 7.1 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
PULB Pulaski SB, MHC of MO (29.0) 13.5 80.9 3.6 84.4 1.7 0.0 12.6 0.0 12.6 0.0
RFED Roosevelt Fin. Grp. Inc. of MO 3.4 41.3 52.2 53.9 38.8 0.3 5.6 0.3 5.3 0.7
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
</TABLE>
<TABLE>
<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>
Fulton SB, FSB of Fulton, MO
- ----------------------------
April 30, 1996 7.74 -24.82 11.44 7.84 11.11 7.46 7.46 10.64 10.64 18.46
SAIF-Insured Thrifts 11.74 10.64 9.55 6.71 -0.87 6.69 6.20 10.46 10.52 22.82
State of MO 11.05 6.33 12.01 7.16 -39.31 8.38 6.94 12.47 12.49 28.96
Comparable Group Average 14.22 -1.15 18.13 2.74 -26.32 -0.29 -0.28 14.60 14.60 35.11
Mid-West Companies 14.22 -1.15 18.13 2.74 -26.32 -0.29 -0.28 14.60 14.60 35.11
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
HFSA Hardin Bancorp of Hardin MO 9.73 -5.87 12.21 -1.25 -100.00 NM NM 13.81 13.81 32.30
KYF Kentucky First Bancorp of KY 33.27 27.35 36.54 -4.72 NM NM NM 20.59 20.59 42.77
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
State of MO
- -----------
CNSB CNS Bancorp of MO(3) -0.43 -5.35 1.92 -0.91 NM 4.50 4.50 11.26 11.26 27.08
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
GSBC Great Southern Bancorp of MO 7.98 12.42 7.43 2.09 22.01 8.59 8.90 8.70 8.70 13.40
GFED Guaranty FS&LA, MHC of MO(31.1) 10.19 -16.72 14.84 14.43 -100.00 46.99 46.99 13.80 13.80 26.87
HFSA Hardin Bancorp of Hardin MO 9.73 -5.87 12.21 -1.25 -100.00 NM NM 13.81 13.81 32.30
JSBA Jefferson Svgs Bancorp of MO(1) 32.81 28.17 31.54 69.98 -33.21 10.33 -9.60 5.85 5.85 11.98
JOAC Joachim Bancorp of MO 22.55 92.84 3.62 0.66 NM NM NM 21.50 21.50 44.10
LXMO Lexington B&L Fin. Corp. of MO(3) 3.56 39.84 -0.41 2.18 NM 9.38 9.38 14.38 14.38 29.20
MBLF MBLA Financial Corp. of MO(2) 1.80 6.66 1.29 1.94 1.69 0.19 0.19 13.65 13.62 39.50
MFSB Mutual Bancompany of MO(2) -6.37 -16.25 -4.59 -4.42 -66.04 3.28 3.28 10.90 10.90 24.00
NSLB NS&L Bancorp of Neosho MO 19.17 32.44 12.82 4.17 NM NM NM 17.50 17.50 49.80
NASB North American SB of MO 11.43 -43.69 16.20 3.50 NM 13.71 14.84 7.10 7.40 12.40
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
PULB Pulaski SB, MHC of MO (29.0) -3.07 35.22 -7.43 -0.36 -66.67 5.05 5.05 12.50 12.50 28.90
RFED Roosevelt Fin. Grp. Inc. of MO 0.88 -2.67 1.24 1.37 -1.29 15.97 15.61 5.42 5.45 14.26
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
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
(2) Excluded from averages due to announced or pending acquisition.
(3) Growth rates have been annualized from available financial information.
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
Group recorded a higher level of MBS (14.3 percent versus zero 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 7.9 percent of total
assets. In contrast, the Peer Group maintained a substantially higher ratio of
cash and investments (20.0 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 97.0 percent of assets, which was
lower than the Peer Group's ratio of 97.3 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 82.2 percent and 70.9 percent, respectively. Likewise, both the Bank and the
Peer Group used borrowings as a supplemental source of funds, with borrowings to
assets ratios of 5.9 percent and 9.1 percent, respectively. Total interest-
bearing liabilities ("IBL") maintained by the Bank and the Peer Group equaled
88.1 percent and 80.0 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 fiscal year ended April
30, 1996 while growth rates for the Peer Group are for the latest trailing
twelve months available. The Bank reported an increase in assets of 7.74 percent
since April 30, 1995, while the Peer Group reported asset growth equal to 14.22
percent, higher than industry averages. The Bank's balance sheet expansion
occurred in the area of loans receivable, with cash and investments declining to
fund additional increases in loans receivable. Asset growth was support by
growth in deposits, borrowings and equity. The higher asset growth rate for the
Peer Group was influenced by the recent conversions of some of the Peer Group
members, and the Peer Group also directed funds into loans receivable. 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 April 30, 1996, the Bank's net income
amounted to 0.75 percent of average assets, below the 0.99 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 (2.89 percent of average assets versus 3.20 percent
for the Peer Group). The Bank's lower net interest income was attributable to
substantially higher interest expense (4.57 percent of average assets versus
3.99 percent for the Peer Group), which resulted from Fulton Savings' higher
cost of funds and lower capital ratio. The Bank's higher interest expense ratio
more than offset Fulton Savings' higher interest income ratio (7.46 percent for
the Bank versus 7.19 percent for the Peer Group). Fulton Savings' interest
income was supported by the higher proportion of earning assets in whole loans
receivable and the greater loan portfolio diversification into higher yielding
commercial real estate, construction and consumer loans. 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
higher operating expense ratio than the Peer Group (2.24 percent versus 1.96
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 ($2.442
million and $4.122 million, respectively). Going forward, Fulton Savings'
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 10 to 15 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 an advantage over the Bank based on
expense coverage ratios of 1.63 and 1.29 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
---------------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loss NII Total
Net Provis. After Loan R.E. Other Other
Income Income Expense NII on IEA Provis. Fees Oper. Income Income
------ ------ ------- ------ ------- ------- ---- ------ ------ ------
Fulton SB, FSB of Fulton, MO
----------------------------
April 30, 1996 0.75 7.46 4.57 2.89 0.05 2.84 0.34 0.00 0.25 0.59
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>
Fulton SB, FSB of Fulton, MO
---------------------------- 2.24 0.00 0.00 0.00 7.81 5.21 2.60 2,442 36.97
April 30, 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>
SAIF-Insured Thrifts 0.85 7.31 4.18 3.13 0.10 3.03 0.12 -0.01 0.30 0.41
State of MO 0.92 7.08 4.17 2.91 0.04 2.87 0.04 0.02 0.39 0.45
Comparable Group Average 0.99 7.19 3.99 3.20 0.04 3.16 0.03 0.04 0.22 0.29
Mid-West Companies 0.99 7.19 3.99 3.20 0.04 3.16 0.03 0.04 0.22 0.29
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>
SAIF-Insured Thrifts 2.20 0.02 0.09 0.00 7.53 4.82 2.72 4,042 36.29
State of MO 1.97 0.01 0.06 0.00 7.43 5.03 2.40 3,911 36.07
Comparable Group Average 1.96 0.00 0.02 0.00 7.44 4.96 2.48 4,122 34.79
Mid-West Companies 1.96 0.00 0.02 0.00 7.44 4.96 2.48 4,122 34.79
Net Interest Income Other Income
---------------------------- -------------------
Loss NII Total
Net Provis. After Loan R.E. Other Other
Comparable Group Income Income Expense NII on IEA Provis. Fees Oper. Income Income
---------------- ------ ------ ------- ------ ------- ------- ---- ----- ------- -------
Mid-West Companies
------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
HFSA Hardin Bancorp of Hardin MO 0.64 6.95 4.32 2.63 0.02 2.61 0.07 0.00 0.28 0.35
KYF Kentucky First Bancorp of KY 1.11 7.01 3.59 3.42 0.02 3.40 0.00 0.00 0.19 0.19
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
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
Comparable Group ---------------- -------------- ----------------------------
----------------
MEMO: MEMO:
G&A Goodwill Net Extrao. Yield Cost Yld-Cost Assets/ Effective
Mid-West Companies Expense Amort. Gains Items On Assets Of Funds Spread FTE Emp. Tax Rate
------------------ ------- ------- ------- ------ --------- -------- ------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
HFSA Hardin Bancorp of Hardin MO 1.98 0.00 0.00 0.00 7.08 5.15 1.93 4,389 35.07
KYF Kentucky First Bancorp of KY 1.99 0.00 0.00 0.00 7.24 4.55 2.68 3,817 30.93
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
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>
State of MO
-----------
CNSB CNS Bancorp of MO 0.37 5.70 3.72 1.99 0.06 1.93 0.00 0.00 0.46 0.46
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
GSBC Great Southeren Bancorp of MO 1.72 8.32 4.36 3.96 0.19 3.77 0.07 0.10 1.21 1.38
GFED Guaranty FS&LA,MHC of MO(31.1) 1.02 7.52 4.55 2.97 0.00 2.97 0.06 0.00 0.07 0.13
HFSA Hardin Bancorp of Hardin MO 0.64 6.95 4.32 2.63 0.02 2.61 0.07 0.00 0.28 0.35
JSBA Jefferson Svgs Bancorp of MO(1) 0.60 6.93 4.78 2.16 0.03 2.12 0.06 0.07 0.09 0.21
JOAC Joachim Bancorp of MO 0.63 7.13 3.52 3.61 0.04 3.58 0.05 -0.01 0.14 0.17
LXMO Lexington B&L Fin. Corp. of MO 0.81 4.85 3.71 1.15 0.05 1.10 0.00 0.00 1.59 1.59
MBLF MBLA Financial Corp. of MO(2) 0.70 6.84 4.92 1.92 0.00 1.92 0.00 0.00 0.01 0.01
MFSB Mutal Bancompany of MO(2) 0.21 6.44 4.34 2.10 0.04 2.06 0.00 0.00 0.17 0.17
NSLB NS&L Bancorp of Neasha MO 0.94 6.39 3.24 3.16 0.02 3.14 0.01 0.00 0.33 0.34
NASB North America SB of MO 1.33 8.32 5.00 3.33 -0.11 3.43 0.09 0.01 0.67 0.77
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
PULB Pulaski SB, MHC of MO (29.0) 0.84 7.26 3.94 3.32 0.03 3.29 0.00 0.00 0.28 0.28
RFED Roosevelt Fin. Grp. Inc. of MO 0.67 7.25 5.27 1.97 0.01 1.96 0.08 0.01 0.23 0.32
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 Southeren Missouri Bncrp of MO 0.87 6.95 4.01 2.94 0.04 2.90 0.03 0.04 0.29 0.35
G&A/Other Exp. Non-Op. Items Yields, Costs, and Spreads
---------------- --------------- ----------------------------
MEMO: MEMO:
G&A Goodwill Net Extrao. Yield Cost Yld-Cost Assets/ Effectiv
Expense Amort. Gains Items On Assets Of Funds Spread FTE Emp. Tax Rate
_______ _______ _______ _______ _________ ________ ______ __________ ________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
State of MO
- -----------
CNSB CNS Bancorp of MO 1.86 0.00 0.00 0.00 6.98 4.89 2.08 3,216 31.95
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
GSBC Great Southeren Bancorp of MO 2.51 0.01 0.17 0.00 8.66 4.91 3.76 1,739 38.31
GFED Guaranty FS&LA,MHC of MO(31.1) 2.20 0.00 0.70 0.00 7.83 5.39 2.44 3,255 36.07
HFSA Hardin Bancorp of Hardin MO 1.98 0.00 0.00 0.00 7.08 5.15 1.93 4,389 35.07
JSBA Jefferson Svgs Bancorp of MO(1) 1.37 0.05 0.02 0.00 7.12 5.24 1.88 4,969 35.70
JOAC Joachim Bancorp of MO 2.82 0.00 0.00 0.00 7.32 4.51 2.82 2,452 32.25
LXMO Lexington B&L Fin. Corp. of MO 1.53 0.00 0.00 0.00 6.04 5.35 0.69 5,074 46.29
MBLF MBLA Financial Corp. of MO(2) 0.80 0.00 0.01 0.00 6.90 5.80 1.10 16,256 38.03
MFSB Mutal Bancompany of MO(2) 2.23 0.00 -0.04 0.00 6.63 4.92 1.71 3,332 NM
NSLB NS&L Bancorp of Neasha MO 2.22 0.00 0.10 0.00 6.57 4.22 2.35 3,281 30.75
NASB North America SB of MO 2.19 0.03 0.09 0.00 8.60 5.49 3.11 2,815 39.93
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
PULB Pulaski SB, MHC of MO (29.0) 2.48 0.00 0.07 0.00 7.41 4.56 2.85 2,330 38.39
RFED Roosevelt Fin. Grp. Inc. of MO 0.93 0.02 -0.34 0.00 7.48 5.66 1.82 7,875 32.18
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
MBC Southeren Missouri Bncrp of MO 2.15 0.00 0.08 0.00 7.60 4.94 2.66 3,240 27.19
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
(2) Excluded from averages due to announced or pending acquisition.
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
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 April 30, 1996, the Bank
recorded non-interest operating income of 0.59 percent of average assets versus
a level of 0.29 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 Fulton Savings, as the Bank
derives substantially more non-interest income from loan servicing operations.
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.
During the most recent fiscal year, Fulton Savings has recorded no non-
recurring gains or losses. The Peer Group derived most of their earnings from
core sources of income and recorded only minimal non-recurring income, on
average. Going forward, non-operating gains and losses are expected to continue
to be minimal. Loan loss provisions for the Peer Group and Fulton Savings' were
similar at 0.04 and 0.05 percent of average assets, respectively.
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 59.6 percent and 62.1 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 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 greater diversification into higher
risk weight loans than the Peer Group's average loan portfolio. Commercial real
estate lending is the Bank's primary method of lending diversification, and such
loans comprised 16.0 percent of the total loan and MBS portfolio at April 30,
1996. The Bank also maintains a substantial balance of construction and land
loans, which totaled 11.7 percent of total loans and MBS. The Peer Group
achieved most of their loan portfolio diversification through a combination of
income property lending and construction lending, which averaged 9.39 percent
and 6.63 percent of total loans and MBS, respectively. Overall, however, the
Bank's loan portfolio diversification was
<PAGE>
RP FINANCIAL, LC.
- ------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.4
Loan Portfolio Composition and Related Information
Comparable Institution Analysis
As of March 31, 1996
<TABLE>
<CAPTION>
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>
Fulton SB, FSB of Fulton, MO 0.00 59.61 11.74 16.00 0.38 12.27
SAIF-Insured Thrifts 16.77 60.88 4.85 11.42 1.57 6.14
State of MO 18.00 64.36 7.12 8.92 0.81 3.25
Comparable Group Average 19.06 62.13 6.63 9.39 0.91 4.22
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
HFSA Hardin Bancorp of Hardin MO 37.34 54.18 2.44 0.32 0.40 6.65
KYF Kentucky First Bancorp of KY 18.36 47.25 1.09 26.18 2.90 4.60
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 0.84 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
State of MO
-----------
CNSB CNS Bancorp of MO NA NA NA NA NA NA
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
GSBC Great Southern Bancorp of MO 0.39 45.32 10.97 40.90 2.29 4.49
GFED Guaranty FS&LA,MHC of MO(31.1) 13.25 64.42 14.46 11.61 0.20 1.39
HFSA Hardin Bancorp of Hardin MO 37.34 54.18 2.44 0.32 0.40 6.65
JSBA Jefferson Svgs Bancorp of MO(1) 14.93 70.58 11.56 6.24 0.22 0.51
JOAC Joachim Bancorp of MO 0.59 89.41 1.55 6.08 0.00 2.37
LXMO Lexington B&L Fin. Corp. of MO NA NA NA NA NA NA
MBLF MBLA Financial Corp. of MO(2) 19.25 73.80 0.00 6.47 0.35 0.25
MFSB Mutual Bancompany of MO(2) 11.32 81.04 0.74 6.06 0.00 0.95
NSLB NS&L Bancorp of Neosho MO 17.17 76.36 3.48 0.52 0.00 5.67
NASB North American SB of MO 11.17 54.63 7.04 25.11 3.02 1.53
PCBC Perry Co. Fin. Corp. of MO(1) 77.79 19.33 1.77 0.38 0.01 1.11
PULB Pulaski SB, MHC of MO (29.0) 4.25 90.84 0.01 3.93 0.01 1.00
RFED Roosevelt Fin. Grp. Inc. of MO 53.08 44.04 0.18 1.77 0.30 0.68
SMFC Sho-Me Fin. Corp. of MO 3.19 73.09 10.49 11.87 0.84 3.52
SMBC Southern Missouri Bncrp of MO 25.48 52.56 4.74 10.09 2.69 4.44
</TABLE>
<TABLE>
<CAPTION>
RWA/ Serviced Servicing
Institution Assets For Others Assets
----------- ------ ---------- ------
(%) ($000) ($000)
<S> <C> <C> <C>
Fulton SB, FSB of Fulton, MO 60.11 84,364 0
SAIF-Insured Thrifts 50.38 409,537 2,432
State of MO 48.87 158,634 1,145
Comparable Group Average 47.29 6,484 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
HFSA Hardin Bancorp of Hardin MO 40.43 3,841 0
KYF Kentucky First Bancorp of KY 48.84 0 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
State of MO
-----------
CNSB CNS Bancorp of MO 42.58 21,710 0
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
GSBC Great Southern Bancorp of MO 71.07 82,417 0
GFED Guaranty FS&LA,MHC of MO(31.1) 54.49 10,292 0
HFSA Hardin Bancorp of Hardin MO 40.43 3,841 0
JSBA Jefferson Svgs Bancorp of MO(1) 51.94 54,600 0
JOAC Joachim Bancorp of MO 45.32 0 0
LXMO Lexington B&L Fin. Corp. of MO 49.36 40,462 0
MBLF MBLA Financial Corp. of MO(2) 35.11 0 0
MFSB Mutual Bancompany of MO(2) 46.89 11,179 0
NSLB NS&L Bancorp of Neosho MO 34.33 0 0
NASB North American SB of MO 64.98 406,516 2,887
PCBC Perry Co. Fin. Corp. of MO(1) 17.98 0 0
PULB Pulaski SB, MHC of MO (29.0) 44.54 15,947 0
RFED Roosevelt Fin. Grp. Inc. of MO 38.02 2,000,000 16,576
SMFC Sho-Me Fin. Corp. of MO 54.35 12,336 0
SMBC Southern Missouri Bncrp of MO 46.91 0 0
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
(2) Excluded from averages due to announced or pending acquisition.
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
substantially above that of the Peer Group, as the Bank's commercial real
estate, construction, consumer and commercial business loans totaled 40.4
percent of total loans and MBS, while the Peer Group's combined level of these
loan categories totaled only 21.2 percent. The Bank's greater diversification
into higher risk-weight loans was reflected in the higher risk-weighted asset
base than was recorded by the Peer Group (60.11 percent risk-weighted assets for
Fulton Savings versus 47.29 percent for the Peer Group).
Credit Risk
- -----------
Fulton Savings' credit risk exposure appears to be higher than the Peer
Group's exposure based on the Bank's higher level of risk weight assets, and
Fulton Savings' current asset quality ratios are also less favorable to the Peer
Group. As shown in Table 3.5, as of April 30, 1996, the Bank recorded NPAs of
0.92 percent of assets, higher than the Peer Group average of 0.36 percent, and
maintained a higher ratio of non-performing loans ("NPLs") to loans of 0.80
percent versus 0.36 percent for the Peer Group. Most of the Peer Group's NPAs
consist of non-accruing loans, while Fulton Savings' NPAs consist of non-accrual
loans, REO and restructured loans. Offsetting these disadvantages, the Bank
recorded a higher ratio of reserves to loans. The Bank maintained a lower level
of loss reserves as a percent of NPAs (99.36 percent versus 109.25 percent for
the Peer Group).
Interest Rate Risk
- ------------------
Table 3.6 reflects the relative interest rate risk exposure of Fulton
Savings 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 (110.1
percent versus 122.0 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 recently shown 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 lower exposure to changes in
interest rates.
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 3.5
Credit Risk Measures and Related Information
Comparable Institution Analysis
As of March 31, 1996 or Most Recent Date Available
<TABLE>
<CAPTION>
NPAs & Rsrves/
REO/ 90+Del/ NPLs/ Rsrves/ Rsrves/ NPAs & Net Loan NLCs/
Institution Assets Assets Loans Loans NPLs 90+Del Chargoffs Loans
- ----------- ------ ------ ------ ------ ------ -------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(%) (%) (%) (%) (%) (%) ($000) (%)
Fulton SB, FSB of Fulton, MO 0.23 0.92 0.80 1.06 132.54 99.36 27 0.04
SAIF-Insured Thrifts 0.21 0.96 1.06 0.87 162.95 121.19 240 0.12
State of MO 0.16 0.75 0.69 0.69 124.95 67.23 48 0.01
Comparable Group Average 0.05 0.36 0.36 0.48 153.09 109.25 5 0.02
Comparable Group
- ----------------
CMRN Cameron Fin. Corp. of MO 0.00 0.79 0.47 0.81 172.10 86.49 1 0.00
CAPS Capital Savings Bancorp of MO 0.04 0.20 0.19 0.38 206.14 152.91 0 0.00
FBSI First Bancshares of MO 0.00 0.43 0.11 0.44 392.31 83.74 46 0.16
HFSA Hardin Bancorp of Hardin MO 0.00 0.11 0.21 0.29 140.43 140.43 0 0.00
KYF Kentucky First Bancorp of KY 0.00 0.15 NA 0.87 NA 299.19 0 0.00
NSLB NS&L Bancorp of Neosho MO 0.00 0.18 0.25 0.15 60.56 40.95 0 0.00
PCBC Perry Co. Fin. Corp. of MO(1) 0.00 0.04 0.33 0.10 31.25 31.25 0 0.00
SMFC Sho-Me Fin. Corp. of MO 0.00 NA NA 0.75 NA NA 2 0.00
SMBC Southern Missouri Bncrp of MO 0.42 0.97 0.97 0.66 68.84 39.01 3 0.01
SFFC StateFed Financial Corp. of IA 0.00 NA NA 0.38 NA NA 0 0.00
State of MO
- -----------
CNSB CNS Bancorp of MO 0.19 0.70 0.81 0.60 73.84 53.70 0 0.00
CMRN Cameron Fin. Corp. of MO 0.00 0.79 0.47 0.81 172.10 86.49 1 0.00
CAPS Capital Savings Bancorp of MO 0.04 0.20 0.19 0.38 206.14 152.91 0 0.00
FBSI First Bancshares of MO 0.00 0.43 0.11 0.44 392.31 83.74 46 0.16
GSBC Great Southern Bancorp of MO 0.73 2.03 1.53 2.54 166.26 106.34 35 0.03
GFED Guaranty FS&LA,MHC of MO(31.1) 0.00 0.07 0.10 1.59 NA NA 0 0.00
HFSA Hardin Bancorp of Hardin MO 0.00 0.11 0.21 0.29 140.43 140.43 0 0.00
JSBA Jefferson Svgs Bancorp of MO(1) 0.38 0.97 0.83 0.66 79.52 48.62 10 0.01
JOAC Joachim Bancorp of MO 0.00 0.01 0.02 0.31 NA NA 0 0.00
LXMO Lexington B&L Fin. Corp. of MO 0.06 1.15 1.32 0.49 36.81 35.02 10 0.00
MBLF MBLA Financial Corp. of MO(2) 0.03 0.33 0.57 0.51 90.22 83.20 0 0.00
MFSB Mutual Bancompany of MO(2) 0.00 NA NA NA NA NA 3 0.00
NSLB NS&L Bancorp of Neosho MO 0.00 0.18 0.25 0.15 60.56 40.95 0 0.00
NASB North American SB of MO 0.64 3.36 3.22 1.05 32.56 26.33 263 -0.15
PCBC Perry Co. Fin. Corp. of MO(1) 0.00 0.04 0.33 0.10 31.25 31.25 0 0.00
PULB Pulaski SB, MHC of MO (29.0) 0.14 0.67 0.39 0.31 79.26 37.37 5 0.01
RFED Roosevelt Fin. Grp. Inc. of MO 0.17 0.40 0.27 0.57 209.46 59.09 444 0.05
SMFC Sho-Me Fin. Corp. of MO 0.00 NA NA 0.75 NA NA 2 0.00
SMBC Southern Missouri Bncrp of MO 0.42 0.97 0.97 0.66 68.84 39.01 3 0.01
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
(2) Excluded from averages due to announced or pending acquisition.
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.[CAPTION]
<PAGE>
RP FINANCIAL, LC.
__________________________________________
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
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
<TABLE>
<CAPTION>
Balance Sheet Measures
__________________________
Non-Earn.
Equity/ IEA/ Assets/
Institution Assets IBL Assets
___________ ______ ______ ______
<S> <C> <C> <C>
(%) (%) (%)
Fulton SB, FSB of Fulton, MO 10.7 110.1 3.0
SAIF-Insured Thrifts 12.6 113.8 3.3
State of MO 15.0 117.0 2.7
Comparable Group Average 19.0 122.0 2.6
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
HFSA Hardin Bancorp of Hardin MO 19.2 122.0 2.5
KYF Kentucky First Bancorp of KY 23.6 128.7 2.6
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
State of MO
CNSB CNS Bancorp of MO 10.7 108.4 4.1
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
GSBC Great Southern Bancorp of MO 10.0 108.2 3.6
GFED Guaranty FS&LA,MHC of MO(31.1) 14.6 113.1 4.4
HFSA Hardin Bancorp of Hardin MO 19.2 122.0 2.5
JSBA Jefferson Svgs Bancorp of MO(1) 5.8 105.9 3.2
JOAC Joachim Bancorp of MO 29.2 140.7 1.9
LXMO Lexington B&L Fin. Corp. of MO 14.7 116.9 1.6
MBLF MBLA Financial Corp. of MO(2) 14.5 116.9 0.8
MFSB Mutual Bancompany of MO(2) 11.7 110.9 2.8
NSLB NS&L Bancorp of Neosho MO 23.5 130.0 2.4
NASB North American SB of MO 7.1 106.6 3.1
PCBC Perry Co. Fin. Corp. of MO(1) 20.9 125.9 1.4
PULB Pulaski SB, MHC of MO (29.0) 12.6 113.8 2.0
RFED Roosevelt Fin. Grp. Inc. of MO 5.3 104.3 3.0
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
<CAPTION>
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
___________ ________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
(change in net interest income is annualized in basis points)
Fulton SB, FSB of Fulton, MO 21 8 -30 35 0 0
SAIF-Insured Thrifts 3 4 -1 -10 -6 1
State of MO 9 7 2 -4 -6 2
Comparable Group Average 5 13 5 -2 -12 -1
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
HFSA Hardin Bancorp of Hardin MO 19 68 10 -51 14 5
KYF Kentucky First Bancorp of KY 2 50 13 2 -45 -13
NSLB NS&L Bancorp of Neosho MO -29 22 13 -18 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
State of MO
CNSB CNS Bancorp of MO 16 15 8 NA NA NA
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
GSBC Great Southern Bancorp of MO -6 -6 -8 16 -14 -1
GFED Guaranty FS&LA,MHC of MO(31.1) -6 -15 13 2 -8 -16
HFSA Hardin Bancorp of Hardin MO 19 68 10 -51 14 5
JSBA Jefferson Svgs Bancorp of MO(1) NA 16 29 -6 -23 3
JOAC Joachim Bancorp of MO 60 -12 -12 -22 -5 NA
LXMO Lexington B&L Fin. Corp. of MO -6 NA NA NA NA NA
MBLF MBLA Financial Corp. of MO(2) 14 1 -20 -14 -32 -34
MFSB Mutual Bancompany of MO(2) -2 22 7 -8 -0 -23
NSLB NS&L Bancorp of Neosho MO -29 22 13 -18 9 4
NASB North American SB of MO 21 -2 -21 -31 6 15
PCBC Perry Co. Fin. Corp. of MO(1) NA -3 2 -1 13 -18
PULB Pulaski SB, MHC of MO (29.0) 2 19 3 -3 7 30
RFED Roosevelt Fin. Grp. Inc. of MO 11 5 -15 -18 -3 0
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
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
(2) Excluded from averages due to announced or pending acquisition.
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
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, LC.
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, LC.
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 Fulton Savings 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. Traditional 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 greater loan
portfolio diversification into higher risk-weight loans. The Peer
Group currently maintains a higher IEA/IBL ratio due to a higher
average capital ratio, although the Bank's ratio is expected to exceed
the Peer Group's average ratio on a pro forma basis. Both the Bank
and the Peer Group utilized borrowings to supplement deposit funding.
On balance, the Bank's asset composition seemingly represents the
potential for higher earnings given the greater proportion of loans
receivable and more diversification into higher yielding commercial
real estate, construction and consumer loans. However, this advantage
is offset in part by the higher credit risk associated with these
types of loans.
<PAGE>
RP Financial, LC.
Page 4.3
o Asset Quality. The Bank exhibited lower asset quality than the Peer
-------------
Group in terms of total NPAs as a percent of assets and net loans
receivable, and the Bank maintains a higher credit risk profile with
its higher risk-weighted assets ratio. The Bank's reserve coverage
ratio as a percent of loans receivable is more favorable than the Peer
Group's ratio, although the higher NPAs maintained by Fulton Savings'
results in lower reserve coverage ratios as a percent of non-
performing loans and total NPAs.
o Balance Sheet Liquidity. The Bank operates with lower balance sheet
-----------------------
liquidity than the Peer Group based on the lower ratio of cash and
investment securities and MBS than the Peer Group. 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
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 is expected to exceed the Peer Group's equity-to-assets ratio,
providing the Bank with comparable leverage potential and cushion
against loss but a lower pro forma ROE.
On balance, RP Financial applied a slight 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, with Fulton Savings recording lower core income in comparison
to the Peer Group. 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 emphasis on selling loans with servicing retained. Non-
operating income and loan loss provisions had similar and overall
minor impacts on the Bank's and Peer Group's earnings. 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. On a
pro forma basis, Fulton Savings' profitability are expected to
approximate that of the Peer Group.
<PAGE>
RP Financial, LC.
Page 4.4
o Interest Rate Risk. Fulton Savings maintains an earning asset
------------------
portfolio with a high proportion of interest sensitive assets. The
pro forma increase in the IEA/IBL ratio can be expected to further
reduce the Bank's interest rate risk exposure.
o Credit Risk. Loss provisions had a similar impact on the earnings of
-----------
the Bank and the Peer Group. In terms of exposure to credit quality
related losses, the Bank maintained higher NPAs and a higher reserve
coverage ratio as a percent of loans receivable than the Peer Group.
However, the Bank's higher risk loan portfolio exposes it to greater
credit risk than the Peer Group.
o Earnings Growth Potential. Several factors were considered in assessing
-------------------------
earnings growth potential. While opportunities for lending growth in
the Bank's market area appear favorable, Fulton Savings' current loan
demand is in excess of available funds and the ability to increase the
loan portfolio is limited given the already high concentration of
loans receivable. Recent history reveals that obtaining additional
retail deposit funds is possible, however at elevated costs which
increase funding costs and narrow the net interest margin. On
balance, we concluded that the Bank's earnings growth potential was
not in excess of the Peer Group average.
o Return on Equity. Immediately following the conversion, the Bank's pro
----------------
forma return on equity will be below the Peer Group average owing to
the Bank's lower higher equity position. 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 made a moderate downward adjustment for profitability,
growth and viability of earnings relative to the Peer Group.
3. Asset Growth
------------
The Bank's ability to grow on a pro forma basis 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 Callaway County, Missouri is a rural market that
has been experiencing moderate demographic growth over the past decade. In terms
of credit risk exposure, the economy in Callaway
<PAGE>
Table 4.1
Peer Group Primary Market Area Demographic/Competition Trends
<TABLE>
<CAPTION>
Proj.
Population Pop. 1990-95 1995-2000
-------------------
Institution County 1990 1995 2000 % Change % Change Median Age Amount
- ----------- ------ ---- ---- ---- -------- -------- ---------- ------
(000) (000)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cameron Fin. Corp. of MO Clinton 17 18 19 6.1% 5.4% 36.2 12,510
Capital Savings Bancorp of MO Cole 64 68 72 6.7% 6.0% 34.1 15,908
First Bancshares of MO Wright 17 18 20 8.7% 7.6% 35.8 8,517
Hardin Bancorp of Hardin, MO Ray 22 22 22 0.2% 0.2% 35.7 12,663
Kentucky First Bancorp of KY Harrison 16 17 18 4.3% 3.9% 36.1 11,804
NS&L Bancorp of MO Newton 44 47 50 6.8% 6.0% 35.9 12,291
Perry Co. Fin. Corp. of MO Perry 17 17 18 4.7% 4.2% 35.2 12,781
Sho-Me Fin. Corp. of MO Lawrence 30 32 33 4.6% 4.2% 36.3 11,250
Southern Missouri Bncrp. of MO Butler 39 40 42 4.5% 4.1% 36.9 10,436
StateFed Financial Corp. of IA Polk 327 350 372 7.0% 6.2% 33.3 16,864
--- --- --- ---- ---- ---- ------
Averages: 59 63 67 5.3% 4.8% 35.6 12,502
Medians: 26 27 27 5.4% 4.8% 35.9 12,401
Fulton SB of Fulton, MO Callaway 33 35 37 6.5% 5.8% 33.2 $11,723
<CAPTION>
Per Capital Income Deposit
------------------
%State Market
Institution Average Share(1)
- ----------- ------- -------
<S> <C> <C>
Cameron Fin. Corp. of MO 86.9% 41.6%
Capital Savings Bancorp of MO 110.6% 6.6%
First Bancshares of MO 59.2% 29.1%
Hardin Bancorp of Hardin, MO 88.0% 23.2%
Kentucky First Bancorp of KY 97.0% 27.8%
NS&L Bancorp of MO 85.4% 18.3%
Perry Co. Fin. Corp. of MO 88.8% 22.5%
Sho-Me Fin. Corp. of MO 78.2% 22.1%
Southern Missouri Bncrp. of MO 72.5% 16.6%
StateFed Financial Corp. of IA 128.1% 1.0%
------ -----
89.5% 20.9%
87.5% 22.3%
Fulton SB of Fulton, MO 81.5% 24.2%
</TABLE>
(1) Total institution deposits in headquarters county as percent of total
county deposits.
Source: CACI, Inc; FDIC; OTS.
<PAGE>
RP Financial, LC.
Page 4.6
County has been generally stable, with economic trends tied to the trends in the
nearby Jefferson City and Columbia, Missouri markets. The per capita income in
the Bank's market was below the average of the primary markets of the Peer Group
members. The Bank faces a high degree of competition for deposits from the 5
commercial banks and 2 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 no adjustment is warranted for this factor.
5. Dividends
---------
The Holding Company presently has not established a dividend policy, but
intends to adopt a policy of paying regular cash dividends beginning in the
first full quarter following consummation of the conversion. The actual dividend
level will be 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 of the ten
institutions in the Peer Group presently pay regular cash dividends, with
implied dividend yields ranging from 1.28 percent to 3.98 percent. The average
dividend yield on the stocks of the Peer Group institutions was 2.40 percent as
of July 12, 1996, representing an average earnings payout ratio of 30.21
percent. As of July 12, 1996, approximately 76 percent of all publicly-traded
SAIF-insured thrifts had adopted cash dividend policies (see
<PAGE>
RP Financial, LC.
Page 4.7
Exhibit IV-1), exhibiting an average yield of 2.54
percent and an average payout ratio of 35.28 percent. The dividend paying
thrifts generally maintain higher than average profitability ratios,
facilitating their ability to pay cash dividends, which supports a market
pricing premium on average relative to non-dividend paying thrifts.
The Holding Company would appear to have the capacity to pay dividends
based on pro forma capital and earnings, although increases in future dividends
may be restricted by limited earnings growth. The Holding Company's stated
intention to implement a dividend shortly after completion of the conversion is
a favorable comparison to the Peer Group companies and thus no adjustment is
warranted for this valuation factor.
6. Liquidity of the Shares
-----------------------
The Peer Group is by definition composed of companies that are traded in
the public markets, nine of which trade on the NASDAQ system and one that trades
on the Amex. 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 $11.8 million to $38.5 million as of July 12, 1996, with an average market
value of $20.2 million. The shares outstanding of the Peer Group members ranged
from 0.8 million to 2.8 million, with average shares outstanding of
approximately 1.4 million. The Bank's pro forma market value range and shares
outstanding will fall in the Peer Group range. Accordingly, we anticipate that
the liquidity of the Bank's stock will be comparable to the Peer Group's and
thus no adjustment for this factor is warranted.
<PAGE>
RP Financial, LC.
Page 4.8
7. Marketing of the Issue
----------------------
We believe that three separate markets exist 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.
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.
<PAGE>
RP Financial, LC.
Page 4.9
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 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
<PAGE>
RP Financial, LC.
Page 4.10
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 first 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-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 throughout the first half of June.
Following a period of stock price volatility, as investors continued to react to
signs of higher economic growth and uncertain second quarter earnings reports, a
stronger than expected jobs creation growth report for June, a corresponding
drop of the unemployment rate from 5.6 to 5.3 percent and expectations of very
strong economic expansion for the second quarter resulted in a sharp drop in the
stock market in the first ten days of July. On July 12, 1996, the DJIA closed
at 5510.6, translating into a 7.7 percent increase from year end 1995, but down
3.3 percent from its June 5, 1996 peak.
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
<PAGE>
RP Financial, LC.
Page 4.11
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 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
<PAGE>
RP Financial, LC.
Page 4.12
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 throughout June, uncertainty over future interest rate trends provided
for a flat thrift stock market. The overall decline in the stock market, and an
increase in interest rates to above 7.00 percent in early July again caused a
pullback in the overall thrift market. The SNL Index for all publicly-traded
thrifts closed at 375.6 on July 12, 1996, an increase of 15.2 percent from one
year ago, but a decrease of 4.1 percent from its peak of 391.7 on July 2, 1996.
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 6.2
percent.
<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 Information
- ------------------------------------------------------------------------------------------------------------------------------------
Conversion Equity/ NPAs/ 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>
Ocean Financial Corp. NJ * 07/03/96 OCFC $1,130 8.15% 1.01% 52% $167.8 132% 2.6%
Home Financial Bancorp(1) IN 07/02/96 HWEN 34 9.85% 0.24% 148% 5.1 89% 6.1%
First Lancaster Bancshares KY * 07/01/96 FLKY 35 13.95% 1.57% 22% 9.6 132% 4.6%
Heartland Bancshares IL 07/01/96 P. Sheet 61 7.75% 0.93% 53% 8.8 125% 5.8%
Kenwood Bancorp(7) OH * 07/01/96 P. Sheet 48 6.88% 0.00% NM 1.6 102% 22.2%
Eagle BancGroup IL * 07/01/96 EGLB 152 7.40% 0.93% 64% 13.0 90% 5.3%
Provident Financial Holdings CA * 06/28/96 PROV 558 7.10% 1.80% 50% 51.3 101% 2.2%
Prestige Bancorp PA 06/27/96 PRBC 94 7.56% 0.33% 95% 9.6 96% 5.0%
Wayne Bancorp NJ 06/27/96 WYNE 196 8.91% 1.79% 46% 22.3 89% 4.4%
Mechanics SB(1) CT 06/26/96 MECH 670 3.68% 2.75% 56% 52.9 132% 3.6%
Dime Community Bancorp NY * 06/26/96 DIME 1,094 7.46% 0.75% 77% 145.5 132% 2.5%
Commonwealth Bancorp(7) PA * 06/17/96 CMSB 2,054 6.71% 0.51% 109% 98.7 110% 1.9%
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 P. Sheet 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(1) 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%
Averages: $346 9.47% 0.80% 119% $37.4 115% 5.1%
Medians: 123 7.73% 0.61% 64% 18.5 119% 3.9%
Averages, Excluding 2nd Steps $286 9.88% 0.90% 120% $37.8 117% 4.1%
Medians, Excluding 2nd Steps 152 7.77% 0.75% 60% 20.5 125% 3.6%
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Insider Purchases Pro Forma Data
---------------------------------------------------------------------------
Pricing Ratios(4) Fin. Characteristics
---------------------------------------------------------------------------
Benefit Plans
-------------
Recog. Mgmt.
Institution ESOP Plans & Dirs. P/TB P/E P/A ROA TE/A ROE
- ----------- ---- ----- ------- ---- --- --- --- ---- ---
(%) (%) (%)(3) (%) (x) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ocean Financial Corp. 8.0% 4.0% 1.2% 75.9% 15.4 14.2% 0.9% 18.8% 4.9%
Home Financial Bancorp(1) 8.0% 4.0% 7.1% 67.5% 13.4 13.3% 1.0% 19.6% 5.0%
First Lancaster Banshares 8.0% 4.0% 9.4% 74.2% 18.5 22.2% 1.2% 29.8% 4.0%
Heartland Bancshares 8.0% 4.0% 14.8% 73.3% NM 12.8% NM 17.5% NM
Kenwood Bancorp(7) 8.0% 4.0% 6.4% 67.6% NM 6.0% 0.1% 8.8% 1.7%
Eagle BancGroup 8.0% 4.0% 6.3% 59.2% NM 8.0% 0.1% 13.5% 0.6%
Provident Financial Holdings 8.0% 4.0% 2.9% 61.4% NM 8.5% 0.2% 13.9% 1.1%
Prestige Bancorp 8.0% 4.0% 6.9% 63.9% 24.7 9.4% 0.4% 14.7% 2.6%
Wayne Bancorp 8.0% 4.0% 4.4% 61.8% 18.6 10.4% 0.6% 16.8% 3.3%
Mechanics SB(1) 2.3% 0.0% 1.5% 77.3% NM 7.3% NM 9.5% NM
Dime Community Bancorp 8.0% 4.0% 2.7% 80.3% 15.9 11.9% 0.7% 16.9% 4.0%
Commonwealth Bancorp(7) 8.0% 4.0% 0.1% 109.3% 12.1 8.4% 0.7% 6.7% 10.4%
CNS Bancorp 8.0% 4.0% 8.0% 71.1% 22.3 16.4% 0.7% 23.1% 3.2%
Westwood Financial Corp.(7) 0.0% 0.0% 2.5% 80.0% 10.1 7.3% 0.7% 9.2% 7.9%
Lexington B&L Fin. Corp. 8.0% 4.0% 4.3% 70.1% 16.2 20.6% 1.3% 29.4% 4.3%
First Fed. Fin. Bancorp 8.0% 4.0% 13.4% 63.6% 17.4 11.5% 0.7% 18.0% 3.7%
First Fed. Bancshares 8.0% 4.0% 2.6% 65.0% 10.4 10.3% 1.0% 15.9% 6.3%
Citizens First Fin. Corp. 8.0% 4.0% 6.5% 71.7% 17.8 11.2% 0.6% 15.6% 4.0%
North Cincinnati SB(1) 6.0% 0.0% 16.1% 65.0% NM 6.7% NM 10.3% NM
Reliance Bancshares(1) 4.0% 4.0% 9.5% 72.3% 27.3 40.7% 1.5% 56.2% 2.7%
Catskill Financial Corp. 8.0% 4.0% 2.6% 73.2% 21.2 20.4% 1.0% 27.8% 3.5%
Yonkers Financial Corp. 8.0% 4.0% 3.7% 76.5% 16.6 14.8% 0.9% 19.4% 4.6%
7.1% 3.5% 6.0% 71.8% 17.4 13.3% 0.8% 18.7% 4.1%
8.0% 4.0% 5.4% 71.4% 17.0 11.3% 0.7% 16.9% 4.0%
7.4% 3.6% 6.5% 69.6% 18.2 14.2% 0.8% 20.4% 3.6%
8.0% 4.0% 6.3% 71.1% 17.6 11.9% 0.8% 17.5% 3.8%
<CAPTION>
- ----------------------------------------------------------------------------------------------
Post-IPO Pricing Trends
-------------------------------------------------------------
Closing Price:
-------------------------------------------------------------
First After After
IPO Trading % First % First %
Price Day Chg. Week(5) Chg. Month(6) Chg.
----- --- ---- ------- ---- -------- ----
($) ($) (%) ($) (%) ($) (%)
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ocean Financial Corp. $20.00 $21.25 6.3% 20.75 3.8% NA NA
Home Financial Bancorp(1) 10.00 10.25 2.5% 9.88 -1.2% NA NA
First Lancaster Banshares 10.00 13.25 32.5% 13.38 33.8% NA NA
Heartland Bancshares 10.00 NT NA NT NA NT NA
Kenwood Bancorp(7) 10.00 NT NA NT NA NT NA
Eagle BancGroup 10.00 11.25 12.5% 11.25 12.5% NA NA
Provident Financial Holdings 10.00 10.97 9.7% 10.81 8.1% 10.63 6.3%
Prestige Bancorp 10.00 10.38 3.8% 10.25 2.5% 9.75 -2.5%
Wayne Bancorp 10.00 11.13 11.2% 11.38 13.8% 11.25 12.5%
Mechanics SB(1) 10.00 11.50 15.0% 11.50 15.0% 11.19 11.9%
Dime Community Bancorp 10.00 12.00 20.0% 12.00 20.0% 12.00 20.0%
Commonwealth Bancorp(7) 10.00 10.50 5.0% 10.75 7.5% 10.50 5.0%
CNS Bancorp 10.00 11.00 10.0% 12.00 20.0% 11.50 15.0%
Westwood Financial Corp.(7) 10.00 10.75 7.5% 10.38 3.8% 10.62 6.2%
Lexington B&L Fin. Corp. 10.00 9.50 -5.0% 9.75 -2.5% 10.12 1.2%
First Fed. Fin. Bancorp. 10.00 10.75 7.5% 10.62 6.2% 11.00 10.0%
First Fed. Bancshares 10.00 13.00 30.0% 13.38 33.8% 13.63 36.3%
Citizens First Fin. Corp. 10.00 10.50 5.0% 10.00 0.0% 10.13 1.3%
North Cincinnati SB(1) 10.00 NT NA NT NA NT NA
Reliance Bancshares(1) 8.00 8.38 4.7% 8.25 3.1% 7.94 -0.7%
Catskill Financial Corp. 10.00 10.38 3.8% 10.50 5.0% 10.38 3.8%
Yonkers Financial Corp. 10.00 9.75 -2.5% 10.00 0.0% 9.94 -0.6%
$10.36 $11.39 9.4% $11.41 9.7% $10.70 8.4%
10.00 10.75 7.5% 10.75 6.2% 10.62 6.2%
$10.42 $11.48 9.8% $11.51 10.2% $10.73 8.8%
10.00 10.97 7.5% 10.81 6.2% 10.63 6.3%
</TABLE>
Note: * - Appraisal performed by RP Financial;
"NT" - Not Traded; "NA" - Not Applicable, Not Available.
(1) Non-OTS regulated thrifts. July 9, 1996
(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.
Page 4.14
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
78.47 percent reflects a discount of 25.7 percent from the average P/B ratio of
all publicly-traded SAIF-insured thrifts (equal to 105.61 percent), and the
average core P/E ratio of 16.43 times reflects a premium of 9.5 percent from the
all SAIF-insured public average core P/E ratio of 15.01 times. The pricing
ratios of the better capitalized recently converted thrifts suggest that the
investment community has determined to discount their stocks on a book basis
until leveraging of the proceeds is completed over the longer term. Excluding
two of the recent conversions which were actually second-step conversions of
mutual holding companies (which already have a lengthy trading history), the
average P/TB ratio of recent conversions equalled 76.07 percent.
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 stable, 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 mixed, with some offerings oversubscribed in
the Subscription Offerings while other offerings have sold only within the range
of value. 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, however certain offerings have been
affected by specific regional market factors such as acquisition speculation.
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. Table 4.4 shows the closing prices after the first
day of trading and current pricing ratios for the most recent conversions in the
Midwest. While pricing for one of the recent conversions, CNS Bancorp, Inc.,
appears to have been affected by acquisition speculation in the local
marketplace, overall 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.
<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 July 12, 1996
<TABLE>
<CAPTION>
Market Per Share Data
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 16.80 115.39 1.23 16.52 14.10 102.41 12.87 105.61 15.01
Special Selection Grouping(8) 11.23 52.75 0.45 14.96 16.64 75.54 15.33 78.47 16.43
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
CNSB CNS Bancorp of MO 11.50 19.01 0.45 14.07 NM 81.73 18.86 81.73 NM
CATB Catskill Fin. Corp. of NY 10.00 56.87 0.47 13.65 21.28 73.26 20.36 73.26 18.52
CBK Citizens First Fin.Corp. of IL 9.94 28.01 0.56 13.95 17.75 71.25 11.09 71.25 16.30
CMSB Cmnwealth Bancorp of PA 10.19 183.25 0.83 12.41 12.28 82.11 8.55 111.37 12.74
DIME Dime Community Bancorp of NY 11.75 170.94 0.63 14.17 18.65 82.92 14.03 94.38 20.26
EGLB Eagle BancGroup of IL 11.00 14.33 0.10 16.89 NM 65.13 8.81 65.13 NM
FFBH First Fed. Bancshares of AR 13.12 67.62 0.96 15.38 13.67 85.31 13.57 85.31 13.67
FLKY First Lancaster Bncshrs of KY 13.62 13.06 0.54 13.47 NM 101.11 30.17 101.11 NM
HWEN Home Financial Bancorp of IN 10.12 5.12 0.75 14.81 13.49 68.33 13.42 68.33 13.49
LXMO Lexington B&L Fin. Corp. of MO 9.87 12.49 0.62 14.27 15.92 69.17 20.35 69.17 16.18
MECH Mechanics SB of Hartford CT 11.25 59.51 -2.10 12.94 NM 86.94 8.25 86.94 NM
OCFC Ocean Fin. Corp. of NJ 20.12 168.77 1.27 26.36 15.84 76.33 14.32 76.33 15.48
PRBC Prestige Bancorp of PA 9.87 9.50 0.41 15.66 24.07 63.03 9.28 63.03 24.07
PROV Provident Fin. Holdings of CA 10.50 53.91 0.18 16.29 NM 64.46 8.96 64.46 21.00
RELI Reliance Bancshares Inc of WI 8.37 21.44 0.29 11.06 NM 75.68 42.55 75.68 NM
WYNE Wayne Bancorp of NJ 10.75 23.98 0.54 16.17 19.91 66.48 11.19 66.48 16.54
WWFC Westwood Fin. Corp. of NJ 10.50 6.79 0.99 14.61 10.61 71.87 7.69 83.93 10.61
YFCB Yonkers Fin. Corp. of NY 9.75 34.82 0.60 13.07 16.25 74.60 14.47 74.60 14.77
<CAPTION>
Dividends(4) Financial Characteristics(6)
---------------------------- --------------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ ----------------- ------------
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 2.04 26.13 1,293 13.30 0.96 0.86 7.97 0.80 7.21
Special Selection Grouping(8) 0.01 0.14 1.77 444 20.12 1.30 0.66 2.87 0.77 3.94
Comparable Group
- ----------------
Special Comparative Group(8)
- ----------------------------
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
CMSB Cmnwealth Bancorp of PA 0.25 2.45 30.17 2,140 10.41 0.44 0.70 6.69 0.67 6.45
DIME Dime Community Bancorp of NY 0.00 0.00 0.00 1,218 16.92 2.59 0.75 4.45 0.69 4.09
EGLB Eagle BancGroup of IL 0.00 0.00 0.00 163 13.53 0.80 0.08 0.59 0.08 0.59
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
FLKY First Lancaster Bncshrs of KY 0.00 0.00 0.00 43 29.83 1.23 1.20 4.01 1.20 4.01
HWEN Home Financial Bancorp of IN 0.00 0.00 0.00 38 19.64 0.39 0.99 5.06 0.99 5.06
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
MECH Mechanics SB of Hartford CT 0.00 0.00 NM 721 9.49 5.43 -1.54 -16.23 0.00 0.00
OCFC Ocean Fin. Corp. of NJ 0.00 0.00 0.00 1,179 18.75 0.97 0.90 4.82 0.92 4.93
PRBC Prestige Bancorp of PA 0.00 0.00 0.00 102 14.72 0.38 0.39 2.62 0.39 2.62
PROV Provident Fin. Holdings of CA 0.00 0.00 0.00 602 13.90 2.22 0.15 1.10 0.43 3.07
RELI Reliance Bancshares Inc of WI 0.00 0.00 0.00 50 56.23 NA 1.47 2.62 1.47 2.62
WYNE Wayne Bancorp of NJ 0.00 0.00 0.00 214 16.83 1.46 0.56 3.34 0.68 4.02
WWFC Westwood Fin. Corp. of NJ 0.00 0.00 0.00 88 10.71 0.02 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 4.16
Table 4.4
Pricing Characteristics of Recent
Midwestern U.S. Conversions
<TABLE>
<CAPTION>
% Change in Price
------------------------
Conversion Pro Forma P/B 1st To Current
Date @ Conversion Week 7/12/96 P/TB
---- ------------- ------------------------
<S> <C> <C> <C> <C> <C>
Home Financial Bancorp of IN 7/96 67.5% (1.2%) 1.3% 68.33%
Eagle Bancgroup of IL 7/96 59.2 12.5 10.0 65.13
CNS Bancorp of MO 6/96 71.1 20.0 15.0 81.73
Lexington B&L Financial Corp of MO 6/96 70.1 (2.5) (1.3) 69.17
</TABLE>
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.
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. A history of
core profitability, a strong capital position and no outstanding regulatory
issues 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.
<PAGE>
RP Financial, LC.
Page 4.17
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.
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 Slight Downward
Profitability, Growth and Viability of Earnings Moderate Downward
Asset Growth No Adjustment
Primary Market Area No Adjustment
Dividends No Adjustment
Liquidity of the Shares No Adjustment
Marketing of the Issue No Adjustment
Management No Adjustment
Effect of Government Regulations and Regulatory Reform No Adjustment
</TABLE>
<PAGE>
RP Financial, LC.
Page 4.18
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 arithmetic average of Fulton Savings' yield
on interest earning assets and cost of deposits as of April 30, 1996, equal to
6.40 percent. In our determination of the appropriate reinvestment rate to use
for valuation purposes, we analyzed the Bank's yield on IEA and cost of deposits
against the U. S. Treasury One Year T-Bill rate average of 5.62 percent at April
30, 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 arithmetic average of Fulton
Savings' yield on interest earning assets and cost of deposits, 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 8.0 percent
of the shares at the initial offering prices (10 year amortization) and the MRP
acquires 4.0 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 MRP
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.
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/TB 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.
<PAGE>
RP Financial, LC.
Page 4.19
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 $13,000,000 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 of the reinvestment of net
conversion proceeds. The Bank's reported earnings were $0.620 million for the
twelve months ended April 30, 1996, and included no non-recurring items. (Note:
see Exhibit IV-9 for 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 $13,000,000 midpoint value was 14.01
times, which was at a discount of 21.0 percent to the Peer Group average of
17.73 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").
<PAGE>
RP Financial, LC.
Page 4.20
2. Price-to-Tangible Book ("P/TB"). The application of the P/TB
--------------------------------
valuation method requires calculating the Bank's pro forma market value by
applying a valuation P/TB ratio to the Bank's pro forma tangible book value.
Based on the $13.0 million midpoint valuation, the Bank's pro forma P/TB ratio
was 64.95 percent. In comparison to the average P/TB ratio for the Peer Group of
approximately 87.88 percent, the Bank's valuation reflected a 26.1 percent
discount relative to the Peer Group. RP Financial considered the discount under
this approach to be warranted by the valuation adjustments addressed earlier and
the Bank's lower pro forma core ROE (4.64 percent versus 5.45 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.
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 13.49 percent of pro forma
assets, which was discounted by 18.8 percent from the Peer Group's average P/A
ratio of 16.62 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.
<PAGE>
RP Financial, LC.
Page 4.21
Valuation Conclusion
- --------------------
Based on the foregoing, it is our opinion that, as of July 12, 1996, the
aggregate pro forma market value of the Bank and the Holding Company, was
$13,000,000 at the midpoint, equal to 1,300,000 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 $11,050,000 and a maximum value of
$14,950,000. Based on the $10.00 per share offering price, this valuation range
equates to an offering of 1,105,000 shares at the minimum to 1,495,000 shares at
the maximum. In the event that the Bank's appraised value is subject to an
increase, up to 1,719,250 shares may be sold at an issue price of $10.00 per
share, for an aggregate market value of $17,192,500, without a resolicitation.
The comparative pro forma valuation ratios relative to the Peer Group are shown
in Table 4.5, and the key valuation assumptions are detailed in Exhibit IV-7.
The pro forma calculations for the range are detailed in Exhibit IV-8.
<PAGE>
RP FINANCIAL, LC.
----------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Table 4.5
Public Market Pricing
Fulton SB, FSB of Fulton, MO and the Comparables
As of July 12, 1996
<TABLE>
<CAPTION>
Market
Capitalization Per Share Data
--------------- -------------- Pricing Ratios(3)
Book ---------------------------------------
Price/ Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
-------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
Fulton SB, FSB of Fulton, MO
----------------------------
Superrange 10.00 17.19 0.60 13.79 16.62 72.53 17.18 72.53 16.62
Range Maximum 10.00 14.95 0.65 14.54 15.30 68.80 15.24 68.80 15.30
Range Midpoint 10.00 13.00 0.71 15.40 14.01 64.95 13.49 64.95 14.01
Range Minimum 10.00 11.05 0.79 16.56 12.58 60.39 11.67 60.39 12.58
SAIF-Insured Thrifts(7)
-----------------------
Averages 16.80 115.39 1.23 16.52 14.10 102.41 12.87 105.61 15.01
Medians --- --- --- --- 13.99 98.05 11.55 100.50 15.28
All Non-MHC State MO(7)
--------------------------
Averages 16.69 82.07 1.18 16.38 15.75 102.42 15.61 105.54 15.87
Medians --- --- --- --- 16.02 87.92 15.03 87.92 16.18
Comparable Group Averages
-------------------------
Averages 14.87 20.24 0.89 16.95 17.36 87.86 16.62 87.88 17.73
Medians --- --- --- --- 18.28 86.23 16.25 86.33 18.90
State of MO
-----------
CNSB CNS Bancorp of MO 11.50 19.01 0.45 14.07 NM 81.73 18.86 81.73 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 18.12 18.83 1.75 20.34 10.35 89.09 9.29 89.09 10.35
FBSI First Bancshares of MO 15.63 20.35 0.80 18.26 19.54 85.60 14.49 85.78 19.78
GSBC Great Southern Bancorp of MO 27.00 119.72 2.48 15.04 10.89 179.52 18.17 182.56 11.59
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 24.50 102.46 1.52 19.19 16.12 127.67 8.96 155.85 16.44
JOAC Joachim Bancorp of MO 12.44 9.45 0.28 14.15 NM 87.92 25.71 87.92 NM
LXMO Lexington B&L Fin. Corp. of MO 9.87 12.49 0.62 14.27 15.92 69.17 20.35 69.17 16.18
MBLF MBLA Financial Corp. of MO(7) 22.50 30.87 1.00 20.67 22.50 108.85 15.83 108.85 22.50
MFSB Mutual Bancompany of MO(7) 21.00 6.99 0.34 18.73 NM 112.12 13.12 112.12 NM
NSLB NS&L Bancorp of Neosho MO 12.56 11.15 0.59 15.62 21.29 80.41 18.89 80.41 22.84
NASB North American SB of MO 29.75 67.71 3.74 21.44 7.95 138.76 10.19 144.56 8.33
PCBC Perry Co. Fin. Corp. of MO 16.25 13.91 0.88 18.84 18.47 86.25 17.99 86.25 18.47
RFED Roosevelt Fin. Grp. Inc. of MO 17.37 731.59 1.35 10.54 12.87 164.80 8.01 174.40 9.49
SMFC Sho-Me Fin. Corp. of MO 16.00 29.14 1.08 17.36 14.81 92.17 11.04 92.17 14.95
SMBC Southern Missouri Bncrp of MO 14.12 24.34 0.78 15.41 18.10 91.63 15.03 91.63 19.34
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 18.12 18.83 1.75 20.34 10.35 89.09 9.29 89.09 10.35
FBSI First Bancshares of MO 15.63 20.35 0.80 18.26 19.54 85.60 14.49 85.78 19.78
</TABLE>
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ --------------- ---------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
Fulton SB, FSB of Fulton, MO
----------------------------
Superrange 0.00 0.00 0.00 100 23.68 0.79 1.03 4.36 1.03 4.36
Range Maximum 0.00 0.00 0.00 98 22.15 0.80 1.00 4.50 1.00 4.50
Range Midpoint 0.00 0.00 0.00 96 20.76 0.82 0.96 4.64 0.96 4.64
Range Minimum 0.00 0.00 0.00 95 19.33 0.83 0.93 4.80 0.93 4.80
SAIF-Insured Thrifts(7)
-----------------------
Averages 0.35 2.04 26.13 1,293 13.30 0.96 0.86 7.97 0.80 7.21
Medians --- --- --- --- --- --- --- --- --- ---
All Non-MHC Sta of MO(7)
-----------------------
Averages 0.35 2.11 23.72 864 17.13 0.81 0.97 7.50 0.95 7.60
Medians --- --- --- --- --- --- --- --- --- ---
Comparable Group Averages
-------------------------
Averages 0.34 2.40 30.21 132 18.96 0.36 0.99 5.53 0.98 5.45
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 1.99 20.57 203 10.43 0.20 0.95 8.92 0.95 8.92
FBSI First Bancshares of MO 0.20 1.28 25.00 140 16.92 0.43 0.78 4.33 0.77 4.27
GSBC Great Southern Bancorp of MO 0.70 2.59 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 1.31 21.05 1,143 7.02 0.97 0.60 8.20 0.59 8.04
JOAC Joachim Bancorp of MO 0.50 4.02 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 1.78 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 3.98 NM 59 23.49 0.18 0.93 4.27 0.87 3.98
NASB North American SB of MO 0.63 2.12 16.84 664 7.35 3.36 1.33 18.45 1.27 17.61
PCBC Perry Co. Fin. Corp. of MO 0.30 1.85 34.09 77 20.86 0.04 1.00 5.36 1.00 5.36
RFED Roosevelt Fin. Grp. Inc. of MO 0.62 3.57 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 3.54 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 1.99 20.57 203 10.43 0.20 0.95 8.92 0.95 8.92
FBSI First Bancshares of MO 0.20 1.28 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 4.5
Public Market Pricing
Fulton SB, FSB of Fulton, MO and the Comparables
As of July 12, 1996
<TABLE>
<CAPTION>
Market
Capitalization Per Share Data Pricing Ratios(3)
--------------- -------------- ---------------------------------------
Book
Price/ Market 12-Mth Value/
Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
-------- ------- ------- ------- -------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) ($Mil) ($) ($) (X) (%) (%) (%) (X)
HFSA Hardin Bancorp of Hardin MO 11.75 12.43 0.48 15.16 24.48 77.51 14.91 77.51 24.48
KYF Kentucky First Bancorp of KY 15.00 20.84 0.57 14.28 NM 105.04 24.81 105.04 NM
NSLB NS&L Bancorp of Neosho MO 12.56 11.15 0.59 15.62 21.29 80.41 18.89 80.41 22.84
PCBC Perry Co. Fin. Corp. of MO 16.25 13.91 0.88 18.84 18.47 86.25 17.99 86.25 18.47
SMFC Sho-Me Fin. Corp. of MO 16.00 29.14 1.08 17.36 14.81 92.17 11.04 92.17 14.95
SMBC Southern Missouri Bncrp of MO 14.12 24.34 0.78 15.41 18.10 91.63 15.03 91.63 19.34
SFFC StateFed Financial Corp. of IA 15.75 12.96 1.03 18.13 15.29 86.87 17.47 86.87 15.29
</TABLE>
<TABLE>
<CAPTION>
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Reported Core
Amount/ Payout Total Equity/ NPAs/ --------------- ---------------
Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
------- ------ ------- ------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
HFSA Hardin Bancorp of Hardin MO 0.40 3.40 NM 83 19.24 0.11 0.64 4.18 0.64 4.18
KYF Kentucky First Bancorp of KY 0.50 3.33 NM 84 23.62 0.15 1.12 5.40 1.12 5.40
NSLB NS&L Bancorp of Neosho MO 0.50 3.98 NM 59 23.49 0.18 0.93 4.27 0.87 3.98
PCBC Perry Co. Fin. Corp. of MO 0.30 1.85 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 3.54 64.10 162 16.40 0.97 0.88 5.01 0.82 4.69
SFFC StateFed Financial Corp. of IA 0.40 2.54 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>
RP Financial, LC.
LIST OF EXHIBITS
Exhibit
Number Description
- ------- -----------
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 Loan Portfolio Composition
I-9 Fixed Rate and Adjustable Rate Loans
I-10 Loan Originations, Purchases, and Sales
I-11 Non-Performing Assets/Classified Assets
I-12 Deposit Composition
I-13 Time Deposit Rate/Maturity
I-14 Borrowings
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
<PAGE>
RP Financial, LC.
LIST OF EXHIBITS(continued)
III-3 Thrifts in Continguous States
IV-1 Stock Prices: July 12, 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
<PAGE>
EXHIBIT I-1
Fulton Savings Bank, FSB
Map of Office Location
<PAGE>
[MAP OF MISSOURI APPEARS HERE]
<PAGE>
EXHIBIT I-2
Audited Financial Statements
[Incorporated by Reference]
<PAGE>
EXHIBIT I-3
Fulton Savings Bank, FSB
Key Operating Ratios
<TABLE>
<CAPTION>
At or For the
Year Ended April 30,
------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
KEY FINANCIAL RATIOS:
<S> <C> <C> <C> <C> <C>
Performance Ratios:
Return on assets(1) ........................... 0.75% 0.72% 1.12% 1.07% 1.03%
Return to equity(2) ........................... 7.00 6.55 11.92 12.13 12.58
Retained earnings to assets(3) ................ 10.70 10.93 10.06 8.82 8.21
Interest rate spread(4) ....................... 2.60 2.96 3.58 3.39 3.18
Net interest margin(5) ........................ 3.02 3.33 3.90 3.75 3.59
Average interest-earning assets
to average interest-bearing liabilities ...... 108.84 109.15 108.64 107.71 106.64
Noninterest expense as a
percent of average total assets .............. 2.23 2.39 2.37 2.21 2.00
Asset Quality Ratios:
Nonaccrual and 90 days or more
past due loans as a percent
of loans receivable, net ..................... 0.43 0.23 1.53 0.44 1.72
Nonperforming assets as a
percent of total assets ...................... 0.60 0.20 1.53 0.72 1.86
Allowance for losses as a
percent of gross loans receivable ............ 1.05 1.11 1.09 1.26 1.17
Allowance for losses as a
percent of nonperforming loans ............... 245.44 498.05 72.18 291.78 68.78
Net charge-offs to average
outstanding loans ............................ 0.03 0.03 0.17 0.14 0.05
- ---------------
</TABLE>
(1) Net earnings divided by average total assets.
(2) Net earnings divided by average equity.
(3) Average retained earnings divided by average total assets.
(4) Difference between weighted average yield on interest-earning assets and
weighted average rate on interest-bearing liabilities.
(5) Net interest income as a percentage of average interest-earning assets.
<PAGE>
EXHIBIT I-4
Fulton Savings Bank, FSB
Investment Portfolio Composition
<TABLE>
<CAPTION>
At April 30,
---------------------------------------------------------------------------------
1996 1995 1994
---------------------- ---------------------------- ----------------------------
Carrying Percent of Carrying Percent of Carrying Percent of
Value Portfolio Value Portfolio Value Portfolio
----- --------- ----- --------- ----- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Available for sale:
Investment securities:
U.S. Government and federal
agency obligations ......... $3,216 100.00% $4,201 99.98% $ -- --%
Mortgage-backed securities... -- -- 1 .02 -- --
----- ------ ----- ------ ----- ----
Total available for sale.. 3,216 100.00 4,202 100.00 -- --
Held to maturity:
Investment securities:
U.S. Government and federal
agency obligations ......... -- -- -- -- 4,260 78.08
Mortgage-backed securities... -- -- -- -- 1,196 21.92
----- ------ ------ ------ ------ ------
Total held to maturity -- -- -- -- 5,456 100.00
----- ------ ------ ------ ------ ------
Total...................... $3,126 100.00% $4,202 100.00% $5,456 100.00%
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
At April 30, 1996
--------------------------------------------------------------------
Amount Due or Repricing within:
Over One to
One Year or Less Five Years Totals
------------------- ------------------- -------------------
Weighted Weighted Weighted
Carrying Average Carrying Average Carrying Average
Value Yield Value Yield Value Yield
-------- ------- -------- -------- -------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Government and
federal agency
obligations ........ $2,511 5.92% $705 6.65% $3,216 6.08%
</TABLE>
<PAGE>
EXHIBIT I-5
Fulton Savings Bank, FSB
Yields and Costs
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------------------------------------------------------------
1996 1995 1994
------------------------- ------------------------- -------------------------
Average Average Average
Average Yield/ Average Yield/ Average Yield/
Balance Interest Cost Balance Interest Cost Balance Interest Cost
------- -------- ------ ------- -------- ------ ------- -------- ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earnings assets:
Loans receivable, net (1) ..................... $71,380 $5,689 7.97% $64,942 $4,913 7.57% $59,206 $4,888 8.26%
Mortgage-backed securities
available for sale ........................... 1 -- 9.18 370 44 11.92 -- -- --
Mortgage-backed securities
held to maturity ............................. -- -- -- -- -- -- 1,530 121 7.87
U.S. Government and federal agency
securities avaiable for sale ................. 3,895 253 6.48 4,335 240 5.54 -- -- --
U.S. Government and federal agency
securities held to maturity .................. -- -- -- -- -- -- 4,503 218 4.85
FHLB stock .................................... 628 45 7.17 616 50 8.07 622 49 7.92
Interest-bearing deposits ..................... 3,133 185 5.90 2,216 108 4.89 4,381 137 3.12
------- ------ ------- ------- ------- ------
Total Interest-earning assets ................ 79,037 6,172 7.81 72,479 5,355 7.39 70,242 5,413 7.71
Noninterest earning assets ..................... 3,695 3,308 3,248
------- ------- -------
Total average assets ......................... $82,732 $75,787 $73,490
======= ======= =======
Interest-bearing liabilities:
NOW, money market and passbook
accounts ..................................... $14,728 387 2.62 $17,090 485 2.84 $17,906 485 2.71
Certificates of deposit ....................... 53,273 3,077 5.78 47,237 2,262 4.79 46,752 2,186 4.68
------- ------ ------- ------ ------- ------
Total average deposits ....................... 68,001 3,464 5.09 64,237 2,747 4.27 64,658 2,671 4.13
FHLB advances ................................. 4,616 317 6.88 2,077 197 9.51 -- -- --
------- ------ ------- ------ ------- ------
Total interest-bearing
liabilities .................................. 72,617 3,781 5.21 66,404 2,944 4.43 64,658 2,671 4.13
------ ------ ------
Noninterest bearing liabilities ................ 1,261 1,097 1,442
------- ------- -------
Total average liabilities .................... 73,878 67,501 66,100
Average retained earnings ...................... 8,854 8,286 7,300
------- ------- -------
Total liabilities and retained
earnings ..................................... $82,732 $75,787 $73,490
======= ======= =======
Net interest income ............................ $2,391 $2,411 $2,742
====== ====== ======
Interest rate spread ........................... 2.60 2.96 3.58
Net interest margin ............................ 3.02% 3.33% 3.90%
Ratio of average interest-earning
assets to average interest bearing
liabilities ................................... 108.84% 109.15% 108.64%
</TABLE>
- ---------------------------------
(1) Average loans receivable includes nonaccruing loans. Interest income
does not include interest on loans 90 days or more past due.
<PAGE>
EXHIBIT I-5(continued)
Fulton Savings Bank, FSB
Yields and Costs
<TABLE>
<CAPTION>
At April 30, Year Ended April 30.
--------------------------------
1996 1996 1995 1994
------------ ---- ---- ----
<S> <C> <C> <C> <C>
Weighted average yield on:
Loans receivable, net.......... 7.76% 7.97% 7.57% 8.26%
Mortgage-backed securities
available for sale........... -- 9.18 11.92 --
Mortgage-backed securities
held to maturity............. -- -- -- 7.87
U.S. Government and federal
agency obligations
available for sale........... 6.08 6.48 5.54 --
U.S. Government and federal
agency obligations held
to maturity.................. -- -- -- 4.85
FHLB stock..................... 6.71 7.17 8.07 7.92
Interest-bearing deposits...... 3.42 5.90 4.89 3.12
All interest-earning assets.... 7.61 7.81 7.39 7.71
Weighted average rate paid on:
NOW, money market and
passbook accounts............ 2.63 2.62 2.84 2.71
Certificate accounts........... 5.80 5.78 4.79 4.68
FHLB advances.................. 6.75 6.88 9.51 --
All interest-bearing
liabilities.................. 5.28 5.21 4.43 4.13
Interest rate spread (spread
between weighted average
rate on all interest-
earning assets and all
interest-bearing
liabilities)................... 2.38 2.60 2.96 3.58
Net interest margin (net
interest income as a
percentage of average
interest-earning assets)....... n/a 3.02 3.33 3.90
</TABLE>
<PAGE>
EXHIBIT I-6
Fulton Savings Bank, FSB
Loan Loss Allowance Activity
<TABLE>
<CAPTION>
Year Ended April 30,
--------------------------------------
1996 1995 1994
---- ---- ----
(Dollars in Thounsands)
<S> <C> <C> <C>
Allowance at beginning of period .................... $762 $665 $719
Provision for loan losses ........................... 44 118 48
Recoveries:
Mortgage loans:
One- to four-family ............................... 1 -- --
Multi-family ...................................... -- -- --
Commercial ........................................ -- -- --
Construction ...................................... -- -- --
Land .............................................. -- 2 4
Consumer and other loans ........................... 2 26 6
---- ---- ----
Total recoveries ................................. 3 28 10
Charge-offs:
One- to four-family ............................... 1 -- --
Multi-family ...................................... -- -- --
Commercial ........................................ -- -- --
Construction ...................................... -- -- --
Land .............................................. 10 22 61
Consumer and other loans ........................... 16 27 51
---- ---- ----
Total charge-offs ................................ 27 49 112
---- ---- ----
Net charge-offs .................................. 24 21 102
---- ---- ----
Balance at end of period ......................... $782 $762 $665
==== ==== ====
Allowance for loan losses as a percentage of
total loans outstanding at the end of the period .. 0.97% 1.07% 1.05%
Net charge-offs as a percentage of average
loans outstanding during the period ............... 0.03 0.03 0.17
Allowance for loan losses as a percentage of
nonperforming loans at end of period .............. 245.44 498.05 72.18
</TABLE>
<PAGE>
EXHIBIT I-7
Fulton Savings Bank, FSB
Net Portfolio Value Analysis
<TABLE>
<CAPTION>
Net Portfolio as % of
Net Portfolio Value Portfolio Value of Assets
------------------------------- -------------------------
Basis Point("bp")
Change in Rates $ Amount $ Change(1) % Change NPV Ratio(2) Change(3)
----------------- -------- ----------- -------- ------------ ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
400 $ 8,925 $ (2,611) (23)% 10.77% (234) bp
300 9,795 (1,742) (15) 11.61 (150) bp
200 10,572 (964) (8) 12.33 (78) bp
100 11,189 (347) (3) 12.86 (25) bp
0 11,537 -- -- 13.11 --
(100) 11,566 30 -- 13.04 (7) bp
(200) 11,385 (152) (1) 12.77 (34) bp
(300) 11,211 (325) (3) 12.50 (61) bp
(400) 11,241 (296) (3) 12.43 (68) bp
</TABLE>
- ----------------
(1) Represents the increase (decrease) of the estimated NPV at the indicated
change in interest rates compared to the NPV assuming no change in
interest rates.
(2) Calculated as the estimated NPV divided by the portfolio value of total
assets ("PV").
(3) Calculated as the increase (decrease) of the NPV ratio assuming the
indicated change in interest rates over the estimated NPV ratio assuming
no change in interest rates.
<PAGE>
EXHIBIT I-8
Fulton Savings Bank, FSB
Loan Portfolio Composition
<TABLE>
<CAPTION>
At April 30,
-------------------------------------------------------------
1996 1995 1994
----------------- ----------------- -----------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
One- to four-familly........ $46,741 59.61% $46,244 65.37% $42,088 66.46%
Multi-family................ 3,845 4.90 3,588 5.07 3,379 5.34
Commercial.................. 8,706 11.10 6,560 9.27 5,877 9.28
Construction................ 7,686 9.80 5,142 7.27 3,938 6.22
Land........................ 1,518 1.94 1,188 1.68 1,129 1.78
------- ------ ------- ------ ------- ------
Total mortgage loans...... 68,496 87.35 62,722 88.66 56,411 89.08
Consumer and other loans...... 9,922 12.65 8,020 11.34 6,917 10.92
------- ------ ------- ------ ------- ------
Total loans................. 78,418 100.00% 70,742 100.00% 63,328 100.00%
====== ====== ======
</TABLE>
<TABLE>
<S> <C> <C> <C>
Less:
Undisbursed loan funds...... 3,743 2,175 2,381
Allowance for loan losses... 782 762 665
------- ------- -------
Loan receivable, net...... $73,893 $67,805 $60,282
======= ======= =======
</TABLE>
<PAGE>
EXHIBIT I-9
Fulton Savings Bank, FSB
Fixed Rate and Adjustable Rate Loans
<TABLE>
<CAPTION>
After After After
One Year 3 Years 5 Years
Within Through Through Through Beyond
One Year 3 Years 5 Years 10 Years 10 Years Total
-------- ------- ------- -------- -------- -----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Mortgage loans:
One- to four-family ..... $ 307 $1,142 $1,194 $4,837 $39,261 $46,741
Multi-family ............ 4 55 49 266 3,471 3,845
Commercial .............. -- 285 444 613 7,364 8,706
Construction ............ 7,686(1) -- -- -- -- 7,686
Land .................... 347 56 27 79 1,009 1,518
Consumer and other loans . 3,556 3,478 1,566 974 348 9,922
------ ------ ------ ------ ------- -------
Total gross loans $11,900 $5,016 $3,280 $6,769 $51,453 $78,418
======= ====== ====== ====== ======= =======
</TABLE>
- ------------
(1) Includes 32 loans totalling $4.5 million that will convert to permanent
loans.
The following table sets forth the dollar amount of all loans due after
April 30, 1997, which have fixed interest rates and have floating or adjustable
interest rates.
<TABLE>
<CAPTION>
Fixed- Floating- or
Rates Adjustable Rates
------ ----------------
(In Thousands)
<S> <C> <C>
Mortgage loans:
One- to four-family ............. $4,677 $41,757
Multi-family .................... -- 3,841
Commercial ...................... 1,301 7,405
Construction .................... -- --
Land ............................ 57 1,114
Consumer and other loans ......... 5,835 531
------- -------
Total gross loans $11,870 $54,648
======= =======
</TABLE>
<PAGE>
EXHIBIT I-10
Fulton Savings Bank, FSB
Loan Originations, Purchases, and Sales
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------
1996 1995 1994
------- ------- -------
(In Thousands)
<S> <C> <C> <C>
Loans originated:
Mortgage loans:
One- to four-family............. $25,263 $19,150 $28,856
Multi-family.................... 4,519 545 308
Commercial...................... 4,415 1,167 2,242
Construction.................... 8,365 7,683 5,355
Land............................ 655 108 110
Consumer and other loans......... 8,079 7,002 6,249
------- ------- -------
Total loans originated......... 51,296 35,655 43,120
Loans purchased:
Mortgage loans:
One- to four-family............. -- 669 --
Construction.................... 484 277 --
------- ------- -------
Total loans purchased......... 484 946 --
Loans sold:
Whole loans..................... 3,812 1,617 13,311
Participations.................. 18,820 10,191 7,032
------- ------- -------
Total loans sold.............. 22,632 11,808 20,343
Less:
Principal repayments.......... 20,463 16,507 18,823
Transfer to real estate
owned........................ 271 93 49
Loans held for sale........... 2,306 573 --
------- ------- -------
23,040 17,173 18,872
------- ------- -------
Net increase in loans
receivable, net................ $6,108 $7,620 $3,905
======= ======= =======
</TABLE>
<PAGE>
EXHIBIT I-11
Fulton Savings Bank, FSB
Non-Performing Assets/Classified Assets
<TABLE>
<CAPTION>
At April 30,
----------------------------------
1996 1995 1994
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Loans accounted for on
a nonaccrual basis:
Mortgage loans:
One- to four-family ................................. $175 $135 $247
Commercial .......................................... 69 -- 642
Consumer and other loans ............................. 75 18 32
--- --- -----
Total ............................................ 319 153 921
Accruing loans which are
contractually past due 90 days or more ............... -- -- --
--- --- -----
Total of nonaccrual and
90 days past due loans ............................... 319 153 921
Real estate owned, net ................................ 197 5 203
--- --- -----
Total nonperforming assets ........................ $516 $158 $1,124
==== ==== ======
Restructured loans .................................... $271 $273 $260
Nonaccrual and 90 days or more past due loans
as a percentage of loans receivable, net ............. 0.43% 0.23% 1.53%
Nonaccrual and 90 days or more past due loans
as a percentage of total assets ...................... 0.37 0.19 1.25
Nonperforming assets as a percentage of
total assets ......................................... 0.60 0.20 1.53
</TABLE>
<TABLE>
<CAPTION>
At April 30,
----------------------
1996 1995
---- ----
(In Thousands)
<S> <C> <C>
Loss ..................................... $ -- $ --
Doubtful ................................. -- --
Substandard .............................. 798 1,135
Special mention .......................... 708 201
------ -----
Total classified assets ................. $1,506 $1,336
====== ======
</TABLE>
<PAGE>
EXHIBIT I-12
Fulton Savings Bank, FSB
Deposit Composition
<TABLE>
<CAPTION>
Weighted Percentage
Average Minimum of Total
Interest Rate Term Checking and Savings Deposits Amount Balance Deposits
- ------------- ----- ------------------------------ ------ ------- ---------
(In Thousands)
<S> <C> <C> <C> <C> <C>
--% None Non-interest bearing $200 $1,710 2.443%
2.62 None NOW 400 4,259 6.06
3.43 None Money Market Deposit 1,500 3,040 4.32
3.03 None Passbook none 5,910 8.41
Certificates of Deposit
-----------------------
3.70 91 Day Fixed term, fixed rate 1,000 105 0.15
5.21 6 Mo. Fixed term, fixed rate 1,000 6,858 9.75
4.95 9 Mo. Fixed term, fixed rate 1,000 51 0.07
5.62 12 Mo. Fixed term, fixed rate 1,000 14,654 20.84
6.05 18 Mo. Fixed term, fixed rate 1,000 724 1.03
6.75 20 Mo. Fixed term, fixed rate 1,000 100 0.14
6.11 24 Mo. Fixed term, fixed rate 1,000 13,746 19.55
6.18 30 Mos Fixed term, fixed rate 1,000 2,211 3.15
5.66 36 Mo. Fixed term, fixed rate 1,000 6,078 8.64
5.17 42 Mo. Fixed term, fixed rate 1,000 185 0.26
5.96 48 Mo. Fixed term, fixed rate 1,000 4,793 6.82
6.04 60 Mo. Fixed term, fixed rate 1,000 5,871 8.35
7.59 96 Mo. Fixed term, fixed rate 1,000 21 0.03
------- ------
Total $70,316 100.00%
======= ======
</TABLE>
The following table indicates the amount of the Savings Bank's jumbo
certificates of deposit by time remaining until maturity as of April 30, 1996.
Jumbo certificates of deposit are certificates in amounts of $100,000 or more.
<TABLE>
<CAPTION>
Maturity Period Amount
--------------- -------------
(In Thousands
<S> <C>
Three months or less $ 418
Over three through six months 1,123
Over six through 12 months 2,221
Over 12 months 2,117
------
Total jumbo certificates
of deposit $5,879
======
</TABLE>
<PAGE>
EXHIBIT I-13
Fulton Savings Bank, FSB
Time Deposit Rate/Maturity
<TABLE>
<CAPTION>
At April 30,
------------------------------------
1996 1995 1994
---- ---- ----
(In Thousands)
<S> <C> <C> <C>
2.00-2.99% .............. $ -- $ 8 $ 77
3.00-3.99% .............. 105 451 14,348
4.00-4.99% .............. 6,119 12,879 18,785
5.00-5.99% .............. 26,144 16,993 8,148
6.00-6.99% .............. 20,261 17,539 3,005
7.00-7.99% .............. 2,751 2,862 1,424
8.00-8.99% .............. 17 45 55
9.00-9.99% .............. -- -- --
10.00-10.99% ............ -- 1 1
------- ------- -------
Total ................... $55,397 $50,778 $45,843
======= ======= =======
</TABLE>
The following table sets forth the amount and maturities of time deposits
at April 30, 1996.
<TABLE>
<CAPTION>
Amount Due
------------------------------------------------------------------
Less Than 1-2 2-3 3-4 After
One Year Years Years Years 4 Years Total
-------- ----- ----- ----- ------- -----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
3.00-3.99% .............. $ 105 $ -- $ -- $ -- $ -- $ 105
4.00-4.99% .............. 5,962 157 -- -- -- 6,119
5.00-5.99% .............. 17,458 6,404 2,130 140 12 26,144
6.00-6.99% .............. 8,674 6,628 2,117 2,506 336 20,261
7.00-7.99% .............. 1,767 133 505 261 85 2,751
8.00-8.99% .............. -- -- 3 -- 14 17
-------- -------- ------- ------ ------ -------
Total ................... $ 33,966 $ 13,322 $ 4,755 $2,907 $ 447 $55,397
======== ======== ======= ====== ====== =======
</TABLE>
<PAGE>
EXHIBIT I-14
Fulton Savings Bank, FSB
Borrowings
<TABLE>
<CAPTION>
At of For the
Year Ended April 30,
-----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
(Dollars in Thousands)
Maximum amount of FHLB advances outstanding
at any month end during the period........ $5,500 $4,500 --
Approximate average FHLB advances
outstanding............................... 4,555 3,093 --
Approximate weighted average rate paid on
FHLB advances during the period........... 6.62% 7.23% --
Balance of FHLB advances outstanding
at end of period.......................... $5,000 $4,500 --
Weighted average rate paid on
FHLB advances at end of period............ 6.75% 6.84% --
</TABLE>
<PAGE>
EXHIBIT II-1
Fulton Savings Bank, FSB
List of Branch Offices
Properties
The Savings Bank operates two full service facilities, both of which it
owns. At April 30, 1996, the net book value of the property (including land and
building) and the Savings Bank's fixtures, furniture and equipment was $1.3
million.
<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 July 12, 1996 8.25% 5.13% 5.86% 7.06%
</TABLE>
(1) End of period data.
Source: SNL Securities.
<PAGE>
EXHIBIT II-3
Sources of Personal Income/Employment Sectors
<PAGE>
July 11, 1996
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(29-000) MISSOURI
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ITEM 1989 1990 1991 1992 1993 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income by place of residence
Total personal income ($000) 84,347,614 89,245,490 93,347,234 98.554,001 102,092,560 108,639,057
Nonfarm personal income 83,574,887 88,609,858 92,794,651 97,627,530 101,493,343 107,779,064
Farm income 2/ 772,727 635,632 552,583 926,471 599,217 859.993
Population (thousands) 3/ 5,095.8 5,126.3 5,157.7 5,192.8 5,235.2 5,277.7
Per capita personal income (dollars) 16,552 17,409 18,099 18,979 19,501 20,585
Derivation of total personal income
Earnings by place of work 61,700,150 64,814,625 66,740,347 71,220,222 74,109,361 79,334,967
Less: Personal cont. for social insur. 4/ 4,050,987 4,168,829 4,352,675 4,598,082 4,352,675 5,245,334
Plus: Adjustment for residence 5/ -2,459,587 -2,580,294 -2,593,683 -2,701,542 -2,785,157 -2,871,560
Equals: Net earn. by place of residence 55,189,576 58,065,502 59,793,989 63,920,598 66,489,847 71,218,073
Plus: Dividends, interest, and rent 6/ 16,744,130 17,812,528 17,885,642 17,915,777 17,599,728 18,641,606
Plus: Transfer payments 12,413,908 13,367,460 15,667,603 16,717,626 18,002,985 18,779,378
Earnings by place of work
Components of Earnings:
Wages and salaries 50,199,921 52,664,675 53,931,984 56,880,266 59,111,717 62,808,155
Other labor income 5,046,170 5,436,324 5,960,407 6,810,203 7,306,447 7,865,431
Proprietors' income 7/ 6,454,059 6,713,626 6,847,956 7,529,753 7,691,197 8,661,381
Farm proprietors' 616,943 457,930 379,073 734,121 392,518 666,214
Nonfarm proprietors' income 5,837,116 6,255,696 6,468,883 6,795,632 7,298,679 7,995,167
Earnings by Industry:
Farm earnings 772,727 635,632 552,632 926,471 599,217 859,993
Nonfarm earnings 60,927,423 64,178,993 66,187,764 70,293,751 73,510,144 78,474,974
Private earnings 52,320,506 54,922,772 56,382,676 60,130,431 62,957,089 67,422,161
Ag. serv .for .fish .and other 8/ 252,617 293,631 346,804 371,242 398,340 442,945
Mining 215,428 228,304 230,823 238,100 258,159 240,190
Construction 3,512,115 3,564,276 3,388,798 3,609,734 3,901,730 4,734,464
Manufacturing 13,732,076 13,953,508 13,973,228 14,722,806 14,974,341 15,772,046
Nondurable goods 5,661,254 5,822,461 6,034,252 6,319,648 6,570,064 6,856,380
Durable goods 8,070,822 8,131,047 7,938,976 8,403,158 8,404,277 8,915,666
Transportation and public utilities 5,635,237 6,130,253 6,346,741 6,431,224 6,615,224 6,828,529
Wholesale trade 4,594,620 4,790,688 4,963,144 5,354,888 5,366,602 5,701,931
Retail trade 6,170,291 6,294,599 6,495,646 6,945,027 7,387,124 7,937,077
Finance, insurance, and rea1 estate 4,022,257 4,305,709 4,443,696 4,874,095 5,170,035 5,428,604
Services 14,185,865 15,361,804 16,193,796 17,583,315 18,885,358 20,336,375
Government and government enterprises 8,606,917 9,256,221 9,805,088 10,163,320 10,553,055 11,052,813
Federal, civilian 2,195,806 2,362,425 2,497,104 2,507,190 2,585,060 2,671,733
Military 512,133 536,323 561,827 598,053 570,658 542,871
State and local 5,898,978 6,357,473 6,746,157 7,058,077 7,397,337 7,838,209
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
July 11, 1996
PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY 1/
For Counties and Metropolitan Areas
(thousands of dollars)
(29-027) CALLAWAY MISSOURI
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Item 1989 1990 1991 1992 1993 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income by place of residence
Total personal income ($000) 455,122 480,489 496,342 522,355 533,405 571,461
Nonfarm personal income 448,939 476,454 491,035 513,971 527,205 565,801
Farm income 2/ 6,183 4,035 5,307 8,384 6,200 5,660
Population (thousands) 3/ 32.6 32.9 33.3 33.6 34.3 34.6
Per capita personal income (dollars) 13,944 14,608 14,900 15,529 15,542 16,530
Derivation of total personal income
Earnings by place of work 289,533 300,646 304,451 322,754 323,617 332,078
Less: Personal cont. for social insur. 4/ 18,184 18,504 18,943 20,247 20,558 21,595
Plus: Adjustment for residence 5/ 38,842 44,942 45,799 51,435 60,449 72,664
Equals: Net earn. by place of residence 310,191 327,084 331,307 353,942 363,508 383,147
Plus: Dividends, interest, and rent 6/ 73,694 76,204 74,233 74,263 72,847 77,310
Plus: Transfer payments 71,237 77,201 90,802 94,150 97,050 111,004
Earnings by place of work
Components of Earnings:
Wages and salaries 231,086 240,356 240,724 251,967 250,537 254,555
Other labor income 25,219 27,117 28,884 32,662 34,147 35,452
Proprietors' income 7/ 33,228 33,173 34,843 38,125 38,933 42,071
Farm proprietors' income 5,086 2,784 4,085 7,030 4,747 4,297
Nonfarm proprietors' income 28,142 30,389 30,758 31,095 34,186 37,774
Earnings by Industry:
Farm earnings 6,183 4,035 5,307 8,384 6,200 5,660
Nonfarm earnings 283,350 296,611 299,144 314,370 317,417 326,418
Private earnings 212,246 221,488 223,114 234,397 236,263 244,833
Ag. serv., for ., fish., and other 8/ 1,223 1,496 2,309 2,523 2,783 3,024
Mining 1,616 1,735 1,925 1,954 2,154 2,256
Construction 11,931 13,253 13,133 22,367 24,515 20,943
Manufacturing 58,179 62,292 58,860 54,951 55,721 64,738
Nondurable goods 11,043 11,752 11,091 13,656 14,507 15,442
Durable goods 47,136 50,540 47,769 41,295 41,214 49,296
Transportation and public utilities 66,291 66,559 60,523 65,594 64,337 60,608
Wholesale trade 5,876 6,439 7,459 7,792 5,923 7,023
Retail trade 26,001 24,381 25,328 26,982 28,199 30,904
Finance. insurance, and real estate 4,909 6,544 5,406 6,426 7,218 7,598
Services 36,223 38,789 48,171 45,808 45,413 47,739
Government and government enterprises 71,104 75,123 76,030 79,973 81,154 81,585
Federal, civilian 5,348 5,638 5,654 6,038 6,176 6,343
Military 2,875 2,708 3,519 3,309 2,924 3,037
State and local 62,881 66,777 66,857 70,626 72,054 72,205
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
Footnotes for Table CAO5
1/ 1969-74 based on 1967 SIC. 1975-87 based on 1972 SIC. 1988-94 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 1990-94 reflect
county population estimates available as of October 1995.
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 Area into the 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 June 1[illegible] BUREAU OF ECONOMIC ANALYSIS
<PAGE>
July 11,1996
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(29-000) MISSOURI
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ITEM 1989 1990 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Employment by Place of Work
Total full- & part-time employment 2,930,940 2,978,516 2,951,490 2,984,780 3,044,762 3,127,435
By Type:
Wage and salary employment 2,459,914 2,481,271 2,441,175 2,473,895 2,527,854 2,604,020
Proprietors' employment 471,026 497,245 510,315 510,885 516,908 523,415
Farm proprietors 113,967 112,555 110,839 111,410 109,600 107,552
Nonfarm proprietors' employment 2/ 357,059 384,690 399,476 399,475 407,308 415,863
By Industry:
Farm employment 130,122 126,838 122,434 125,356 121,698 121,440
Nonfarm employment 2,800,818 2,851,678 2,829,056 2,859,424 2,923,064 3,005,995
Private employment 2,402,587 2,445,138 2,421,766 2,448,697 2,509,149 2,587,978
Ag.serv..for..fish.. and other 3/ 21,618 23,639 25,036 25,307 27,930 29,810
Mining 8,258 8,505 7,628 7,619 7,477 7,483
Construction 145,791 146,292 141,278 148,432 154,913 171,057
Manufacturing 451,615 449,207 429,498 423,672 423,778 428,030
Transportation and public utilities 174,625 180,601 179,703 175,778 180,223 184,444
Wholesale trade 153,479 151,533 151,102 152,469 148,553 151,969
Retail trade 493,606 493,890 490,669 499,642 512,157 531,002
Finance, insurance, and real estate 208,907 211,890 208,538 204,801 210,460 214,326
Services 744,688 779,581 788,314 810,977 843,658 869,857
Government and government enterprises 398,231 406,540 407,290 410,727 413,915 418,017
Federal, civilian 72,245 72,946 71,541 70,114 68,386 67,537
Military 45,142 44,493 42,940 42,939 39,862 36,785
State and local 280,844 289,101 292,809 297,674 305,667 313,695
</TABLE>
See footnotes at end of table. REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
July 11, 1996
FULL-TIME AND PART-TIME EMPLOYEES BY MAJOR INDUSTRY 1/
For Counties and Metropolitan Areas
(number of jobs)
(29-027) CALLAWAY MISSOURI
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Item 1989 1990 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Employment by Place of Work
Total full- & part-time employment 16,216 16,399 16,528 16,247 15,962 16,223
By Type:
Wage and salary employment 12,878 12,882 12,897 12,655 12,344 12,574
Proprietors' employment 3,338 3,517 3,631 3,592 3,618 3,649
Farm proprietors' employment 1,397 1,382 1,361 1,368 1,346 1,320
Nonfarm proprietors' employment 2/ 1,941 2,135 2,270 2,224 2,272 2,329
By Industry:
Farm employment 1,516 1,487 1,446 1,470 1,435 1,422
Nonfarm employment 14,700 14,912 15,082 14,777 14,527 14,801
Private employment 10,829 10,983 11,262 10,820 10,562 10,910
Ag.serv.,for.,fish., and other 3/ 126 131 190 195 224 234
Mining 63 69 72 61 63 63
Construction 641 725 745 987 994 921
Manufacturing 2,350 2,335 2,132 2,003 2,007 2,189
Transportation and public utilities 1,761 1,783 1,717 1,522 1,302 1,267
Wholesale trade 341 307 326 326 301 342
Retail trade 2,180 2,096 2,117 2,247 2,183 2,359
Finance, insurance, and real estate 492 485 478 475 498 508
Services 2,902 3,052 3,485 3,004 2,990 3,027
Government and government enterprises 3,871 3,929 3,820 3,957 3,965 3,891
Federal, civilian 200 199 191 191 182 176
Military 228 223 233 215 201 191
State and local 3,443 3,507 3,396 3,551 3,582 3,524
</TABLE>
See footnotes at end of table REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
Footnotes for Table CA25
1/ 1969-74 based on 1967 SIC. 1975-87 based on 1972 SIC. 1988-94 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 and consulates in the
United States.
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 county, 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 Bor. and
Aleutians West Census Area. Denali and Lake + Peninsula Boroughs begin in
1991. Estimates form 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.
<PAGE>
<TABLE>
<CAPTION>
July 11, 1996
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Areas
(29-000) MISSOURI
- -----------------------------------------------------------------------------------------------------------------------------------
Item 1989 1990 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Place of Residence Profile
Total personal income ($000) 84,347,614 89,245,490 93,347,234 98,554,001 102,092,560 108,639,057
Nonfarm personal income 83,574,887 88,609,858 92,794,651 97,627,530 101,493,343 107,779,064
Farm income 772,727 635,632 552,583 926,471 599,217 859,993
Derivation of Total Personal Income
Net earnings 1/ 55,189,576 58,065,502 59,793,989 63,920,598 66,489,847 71,218,073
Transfer payments 12,413,908 13,367,460 15,667,603 16,717,626 18,002,985 18,779,378
Income maintenance 2/ 830,971 944,198 1,110,208 1,334,990 1,422,636 1,481,597
Unemployment insurance 251,646 322,266 439,690 576,835 514,852 331,416
Retirement and other 11,331,291 12,100,996 14,118,705 14,805,801 16,065,497 16,966,365
Dividends, interest, and rent 16,744,130 17,812,528 17,885,642 17,915,777 17,599,728 18,641,606
Population (thousands) 3/ 5,095.8 5,126.3 5,157.7 5,192.8 5,235.2 5,277.7
Per Capita Incomes ($) 4/
Per capita personal income 16,552 17,409 18,099 18,979 19,501 20,585
Per capita net earnings 10,830 11,327 11,593 12,309 12,700 13,494
Per capita transfer payments 2,436 2,608 3,038 3,219 3,439 3,558
Per capita income maintenance 163 184 215 257 272 281
Per capita unemployment insurance 49 63 85 111 98 63
Per capita retirement & other 2,224 2,361 2,737 2,851 3,069 3,215
Per capital dividends, interest & rent 3,286 3,475 3,468 3,450 3,362 3,532
Place of Work Profile
Total earnings (place of work, $000) 61,700,150 64,814,625 66,740,347 71,220,222 74,109,361 79,334,967
Wages and salaries 50,199,921 52,664,675 53,931,984 56,880,266 59,111,717 62,808,155
Other labor income 5,046,170 5,436,324 5,960,407 6,810,203 7,306,447 7,865,431
Proprietors' income 6,454,059 6,713,626 6,847,956 7,529,753 7,691,197 8,661,381
Nonfarm proprietor's income 5,837,116 6,255,696 6,468,883 6,795,632 7,298,679 7,995,167
Farm proprietors' income 616,943 457,930 379,073 734,121 392,518 666,214
Total employment (full & part-time) 2,930,940 2,978,516 2,951,490 2,984,780 3,044,762 3,127,435
Wage and salary jobs 2,459,914 2,481,271 2,441,175 2,473,895 2,527,854 2,604,020
Number of proprietors 471,026 497,245 510,315 510,885 516,908 523,415
Number of nonfarm proprietors 5/ 357,059 384,690 399,476 399,475 407,308 415,863
Number of farm proprietors 113,967 112,555 110,839 111,410 109,600 107,552
Average earnings per job ($) 21,051 21,761 22,612 23,861 24,340 25,367
Wage & salary earnings per job ($) 20,407 21,225 22,093 22,992 23,384 24,120
Average earnings per nonfarm
proprietor ($) 16,348 16,262 16,193 17,011 17,919 19,225
See footnotes at end of table REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
July 11, 1996
REGIONAL ECONOMIC PROFILE
For Counties and Metropolitan Area
(29-027) CALLAWAY MISSOURI
- -----------------------------------------------------------------------------------------------------------------------------------
Item 1989 1990 1991 1992 1993 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Place of Residence Profile
Total personal income ($000) 455,122 480,489 496,342 522,355 533,405 571,461
Nonfarm prsonal income 488,939 476,454 491,035 513,971 527,205 565,801
Farm income 6,183 4,035 5,307 8,384 6,200 5,660
Derivation of Total Personal Income
Net earnings 1/ 310,191 327,084 331,307 353,942 363,508 383,147
Transfer payments 71,237 77,201 90,802 94,150 97,050 111,004
Income maintenace 2/ 3,906 4,346 5,007 6,095 6,546 6,722
Unemployment Insurance 1,311 1,552 2,173 3,074 2,771 1,520
Retire and other 66,020 71,303 83,622 84,981 87,733 102,762
Dividends interest and rent 73,694 76,204 74,233 74,263 72,847 77,310
Population (thousands) 3/ 32.6 32.9 33.3 33.6 34.3 34.6
Per Capita Incomes ($) 4/
Per capita personal income 13,944 14,608 14,900 15,529 15,542 16,530
per capita net earnings 9,503 9,944 9,946 10,522 10,592 11,083
per capita transfer payments 2,183 2,347 2,726 2,799 2,828 3,211
Per capita income maintenance 120 132 150 181 191 194
per capita unemployment insurance 40 47 65 91 81 44
per capita retirement & other 2,023 2,168 2,510 2,526 2,556 2,972
per capita dividends, interest, & rent 2,258 2,317 2,228 2,208 2,123 2,236
Place of work profile
Total earnings (place of work, $000) 289,533 300,646 304,451 322,754 323,617 332,078
Wages and salaries 231,086 240,356 240,724 251,967 250,537 254,555
Other labor income 25,219 27,117 28,884 32,662 34,147 35,452
Proprietors' income 33,228 33,173 34,843 38,125 38,933 42,071
Nonfarm proprietors' income 28,142 30,389 30,758 31,095 34,186 37,774
Farm proprietors' income 5,086 2,784 4,085 7,030 4,747 4,297
Total employment (full & part-time) 16,216 16,399 16,528 16,247 15,962 16,223
Wage & salary jobs 12,878 12,882 12,897 12,655 12,344 12,574
Number of proprietors 3,338 3,517 3,631 3,592 3,618 3,649
Number of nonfarm proprietors 5/ 1,941 2,135 2,270 2,224 2,272 2,329
Number of farm proprietors 1,397 1,382 1,361 1,368 1,346 1,320
Average earnings per job ($) 17,855 18,333 18,420 19,865 20,274 20,470
Wage & salary earnings per job ($) 17,944 18,658 18,665 19,910 20,296 20,245
Average earnings per nonfarm proprietor ($) 14,499 14,234 13,550 13,982 15,047 16,219
</TABLE>
See footnotes at end of table.
Table CA30 June 1996 REGIONAL ECONOMIC INFORMATION SYSTEM
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 1990-94
reflect county population estimates available as of October 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 Aleutians East Bor.
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 $50,000 or less than 10 jobs, as appropriate. Estimates are
included in totals.
(N) Data not available for this year.
REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30 June 1996 BUREAU OF ECONOMIC ANALYSIS
<PAGE>
EXHIBIT III-1
General Characteristics of Publicly-Traded Institutions
<PAGE>
RP FINANCIAL, LC.
------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
July 15, 1996(1)
<TABLE>
<CAPTION>
Primary Operating Total Fiscal Conv. Stock Market
Ticker Financial Institution Exchg. Market Strat.(2) Assets Offices Year Date Price Value
- ------- ----------------------------------- ------ ----------------- -------- ------ ------- ----- ----- ------ ------
($Mil) ($) ($Mil)
California Companies
- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AHM Ahmanson and Co. H.F. of CA NYSE Nationwide M.B. 49,782 335 12-31 10/72 25.00 2,813
GWF Great Western Fin. Corp. of CA NYSE CA,FL Div. 43,763 418 12-31 / 21.88 3,002
GDW Golden West Fin. Corp. of CA NYSE Nationwide M.B. 35,014 232 12-31 05/59 52.87 3,099
GLN Glendale Fed. Bk, FSB of CA NYSE CA Div. 14,368 148 06-30 10/83 17.25 760
CAL CalFed Inc. of Los Angeles CA NYSE CA,NV Div. 14,280 126 12-31 03/83 17.37 857
CSA Coast Savings Financial of CA NYSE California R.E. 8,240 89 12-31 12/85 30.75 571
DSL Downey Financial Corp. of CA NYSE Southern CA Thrift 4,653 52 12-31 01/71 21.00 356
FED FirstFed Fin. Corp. of CA NYSE Los Angeles CA R.E. 4,166 25 12-31 12/83 17.37 185
WES Westcorp Inc. of Orange CA NYSE California Div. 3,077 25 12-31 05/86 18.12 468
BVFS Bay View Capital Corp. of CA OTC San Francisco CA M.B. 2,910 27 12-31 05/86 32.50 224
AFFFZ America First Fin. Fund of CA OTC San Francisco CA Div. 2,333 36 12-31 / 26.25 158
CENF CENFED Financial Corp. of CA OTC Los Angeles CA Thrift 2,114 18 12-31 10/91 21.62 109
PFFB PFF Bancorp of Pomona CA OTC Southern CA Thrift 2,008 23 03-31 03/96 10.75 213
FRC First Republic Bancorp of CA (3) NYSE CA,NV M.B. 1,973 10 12-31 / 13.62 100
CFHC California Fin. Hld. Co. of CA OTC Central CA Thrift 1,278 22 12-31 04/83 22.37 105
REDF RedFed Bancorp of Redlands CA OTC Southern CA Thrift 858 14 12-31 04/94 8.50 35
HTHR Hawthorne Fin. Corp. of CA OTC Southern CA Thrift 773 9 12-31 / 8.25 21
HEMT HF Bancorp of Hemet CA OTC Southern CA Thrift 754 12 06-30 06/95 9.25 61
QCBC Quaker City Bancorp of CA OTC Los Angeles CA R.E. 693 8 06-30 12/93 12.87 51
PROV Provident Fin. Holdings of CA OTC M.B. 602 P 0 06-30 06/96 10.50 54
HBNK Highland Federal Bank of CA OTC Los Angeles CA R.E. 442 11 12-31 / 15.00 34
SGVB SGV Bancorp of W. Covina CA OTC Los Angeles CA Thrift 333 6 06-30 06/95 8.25 23
MBBC Monterey Bay Bancorp of CA OTC West Central CA Thrift 319 6 12-31 02/95 11.75 40
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 / 8.50 25
PSSB Palm Springs SB of CA OTC Southern CA Thrift 192 4 12-31 / 13.87 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
</TABLE>
Florida Companies
-----------------
<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
July 15, 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)
Florida Companies (continued)
-----------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BANC BankAtlantic Bancorp of FL OTC Southeastern FL M.B. 1,643 40 12-31 11/83 13.25 156
FFPB First Palm Beach Bancorp of FL OTC Southeast FL Thrift 1,465 23 09-30 09/93 20.25 105
HOFL Home Financial Corp. of FL OTC Southern FL R.E. 1,227 8 09-30 10/94 13.44 333
HARB Harbor FSB, MHC of FL (45.7) OTC Eastern FL Thrift 933 22 09-30 01/94 24.00 118
FFFL Fidelity FSB, MHC of FL(47.2) OTC Southeast FL Thrift 792 20 12-31 01/94 12.50 84
BKUNA BankUnited SA of FL OTC Miami FL Thrift 738 6 09-30 12/85 7.25 41
CMSV Commty. Svgs, MHC of FL(47.6) OTC Southeast FL Thrift 632 17 09-30 10/94 16.00 78
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 18.00 47
FFFG F.F.O. Financial Group of FL OTC Central FL R.E. 306 10 12-31 10/88 2.62 22
FFPC Florida First Bancorp of FL OTC Northwestern FL Thrift 304 9 12-31 11/86 11.00 37
FFML First Family Bank, FSB of FL OTC Central FL Thrift 153 D 5 06-30 10/92 21.00 11
</TABLE>
Mid-Atlantic Companies
----------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DME Dime Savings Bank, FSB of NY (3) NYSE NY,NJ,FL M.B. 19,414 87 12-31 08/86 12.50 1,236
GPT GreenPoint Fin. Corp. of NY (3) NYSE New York City NY Thrift 14,469 84 06-30 01/94 27.50 1,443
SVRN Sovereign Bancorp of PA OTC PA,NJ,DE M.B. 8,411 121 12-31 08/86 10.00 478
ASFC Astoria Financial Corp. of NY OTC New York City NY Thrift 6,708 46 12-31 11/93 26.19 574
COFD Collective Bancorp Inc. of NJ OTC Southern NJ Thrift 5,059 79 06-30 02/84 23.25 474
LISB Long Island Bancorp of NY OTC Long Island NY M.B. 4,834 36 09-30 04/94 29.25 727
RCSB RCSB Financial, Inc. of NY (3) OTC NY M.B. 4,111 34 11-30 04/86 25.75 320
ALBK ALBANK Fin. Corp. of Albany NY OTC NY,MA Thrift 3,333 57 06-30 04/92 25.62 349
ROSE TR Financial Corp. of NY OTC New York, NY Thrift 3,002 15 12-31 06/93 26.50 237
NYB New York Bancorp, Inc. of NY AMEX Southeastern NY Thrift 2,754 27 09-30 01/88 25.87 303
GRTR Greater New York SB of NY (3) OTC New York NY Div. 2,576 14 12-31 06/87 10.62 141
CMSB Cmnwealth Bancorp of PA OTC Philadelphia PA M.B. 2,140 P 35 06-30 06/96 10.19 183
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 11.50 269
MLFB MLF Bancorp of Villanova PA OTC Philadelphia PA M.B. 1,766 17 03-31 08/94 24.50 153
RELY Reliance Bancorp of NY OTC NYC NY Thrift 1,744 17 06-30 03/94 16.00 148
NSBK Northside SB of Bronx NY (3) OTC New York NY Thrift 1,580 17 09-30 04/86 35.25 170
</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
July 15, 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)
Mid-Atlantic Companies (continued)
- -----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JSBF JSB Financial, Inc. of NY OTC New York City R.E. 1,548 13 12-31 06/90 32.75 338
HAVN Haven Bancorp of Woodhaven NY OTC New York City NY Thrift 1,485 9 12-31 09/93 28.00 120
QCSB Queens County SB of NY (3) OTC New York City NY R.E. 1,260 9 12-31 11/93 47.00 287
WSFS WSFS Financial Corp. of DE (3) OTC DE Div. 1,259 13 12-31 11/86 6.88 98
HARS Harris SB, MHC of PA (23.1) OTC Southeast PA Thrift 1,249 25 12-31 01/94 16.00 179
DIME Dime Community Bancorp of NY OTC Thrift 1,218 P 0 06-30 06/96 11.75 171
OCFC Ocean Fin. Corp. of NJ OTC Thrift 1,179 P 0 12-31 07/96 20.12 169
MFSL Maryland Fed. Bancorp of MD OTC MD Thrift 1,143 25 02-28 06/87 29.31 92
YFED York Financial Corp. of PA OTC PA,MD Thrift 1,049 22 06-30 02/84 16.75 101
PFSB PennFed Fin. Services of NJ OTC Northern NJ Thrift 1,023 17 06-30 07/94 14.94 76
FSLA First SB, SLA MHC of NJ (37.6) OTC Eastern NJ Thrift 959 22 12-31 06/92 15.75 103
PVSA Parkvale Financial Corp of PA OTC Southwestern PA Thrift 914 28 06-30 07/87 24.50 79
PKPS Poughkeepsie SB of NY OTC Poughkeepsie NY R.E. 839 7 12-31 11/85 5.06 63
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 28.00 74
IBSF IBS Financial Corp. of NJ OTC Southwest NJ Thrift 757 8 09-30 10/94 12.94 148
FFIC Flushing Fin. Corp. of NY (3) OTC New York, NY Thrift 739 7 12-31 11/95 16.87 134
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 14.62 44
SFIN Statewide Fin. Corp. of NJ OTC Northern NJ Thrift 634 14 03-31 10/95 11.25 59
FSFI First State Fin. Serv. of NJ OTC Northeastern NJ Thrift 629 12 09-30 12/87 12.87 52
FCIT First Cit. Fin. Corp of MD OTC DC Metro Area Thrift 624 14 12-31 12/86 16.25 47
PSAB Prime Bancorp, Inc. of PA OTC Southeastern PA Thrift 609 17 12-31 11/88 18.50 69
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 38.25 63
FBBC First Bell Bancorp of PA OTC Pittsburgh PA Thrift 543 7 12-31 06/95 13.37 109
THRD TF Financial Corp. of PA OTC Philadelphia PA Thrift 519 11 06-30 07/94 14.25 64
TSBS Trenton SB, FSB MHC of NJ (35.0 OTC Central NJ Thrift 519 10 12-31 08/95 12.62 112
FMCO FMS Financial Corp. of NJ OTC Southern NJ Thrift 506 14 12-31 12/88 16.25 40
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 30.00 80
LVSB Lakeview SB of Paterson NJ OTC Northern NJ Thrift 455 8 07-31 12/93 20.25 46
MSBB MSB Bancorp of Middletown NY (3) OTC Southeastern NY Thrift 454 D 9 09-30 08/92 16.50 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
July 15, 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)
Mid-Atlantic Companies (continued)
__________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PULS Pulse Bancorp of S. River NJ OTC Central NJ Thrift 452 4 09-30 09/86 17.75 69
IROQ Iroquois Bancorp of Auburn NY (3) OTC Central NY Thrift 451 9 12-31 01/86 16.00 38
ANBK American Nat'l Bancorp of MD OTC Baltimore MD R.E. 449 9 07-31 11/95 10.50 42
AHCI Ambanc Holding Co. of NY (3) OTC East-Central NY Thrift 392 9 12-31 12/95 9.50 52
PBCI Pamrapo Bancorp, Inc. of NJ OTC Northern NJ Thrift 368 8 12-31 10/89 20.00 66
CARV Carver FSB of New York, NY OTC New York, NY Thrift 368 8 03-31 10/94 8.00 19
SHEN First Shenango Bancorp of PA OTC Western PA Thrift 356 4 12-31 04/93 20.06 46
PFNC Progress Financial Corp. of PA OTC Southeastern PA M.B. 348 9 12-31 07/83 6.25 23
RARB Raritan Bancorp. of Raritan NJ (3) OTC Central NJ Thrift 347 5 12-31 03/87 20.50 29
FOBC Fed One Bancorp of Wheeling WV OTC Northern WV,OH Thrift 340 9 12-31 01/95 14.12 35
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 21.12 46
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 10.25 31
CATB Catskill Fin. Corp. of NY (3) OTC Albany NY Thrift 279 P 3 09-30 04/96 10.00 57
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 18.25 29
HARL Harleysville SA of PA OTC Southeastern PA Thrift 274 4 09-30 08/87 17.50 23
LFED Leeds FSB, MHC of MD (35.3) OTC Baltimore MD Thrift 267 1 06-30 03/94 13.75 47
IFSB Independence FSB of DC OTC Washington DC Ret. 264 D 4 12-31 06/85 7.75 10
EQSB Equitable FSB of Wheaton MD OTC Central MD Thrift 260 4 09-30 09/93 24.00 14
FBER First Bergen Bancorp of NJ OTC Northern NJ Thrift 259 2 09-30 04/96 9.12 29
WSB Washington SB, FSB of MD AMEX Southeastern MD Thrift 255 3 07-31 / 5.63 24
FIBC Financial Bancorp of NY OTC New York, NY Thrift 252 5 09-30 08/94 12.37 23
YFCB Yonkers Fin. Corp. of NY OTC Yonkers NY Thrift 241 P 4 09-30 04/96 9.75 35
WVFC WVS Financial Corp. of PA (3) OTC Pittsburgh PA Thrift 240 5 06-30 11/93 20.50 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 18.00 13
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 13.50 13
WYNE Wayne Bancorp of NJ OTC Thrift 214 P 0 12-31 06/96 10.75 24
HRBF Harbor Federal Bancorp of MD OTC Baltimore MD Thrift 197 6 03-31 08/94 12.50 22
</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
July 15, 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)
Mid-Atlantic Companies (continued)
----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PEEK Peekskill Fin. Corp. of NY OTC Southeast NY Thrift 194 3 06-30 12/95 11.87 49
LARL Laurel Capital Group of PA OTC Southwestern PA Thrift 193 6 06-30 02/87 14.75 22
PHFC Pittsburgh Home Fin. of PA OTC Pittsburgh PA Thrift 180 P 6 09-30 04/96 9.75 21
SBFL SB Fing. Lakes MHC of NY(33.0) OTC Western NY Thrift 177 3 04-30 11/94 16.00 29
SFED SFS Bancorp of Schenectady NY OTC Eastern NY Thrift 166 3 12-31 06/95 12.25 17
TPNZ Tappan Zee Fin. Corp. of NY OTC Southeast NY Thrift 115 1 03-31 10/95 11.62 19
WHGB WHG Bancshares of MD OTC Baltimore MD Thrift 112 5 09-30 04/96 11.25 18
PRBC Prestige Bancorp of PA OTC Thrift 102 P 0 12-31 06/96 9.87 10
WWFC Westwood Fin. Corp. of NJ OTC Northern NJ Thrift 88 P 2 03-31 06/96 10.50 7
THBC Troy Hill Bancorp of PA OTC Pittsburgh PA Thrift 80 2 06-30 06/94 13.00 14
ALBC Albion Banc Corp. of Albion NY OTC Western NY Thrift 57 2 09-30 07/93 16.75 4
BRFC Bridgeville SB, FSB of PA OTC Western PA Thrift 56 1 12-31 10/94 15.00 17
</TABLE>
<TABLE>
Mid-West Companies
------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFB Standard Fed. Bancorp of MI NYSE MI,IN,OH M.B. 13,505 164 12-31 01/87 38.50 1,205
COFI Charter One Financial of OH OTC Northeastern OH Div. 13,174 94 12-31 01/88 33.62 1,517
RFED Roosevelt Fin. Grp. Inc. of MO OTC MO,IL,KS Div. 9,135 78 12-31 01/87 17.37 732
TCB TCF Financial Corp. of MN NYSE MN,IL,MI,WI,OH Div. 7,039 180 12-31 06/86 33.37 1,196
CFB Commercial Federal Corp. of NE NYSE NE,CO,KS,OK M.B. 6,617 91 06-30 12/84 36.12 544
FFHC First Financial Corp. of WI OTC WI,IL Div. 5,419 129 12-31 12/80 22.75 680
SPBC St. Paul Bancorp, Inc. of IL OTC Chicago IL Div. 4,143 52 12-31 05/87 22.62 420
SECP Security Capital Corp. of WI OTC Wisconsin Div. 3,345 42 06-30 01/94 59.75 570
CTZN CitFed Bancorp of Dayton OH OTC Dayton OH M.B. 2,598 33 03-31 01/92 36.25 206
GTFN Great Financial Corp. of KY OTC Kentucky M.B. 2,477 40 12-31 03/94 25.50 374
STND Standard Fin. of Chicago IL OTC Chicago IL Thrift 2,187 13 12-31 08/94 16.12 270
MAFB MAF Bancorp of IL OTC Chicago IL Thrift 1,980 13 06-30 01/90 23.50 123
ABCW Anchor Bancorp Wisconsin of WI OTC Wisconsin M.B. 1,755 32 03-31 07/92 34.62 171
FISB First Indiana Corp. of IN OTC Central IN M.B. 1,477 28 12-31 08/83 22.25 184
FTFC First Fed. Capital Corp. of WI OTC Southern WI M.B. 1,382 40 12-31 11/89 19.75 124
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 12.62 86
</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
July 19, 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)
Mid-West Companies (continued)
------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JSBA Jefferson Svgs Bancorp of MO OTC St. Louis MO,TX Thrift 1,143 D 21 12-31 04/93 24.50 102
FFSW First Fed Fin. Serv. of OH OTC Northeastern OH Thrift 993 18 12-31 04/87 29.50 97
AADV Advantage Bancorp of WI OTC WI,IL Thrift 980 15 09-30 03/92 33.25 115
CFSB CFSB Bancorp of Lansing MI OTC Central MI Thrift 772 18 12-31 06/90 20.25 91
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 6.00 26
IFSL Indiana Federal Corp. of IN OTC Northwestern IN Thrift 718 15 12-31 02/87 19.50 92
HNFC Hinsdale Financial Corp. of IL OTC Chicago IL M.B. 682 10 09-30 07/92 23.62 64
FFEC First Fed. Bancshares of WI OTC Northwest WI Thrift 672 18 12-31 10/94 14.75 101
LBCI Liberty Bancorp of Chicago IL OTC Chicago IL Thrift 670 4 12-31 12/91 24.50 61
NASB North American SB of MO OTC KS,MO M.B. 664 8 09-30 09/85 29.75 68
GSBC Great Southern Bancorp of MO OTC Southwest MO Div. 659 25 06-30 12/89 27.00 120
FFDP FirstFed Bancshares of IL OTC Chicago IL Thrift 624 3 12-31 07/92 16.37 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 12.62 51
HFFC HF Financial Corp. of SD OTC South Dakota Thrift 574 18 06-30 04/92 15.25 47
FFYF FFY Financial Corp. of OH OTC Youngstown OH Thrift 573 9 06-30 06/93 23.75 123
FNGB First Northern Cap. Corp of WI OTC Northeast WI Thrift 572 20 12-31 12/83 15.25 69
HMNF HMN Financial, Inc. of MN OTC Southeast MN Thrift 542 7 12-31 06/94 15.50 80
FDEF First Defiance Fin.Corp. of OH OTC Northwest OH Thrift 528 9 06-30 10/95 10.12 111
SSBK Strongsville SB of OH OTC Cleveland OH Thrift 505 12 12-31 / 21.00 53
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 13.12 68
SFSL Security First Corp. of OH OTC Northeastern OH R.E. 470 10 03-31 01/88 13.50 48
FFSX First FS&LA. MHC of IA (45.0) OTC Western IA Thrift 437 12 06-30 06/92 24.75 42
FBCI Fidelity Bancorp of Chicago IL OTC Chicago IL Thrift 433 5 09-30 12/93 15.75 49
PERM Permanent Bancorp of IN OTC Southwest IN Thrift 396 11 03-31 04/94 15.75 34
ASBI Ameriana Bancorp of IN OTC Eastern IN,OH Thrift 383 8 12-31 02/87 13.31 44
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 14.50 23
KNK Kankakee Bancorp of IL AMEX Illinois Thrift 363 10 03-31 12/92 18.87 27
SFSB SuburbFed Fin. Corp. of IL OTC IL,IN Thrift 362 12 12-31 02/92 16.75 21
FFKY First Fed. Fin. Corp. of KY OTC Central KY Thrift 351 7 06-30 07/87 20.00 84
</TABLE>
<PAGE>
RP FINANCIAL, LC.
------------------------------------------
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
July 19, 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)
Mid-West Companies (continued)
------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SWBI Southwest Bancshares of IL OTC Chicago IL Thrift 350 5 12-31 06/92 27.00 48
CAFI Camco Fin. Corp. of OH OTC Eastern OH M.B. 344 7 12-31 / 19.25 40
HMCI Homecorp, Inc. of Rockford IL OTC Northern IL Thrift 342 9 12-31 06/90 17.12 19
HVFD Haverfield Corp. of OH OTC Cleveland OH Thrift 340 11 12-31 03/85 18.00 34
HALL Hallmark Capital Corp. of WI OTC Milwaukee WI Thrift 339 3 06-30 01/94 14.75 21
INBI Industrial Bancorp of OH OTC Northern OH Thrift 327 10 12-31 08/95 10.75 60
FFHH FSF Financial Corp. of MN OTC Southern MN Thrift 327 11 09-30 10/94 11.62 45
WOFC Western Ohio Fin. Corp. of OH OTC Western OH Thrift 320 5 12-31 07/94 20.00 46
PVFC PVF Capital Corp. of OH OTC Cleveland OH R.E. 318 7 06-30 12/92 18.00 28
HBFW Home Bancorp of Fort Wayne IN OTC Northeast IN Thrift 313 8 09-30 03/95 15.31 47
CASH First Midwest Fin. Corp. of IA OTC IA,SD R.E. 310 8 09-30 09/93 21.75 39
WCBI WestCo Bancorp of IL OTC Chicago IL Thrift 309 1 12-31 06/92 21.00 56
CBSB Charter Financial Inc. of IL OTC Southern IL Thrift 301 6 09-30 12/95 11.00 55
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 18.00 37
FMBD First Mutual Bancorp of IL OTC Central IL Thrift 285 7 12-31 07/95 12.00 52
PFDC Peoples Bancorp of Auburn IN OTC Northeastern IN Thrift 281 6 09-30 07/87 19.50 46
FFED Fidelity Fed. Bancorp of IN OTC Southwestern IN Thrift 280 4 06-30 08/87 11.25 28
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 27.00 18
SMFC Sho-Me Fin. Corp. of MO OTC Southwest MO Thrift 264 6 12-31 06/94 16.00 29
WFCO Winton Financial Corp. of OH OTC Cincinnati OH R.E. 262 4 09-30 08/88 13.75 27
FCBF FCB Fin. Corp. of Neenah WI OTC Eastern WI Thrift 256 6 03-31 09/93 17.25 43
OSBF OSB Fin. Corp. of Oshkosh WI OTC Eastern WI Thrift 254 7 12-31 06/92 23.00 26
CBK Citizens First Fin.Corp. of IL AMEX Central IL Thrift 252 P 6 12-31 05/96 9.94 28
FFOH Fidelity Financial of OH OTC Cincinnati OH Thrift 249 4 12-31 03/96 9.81 40
WAYN Wayne S&L Co., MHC of OH(46.7) OTC Central OH Thrift 249 6 03-31 06/93 20.00 30
DFIN Damen Fin. Corp. of Chicago IL OTC Chicago IL Thrift 235 4 11-30 10/95 11.50 46
CRCL Circle Financial Corp.of OH OTC Cincinnati OH Thrift 229 8 06-30 08/91 35.00 25
CBIN Community Bank Shares of IN OTC Southeast IN Thrift 224 6 12-31 04/95 12.00 24
FFHS First Franklin Corp. of OH OTC Cincinnati OH Thrift 216 7 12-31 01/88 15.50 18
WCHI Workingmens Cap. Hldgs of IN OTC South Central IN Thrift 214 2 12-31 06/90 20.62 37
</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
July 15, 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)
Mid-West Companies (continued)
- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EFBI Enterprise Fed. Bancorp of OH OTC Cincinnati, OH Thrift 208 D 5 09-30 10/94 14.00 29
OHSL OHSL Financial Corp. of OH OTC Cincinnati, OH Thrift 205 4 12-31 02/93 19.50 24
CBCO CB Bancorp of Michigan City IN OTC Northwest IN Thrift 205 3 03-31 12/92 17.00 20
CAPS Capital Savings Bancorp of MO OTC Central MO Thrift 203 7 06-30 12/93 18.12 19
MFBC MFB Corp. of Mishawaka IN OTC Northern IN Thrift 201 4 09-30 03/94 14.00 28
SBCN Suburban Bancorp. of OH OTC Cincinnati OH Thrift 197 8 06-30 09/93 15.00 22
WEFC Wells Fin. Corp. of Wells MN OTC Southcentral MN Thrift 196 7 12-31 04/95 11.37 25
MBLF MBLA Financial Corp. of MO OTC Northeast MO Thrift 195 2 06-30 06/93 22.50 31
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 10.62 43
GFED Guaranty FS&LA, MHC of MO(31.1) OTC Southwest MO Thrift 186 4 06-30 04/95 11.25 35
PULB Pulaski SB, MHC of MO (29.0) OTC St. Louis MO Thrift 179 5 09-30 05/94 13.25 28
MARN Marion Capital Holdings of IN OTC Central IN Thrift 179 2 06-30 03/93 21.00 42
MWFD Midwest Fed. Fin. Corp of WI OTC Central WI Thrift 178 9 12-31 07/92 15.75 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 13.50 38
MFFC Milton Fed. Fin. Corp. of OH OTC Southwest OH Thrift 172 2 09-30 10/94 12.50 29
EGLB Eagle BancGroup of IL OTC Thrift 163 P 0 12-31 07/96 11.00 14
LSBI LSB Bancorp of Lafayette IN OTC Central IN Thrift 163 3 12-31 02/95 15.00 14
SMBC Southern Missouri Bncrp of MO OTC Southeast MO Thrift 162 8 06-30 04/94 14.12 24
THIR Third Financial Corp. of OH OTC Piqua OH Thrift 156 4 09-30 03/93 32.00 36
SJSB SJS Bancorp of St. Joseph MI OTC Southwest MI Thrift 151 4 06-30 02/95 20.70 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 15.25 27
JXSB Jcksnville SB, MHC of IL(43.3%) OTC Central IL Thrift 142 4 12-31 04/95 13.00 16
NEIB Northeast Indiana Bncrp of IN OTC Northeast IN Thrift 141 3 12-31 06/95 12.12 25
FBSI First Bancshares of MO OTC Southcentral MO Thrift 140 5 06-30 12/93 15.63 20
FFWD Wood Bancorp of OH OTC Northern OH Thrift 140 6 06-30 08/93 19.75 20
BWFC Bank West Fin. Corp. of MI OTC Southeast MI Thrift 139 2 06-30 03/95 11.50 26
FKKY Frankfort First Bancorp of KY OTC Frankfort KY Thrift 139 3 06-30 07/95 12.25 42
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
GTPS Great American Bancorp of IL OTC East Central IL Thrift 121 3 09-30 06/95 13.25 25
</TABLE>
<PAGE>
RP FINANCIAL, LC.
------------------------------------------
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
July 15, 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)
Mid-West Companies (continued)
------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MIFC Mid Iowa Financial Corp. of IA OTC Central IA Thrift 119 6 09-30 10/92 6.37 11
NBSI North Bancshares of Chicago IL OTC Chicago IL Thrift 114 2 06-30 12/93 15.25 18
PTRS The Potters S&L Co. of OH OTC Northeast OH Thrift 114 5 12-31 12/93 16.12 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 16.75 37
FFSL First Independence Corp. of KS OTC Southeast KS Thrift 102 1 09-30 10/93 17.75 10
CNSB CNS Bancorp of MO OTC Central MO Thrift 101 P 5 12-31 06/96 11.50 19
BDJI First Fed. Bancorp. of MN OTC Northern MN Thrift 101 5 09-30 04/95 12.25 10
WCFB Webster City FSB,MHC of IA (45.2 OTC Central IA Thrift 97 1 12-31 08/94 12.75 27
INCB Indiana Comm. Bank, SB of IN OTC Central IN Ret. 94 3 06-30 12/94 13.87 13
FSBS First Ashland Fin. Corp. of KY OTC Northeast KY Thrift 90 D 3 09-30 04/95 18.25 27
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 16.37 26
NWEQ Northwest Equity Corp. of WI OTC Northwest WI Thrift 86 3 03-31 10/94 10.50 10
CIBI Community Inv. Corp. of OH OTC NorthCentral OH Thrift 85 D 3 06-30 02/95 15.00 11
KYF Kentucky First Bancorp of KY AMEX Central KY Thrift 84 2 06-30 08/95 15.00 21
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 13.12 11
GFSB GFS Bancorp of Grinnell IA OTC Central IA Thrift 81 1 06-30 01/94 20.25 10
AMFC AMB Financial Corp. of IN OTC Northwest IN Thrift 81 4 12-31 04/96 10.25 12
PCBC Perry Co. Fin. Corp. of MO OTC EastCentral MO Thrift 77 D 1 09-30 02/95 16.25 14
LOGN Logansport Fin. Corp. of IN OTC Northern IN Thrift 76 1 12-31 06/95 13.50 18
SOBI Sobieski Bancorp of S. Bend IN OTC Northern IN Thrift 76 3 06-30 03/95 12.12 10
SFFC StateFed Financial Corp. of IA OTC Des Moines IA Thrift 74 2 06-30 01/94 15.75 13
FFDF FFD Financial Corp. of OH OTC Northeast OH Thrift 73 P 1 06-30 04/96 10.25 15
ATSB AmTrust Capital Corp. of IN OTC Northcentral IN Thrift 73 3 06-30 03/95 8.56 5
GWBC Gateway Bancorp of KY OTC Eastern KY Thrift 73 2 06-30 01/95 13.75 16
HZFS Horizon Fin'l. Services of IA OTC Central IA Thrift 72 3 06-30 06/94 14.75 7
HHFC Harvest Home Fin. Corp. of OH OTC Southwest OH Thrift 70 D 3 09-30 10/94 12.50 11
MIVI Miss. View Hold. Co. of MN OTC Central MN Thrift 70 1 09-30 03/95 10.75 10
CLAS Classic Bancshares of KY OTC Eastern KY Thrift 68 D 1 03-31 12/95 10.69 14
LXMO Lexington B&L Fin. Corp. of MO OTC West Central MO Thrift 61 P 1 09-30 06/96 9.87 12
NSLB NS&L Bancorp of Neosho MO OTC Southwest MO Thrift 59 2 09-30 06/95 12.56 11
</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
July 15, 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)
Mid-West Companies (continued)
------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CKFB CKF Bancorp of Danville KY OTC Central KY Thrift 59 1 12-31 01/95 19.50 18
MSBF MSB Financial Corp. of MI OTC Southcentral MI Thrift 56 2 06-30 02/95 17.25 12
MFSB Mutual Bancompany of MO OTC Central MO Thrift 53 1 06-30 02/95 21.00 7
RELI Reliance Bancshares Inc of WI (3) OTC Milwaukee WI Thrift 50 P 1 June 04/96 8.37 21
SHFC Seven Hills Fin. Corp. of OH OTC Cincinnati OH Thrift 46 3 06-30 12/93 18.12 10
FLKY First Lancaster Bncshrs of KY OTC Thrift 43 P 0 06-30 07/96 13.62 13
HBBI Home Building Bancorp of IN OTC Southwest IN Thrift 42 2 09-30 02/95 20.25 7
CSBF CSB Financial Group Inc of IL OTC Centralia IL Thrift 41 1 09-30 10/95 9.25 10
HWEN Home Financial Bancorp of IN OTC Thrift 38 P 0 06-30 07/96 10.12 5
LONF London Financial Corp. of OH OTC Central OH Thrift 38 1 09-30 04/96 10.25 5
JOAC Joachim Bancorp of MO OTC Eastern MO Thrift 37 1 03-31 12/95 12.44 9
</TABLE>
<TABLE>
New England Companies
---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PBCT Peoples Bank, MHC of CT(32.3) (3) OTC Southwestern CT Div. 6,916 79 12-31 07/88 21.12 827
WBST Webster Financial Corp. of CT OTC Central CT Thrift 3,813 39 12-31 12/86 29.00 235
CFCX Center Fin. Corp of CT (3) OTC Western CT M.B. 3,670 36 12-31 08/86 24.25 351
PHBK Peoples Heritage Fin Grp of ME (3) OTC ME,NH Div. 3,302 76 12-31 12/86 19.50 332
EGFC Eagle Financial Corp. of CT OTC Western CT Thrift 1,429 23 09-30 02/87 24.75 111
DSBC DS Bancor Inc. of Derby CT (3) OTC Southwestern CT Thrift 1,248 22 12-31 12/85 34.50 105
ANDB Andover Bancorp, Inc. of MA (3) OTC Northeastern MA M.B. 1,142 10 12-31 05/86 24.75 105
SISB SIS Bank of Springfield MA (3) OTC Central MA Div. 1,135 20 12-31 02/95 17.62 101
WLDN Walden Bancorp of MA (3) OTC Eastern MA M.B. 1,019 16 04-30 12/85 20.00 106
MDBK Medford Savings Bank of MA (3) OTC Eastern MA Thrift 981 16 12-31 03/86 21.50 97
CFX Cheshire Fin. Corp. of NH (3) AMEX S.W. NH,MA M.B. 958 23 12-31 02/87 13.00 98
AFCB Affiliated Comm BC, Inc of MA OTC MA Thrift 938 13 12-31 / 16.75 85
FFES First FS&LA of E. Hartford CT OTC Central CT Thrift 933 12 12-31 06/87 17.50 45
FMLY Family Bancorp of Haverhill MA (3) OTC MA, NH Div. 887 21 12-31 11/86 23.87 98
MASB MassBank Corp. of Reading MA (3) OTC Eastern MA Thrift 859 14 12-31 05/86 32.75 90
EBCP Eastern Bancorp of NH OTC VT, NH M.B. 825 23 09-30 11/83 16.00 58
FESX First Essex Bancorp of MA (3) OTC MA, NH Div. 801 10 12-31 08/87 10.25 62
MECH Mechanics SB of Hartford CT (3) *** Thrift 721 P 0 12-31 06/96 11.25 60
</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
July 15, 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)
New England Companies (continued)
- ----------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NSSB Norwich Financial Corp. of CT (3) OTC Southeastern CT Thrift 712 15 12-31 11/86 14.50 81
BFD BostonFed Bancorp of MA AMEX Boston MA M.B. 678 8 12-31 10/95 11.87 78
DIBK Dime Financial Corp. of CT (3) OTC Central CT Thrift 671 10 12-31 07/86 15.00 75
GROV GroveBank for Savings of MA (3) OTC Eastern MA Thrift 586 7 12-31 08/86 29.50 45
NSSY Norwalk Savings Society of CT (3) OTC Southwest CT Thrift 542 8 12-31 06/94 21.75 52
FMCT Farmers & Mechanics Bank of CT (3) OTC Central CT Thrift 537 12 12-31 11/93 30.25 50
PBKB People's SB of Brockton MA (3) OTC Southeastern MA Thrift 533 9 12-31 10/86 9.50 32
BKC American Bank of Waterbury CT (3) AMEX Western CT Thrift 517 15 12-31 12/81 25.37 58
CBNH Community Bankshares Inc of NH (3) OTC Southcentral NH M.B. 517 5 06-30 05/86 18.50 45
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 15.94 30
MWBX Metro West of MA (3) OTC Eastern MA Thrift 478 9 12-31 10/86 3.75 52
SWCB Sandwich Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 424 11 04-30 07/86 20.25 38
PBNB Peoples Sav. Fin. Corp. of CT (3) OTC Central CT Thrift 406 8 12-31 08/86 21.75 42
BKCT Bancorp Connecticut of CT (3) OTC Central CT Thrift 403 3 12-31 07/86 22.75 62
PETE Primary Bank of NH (3) OTC Southern NH Ret. 393 8 12-31 10/93 12.12 24
MIDC Midconn Bank of Kensington CT (3) OTC Central CT Thrift 365 10 09-30 09/86 18.37 35
HSBK Hibernia SB of Quincy MA (3) OTC Eastern MA R.E. 355 5 12-31 09/86 14.12 22
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 5.34 23
CEBK Central Co-Op. Bank of MA (3) OTC Eastern MA Thrift 318 D 11 04-30 10/86 17.75 34
NMSB Newmil Bancorp. of CT (3) OTC Eastern CT Thrift 292 12 06-30 02/86 6.81 28
POBS Portsmouth Bank Shrs Inc of NH (3) OTC Southeastern NH Thrift 267 3 12-31 02/88 13.00 75
NHTB NH Thrift Bancshares of NH OTC Central NH Thrift 252 10 12-31 05/86 9.87 17
NEBC Northeast Bancorp of ME (3) OTC Eastern ME Thrift 218 8 06-30 08/87 13.50 16
TBK Tolland Bank of CT (3) AMEX Northern CT Thrift 217 7 12-31 12/86 9.75 11
HIFS Hingham Inst. for Sav. of MA (3) OTC Eastern MA Thrift 179 4 12-31 12/88 14.00 18
BSBC Branford SB of CT (3) OTC New Haven CT R.E. 174 5 12-31 11/86 3.00 20
HPBC Home Port Bancorp, Inc. of MA (3) OTC Southeastern MA Thrift 167 2 12-31 08/88 13.50 25
IPSW Ipswich SB of Ipswich MA (3) OTC Northwest MA Thrift 134 4 12-31 05/93 11.87 14
KSBK KSB Bancorp of Kingfield ME (3) OTC Western ME M.B. 127 10 12-31 06/93 22.50 8
MFLR Mayflower Co-Op. Bank of MA (3) OTC Southeastern MA Thrift 113 4 04-30 12/87 14.00 12
FCB Falmouth Co-Op Bank of MA (3) AMEX Southeast MA Thrift 88 2 09-30 03/96 10.50 15
</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
July 15, 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)
New England Companies (continued)
---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NTMG Nutmeg FS&LA of CT OTC CT M.B. 85 3 12-31 / 7.25 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 16.50 4
</TABLE>
<TABLE>
North-West Companies
--------------------
<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 29.62 2,133
WFSL Washington FS&LA of Seattle WA OTC Western US Thrift 4,929 87 09-30 11/82 21.12 892
STSA Sterling Financial Corp. of WA OTC WA, OR M.B. 1,498 41 06-30 / 13.75 75
IWBK Interwest SB of Oak Harbor WA OTC Western WA Div. 1,369 28 12-31 / 24.75 159
MSEA Metropolitan Bancorp of WA OTC Western WA R.E. 778 10 03-31 01/90 16.94 63
KFBI Klamath First Bancorp of OR OTC Southern OR Thrift 605 7 09-30 10/95 14.12 159
FWWB First Savings Bancorp of WA (3) OTC Central WA Thrift 595 D 15 03-31 11/95 14.50 146
HRZB Horizon Financial Corp. of WA (3) OTC Northwest WA Thrift 489 12 03-31 08/86 12.50 82
FMSB First Mutual SB of Bellevue WA (3) OTC Western WA M.B. 371 6 12-31 12/85 12.25 30
CASB Cascade SB of Everett WA OTC Seattle WA Thrift 326 6 06-30 08/92 16.50 34
RVSB Rvrview SB, FSB MHC of WA (40.3) OTC Southwest WA M.B. 210 9 03-31 10/93 14.37 31
</TABLE>
<TABLE>
South-East Companies
--------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LFCT Leader Fin. Corp of Memphis TN OTC Tennessee M.B. 3,178 22 12-31 09/93 43.50 432
FFCH First Fin. Holdings Inc. of SC OTC CHARLESTON SC Div. 1,449 32 09-30 11/83 19.00 121
AMFB American Federal Bank of SC OTC Northwest SC Thrift 1,339 41 12/31 01/89 15.87 173
MGNL Magna Bancorp of MS OTC MS, AL M.B. 1,291 61 06-30 03/91 35.00 244
LIFB Life Bancorp of Norfolk VA OTC Southeast VA Thrift 1,205 17 12-31 10/94 14.25 148
FLFC First Liberty Fin. Corp. of GA OTC Georgia M.B. 982 29 9-30 12/83 21.00 84
HFNC HFNC Financial Corp. of NC OTC Charlotte NC Thrift 716 9 06-30 12/95 16.00 275
VFFC Virginia First Savings of VA OTC Petersburg VA M.B. 714 23 06-30 01/78 11.37 64
CNIT Cenit Bancorp of Norfolk VA OTC Southeastern VA Thrift 667 15 12-31 08/92 32.50 52
VABF Va. Beach Fed. Fin. Corp of VA OTC Southeast VA M.B. 625 11 12-31 11/80 7.00 35
ISBF ISB Financial Corp. of LA OTC SouthCentral LA Thrift 624 14 12-31 04/95 13.81 102
</TABLE>
<PAGE>
RP FINANCIAL, LC.
------------------------------------------
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit III-1
Characteristics of Publicly-Traded Thrifts
July 15, 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)
South-East Companies (continued)
--------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PALM Palfed, Inc. of Aiken SC OTC Southwest SC Thrift 624 16 12-31 12/85 12.12 63
EBSI Eagle Bancshares of Tucker GA OTC Atlanta GA Thrift 558 D 10 03-31 04/86 14.75 46
FFFC FFVA Financial Corp. of VA OTC Southern VA Thrift 518 11 12-31 10/94 17.00 92
CFCP Coastal Fin. Corp. of SC OTC SC Thrift 441 8 09-30 09/90 22.00 60
FSFC First So.east Fin. Corp. of SC OTC Northwest SC Thrift 359 11 06-30 10/93 9.62 39
TSH Teche Holding Company of LA AMEX Southern LA Thrift 346 8 09-30 04/95 12.87 53
FFRV Fid. Fin. Bkshrs. Corp. of VA OTC Southern VA Thrift 322 7 12-31 05/86 12.75 29
ESX Essex Bancorp of VA AMEX VA, NC M.B. 316 14 12-31 / 2.62 3
COOP Cooperative Bk.for Svgs. of NC OTC Eastern NC Thrift 314 16 03-31 08/91 16.50 25
JEBC Jefferson Bancorp of Gretna LA OTC Southeast LA Thrift 265 6 12-31 08/94 22.00 48
SOPN First SB, SSB, Moore Co. of NC OTC Central NC Thrift 256 5 06-30 01/94 18.00 67
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 / 31.25 24
FLAG Flag Financial Corp of GA OTC Western GA M.B. 226 3 12-31 12/86 11.50 23
CFTP Community Fed. Bancorp of MS OTC Northeast MS Thrift 201 1 09-30 03/96 13.00 60
GSFC Green Street Fin. Corp. of NC OTC Southern NC Thrift 188 P 3 09-30 04/96 13.00 56
PLE Pinnacle Bank of AL AMEX Central AL Thrift 186 5 06-30 12/86 16.62 15
FTF Texarkana Fst. Fin. Corp of AR AMEX Southwest AR Thrift 163 5 09-30 07/95 16.00 32
NFSL Newnan SB, FSB of Newnan GA OTC Western GA M.B. 161 D 8 03-31 03/86 19.75 29
CFFC Community Fin. Corp. of VA OTC Central VA Thrift 160 3 03-31 03/88 19.50 25
FGHC First Georgia Hold. Corp of GA OTC Southeastern GA Thrift 142 6 09-30 02/87 6.50 13
PDB Piedmont Bancorp of NC AMEX Central NC Thrift 125 2 06-30 12/95 12.62 33
FFBS FFBS Bancorp of Columbus MS OTC Columbus MS Thrift 124 3 06-30 06/93 22.50 35
VAFD Valley FSB of Sheffield AL OTC Northern AL Thrift 119 4 09-30 10/87 31.00 11
BFSB Bedford Bancshares of VA OTC Southern VA Thrift 118 3 09-30 08/94 16.50 20
SSM Stone Street Bancorp of NC AMEX Central NC Thrift 116 2 12-31 04/96 16.62 30
SRN Southern Banc Company of AL AMEX Northeast AL Thrift 111 D 4 06-30 10/95 12.62 18
GSLC Guaranty Svgs & Loan FA of VA OTC Charltsvl VA M.B. 103 3 06-30 / 7.75 7
TWIN Twin City Bancorp of TN OTC Northeast TN Thrift 102 3 12-31 01/95 16.25 15
KSAV KS Bancorp of Kenly NC OTC Central NC Thrift 90 3 12-31 12/93 20.00 13
SZB SouthFirst Bancshares of AL AMEX Central AL Thrift 89 2 09-30 02/95 12.50 11
CZF Citisave Fin. Corp. of LA AMEX Baton Rouge LA Thrift 80 5 12-31 07/95 14.50 14
CCFH CCF Holding Company of GA OTC Atlanta GA Thrift 79 3 09-30 07/95 11.87 13
</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
July 15, 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)
South-East Companies (continued)
--------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 16.00 12
</TABLE>
<TABLE>
South-West Companies
--------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CBSA Coastal Bancorp of Houston TX OTC Houston TX M.B. 2,807 40 12-31 / 18.50 92
FBHC Fort Bend Holding Corp. of TX OTC Eastcentral TX M.B. 244 4 03-31 06/93 17.25 14
JXVL Jacksonville Bancorp of TX OTC East Central TX Thrift 213 6 09-30 04/96 10.12 27
LBFI L&B Financial of S. Springs TX OTC Northeast TX Thrift 143 5 06-30 09/94 16.37 26
LOAN Horizon Bancorp, Inc of TX (3) OTC Austin TX R.E. 127 D 7 04-30 / 9.75 14
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 14.50 17
GUPB GFSB Bancorp of Gallup NM OTC Northwest NM Thrift 70 1 06-30 06/95 13.56 13
</TABLE>
<TABLE>
Western Companies (Excl CA)
---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FFBA First Colorado Bancorp of Co OTC Denver CO Thrift 1,493 25 12-31 01/96 13.62 277
WSTR WesterFed Fin. Corp. of MT OTC MT Thrift 588 18 06-30 01/94 14.50 64
GBCI Glacier Bancorp of MT OTC Western MT Div. 398 13 06-30 03/84 21.25 71
SFBM Security Bancorp of MT OTC Southcentral MT Thrift 360 16 06-30 11/86 20.87 31
UBMT United SB, FA of MT OTC Central MT Thrift 105 4 12-31 09/86 18.00 22
TRIC Tri-County Bancorp of WY OTC Southeastern WY Thrift 73 2 12-31 09/93 18.00 11
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 10.12 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.
<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
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>
SAIF-Insured Thrifts 19.4 64.4 12.9 73.8 11.8 0.1 12.8 0.2 12.6 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 21.3 63.8 12.5 75.4 5.4 0.0 18.2 0.0 18.2 0.0
Mid-West Companies 21.3 63.8 12.5 75.4 5.4 0.0 18.2 0.0 18.2 0.0
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CNSB CNS Bancorp of MO(3) 19.4 60.9 15.6 88.4 0.0 0.0 10.7 0.0 10.7 0.0
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
- ----------------------------------------------------------------------------------------------------------------------------
HFSA Hardin Bancorp of Hardin MO 14.4 54.0 29.0 79.9 0.0 0.0 19.2 0.0 19.2 0.0
- ----------------------------------------------------------------------------------------------------------------------------
JOAC Joachim Bancorp of MO 35.4 62.4 0.3 69.7 0.0 0.0 29.2 0.0 29.2 0.0
LXMO Lexington B&L Fin. Corp. of MO(3) 13.6 80.2 4.6 84.2 0.0 0.0 14.7 0.0 14.7 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
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<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>
SAIF-Insured Thrifts 11.74 10.64 9.55 6.71 -0.87 6.69 6.20 10.46 10.52 22.82
State of MO 11.05 6.33 12.01 7.16 -39.31 8.38 6.94 12.47 12.49 28.96
Comparable Group Average 11.60 8.63 12.76 2.79 -45.10 1.19 1.20 14.42 14.42 34.95
Mid-West Companies 11.60 8.63 12.76 2.79 -45.10 1.19 1.20 14.42 14.42 34.95
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CNSB CNS Bancorp of MO(3) -0.43 -5.35 1.92 -0.91 NM 4.50 4.50 11.26 11.26 27.08
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
- ----------------------------------------------------------------------------------------------------------------------------
HFSA Hardin Bancorp of Hardin MO 9.73 -5.87 12.21 -1.25 -100.00 NM NM 13.81 13.81 32.30
- ----------------------------------------------------------------------------------------------------------------------------
JOAC Joachim Bancorp of MO 22.55 92.84 3.62 0.66 NM NM NM 21.50 21.50 44.10
LXMO Lexington B&L Fin. Corp. of M 3.56 39.84 -0.41 2.18 NM 9.38 9.38 14.38 14.38 29.20
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
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Financial information is for the quarter ending December 31, 1995.
(3) Growth rates have been annualized from available financial information.
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.
1
<PAGE>
RP FINANCIAL, L.C.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit III-2
Income as a Percent of Average Assets and Yields, Costs, Spreads
Comparable Institution Analysis
For the Twelve Months Ended March 31, 1996
<TABLE>
<CAPTION>
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>
SAIF-Insured Thrifts 0.85 7.31 4.18 3.13 0.10 3.03 0.12 -0.01 0.30 0.41
State of MO 0.92 7.08 4.17 2.91 0.04 2.87 0.04 0.02 0.39 0.45
Comparable Group Average 0.86 6.80 3.90 2.89 0.05 2.85 0.03 0.01 0.37 0.41
Mid-West Companies 0.86 6.80 3.90 2.89 0.05 2.85 0.03 0.01 0.37 0.41
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CNSB CNS Bancorp of MO 0.37 5.70 3.72 1.99 0.06 1.93 0.00 0.00 0.46 0.46
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
- -----------------------------------------------------------------------------------------------------------------------
HFSA Hardin Bancorp of Hardin MO 0.64 6.95 4.32 2.63 0.02 2.61 0.07 0.00 0.28 0.35
- -----------------------------------------------------------------------------------------------------------------------
JOAC Joachim Bancorp of MO 0.63 7.13 3.52 3.61 0.04 3.58 0.05 -0.01 0.14 0.17
LXMO Lexington B&L Fin. Corp. of MO 0.81 4.85 3.71 1.15 0.05 1.10 0.00 0.00 1.59 1.59
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
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<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>
SAIF-Insured Thrifts 2.20 0.02 0.09 0.00 7.53 4.82 2.72 4,042 36.29
State of MO 1.97 0.01 0.06 0.00 7.43 5.03 2.40 3,911 36.07
Comparable Group Average 1.98 0.00 0.02 0.00 7.20 4.93 2.27 3,956 35.69
Mid-West Companies 1.98 0.00 0.02 0.00 7.20 4.93 2.27 3,956 35.69
Comparable Group
- ----------------
Mid-West Companies
- ------------------
CNSB CNS Bancorp of MO 1.86 0.00 0.00 0.00 6.98 4.89 2.08 3,216 31.95
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
- ----------------------------------------------------------------------------------------------------------------------------------
HFSA Hardin Bancorp of Hardin MO 1.98 0.00 0.00 0.00 7.08 5.15 1.93 4,389 35.07
- ----------------------------------------------------------------------------------------------------------------------------------
JOAC Joachim Bancorp of MO 2.82 0.00 0.00 0.00 7.32 4.51 2.82 2,452 32.25
LXMO Lexington B&L Fin. Corp. of MO 1.53 0.00 0.00 0.00 6.04 5.35 0.69 5,074 46.29
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
- ----------------------------------------------------------------------------------------------------------------------------------
</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
Exhibit III-2
Market Pricing Comparatives
Prices As of July 12, 1996
<TABLE>
<CAPTION>
Per Share Data
Market ---------------
Capitalization Pricing Ratios(3)
--------------- Book ---------------------------------------
Price/ Market 12-Mth Value/
Financial Institution Share(1) Value EPS(2) Share P/E P/B P/A P/TB P/CORE
-------------------- -------- ------ ------ ------ ----- ------ ------ ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
SAIF-Insured Thrifts 16.80 115.39 1.23 16.52 14.10 102.41 12.87 105.61 15.01
State of MO 16.17 73.40 1.12 15.60 16.15 105.19 15.80 107.94 16.11
Comparable Group Average 13.79 19.05 0.79 16.32 17.43 84.14 17.17 84.16 17.83
Mid-West Companies 13.79 19.05 0.79 16.32 17.43 84.14 17.17 84.16 17.83
Comparable Group
----------------
Mid-West Companies
------------------
CNSB CNS Bancorp of MO 11.50 19.01 0.45 14.07 NM 81.73 18.86 81.73 NM
CMRN Cameron Fin. Corp. of MO 13.50 38.48 0.97 16.06 13.92 84.06 22.31 84.06 14.06
CAPS Capital Savings Bancorp of MO 18.12 18.83 1.75 20.34 10.35 89.09 9.29 89.09 10.35
FBSI First Bancshares of MO 15.63 20.35 0.80 18.26 19.54 85.60 14.49 85.78 19.78
HFSA Hardin Bancorp of Hardin MO 11.75 12.43 0.48 15.16 24.48 77.51 14.91 77.51 24.48
JOAC Joachim Bancorp of MO 12.44 9.45 0.28 14.15 NM 87.92 25.71 87.92 NM
LXMO Lexington B&L Fin. Corp. of MO 9.87 12.49 0.62 14.27 15.92 69.17 20.35 69.17 16.18
NSLB NS&L Bancorp of Neosho MO 12.56 11.15 0.59 15.62 21.29 80.41 18.89 80.41 22.84
PCBC Perry Co. Fin. Corp. of MO 16.25 13.91 0.88 18.84 18.47 86.25 17.99 86.25 18.47
SMFC Sho-Me Fin. Corp. of MO 16.00 29.14 1.08 17.36 14.81 92.17 11.04 92.17 14.95
SMBC Southern Missouri Bncrp of MO 14.12 24.34 0.78 15.41 18.10 91.63 15.03 91.63 19.34
Dividends(4) Financial Characteristics(6)
----------------------- -------------------------------------------------------
Amount/ Payout Total Equity/ NPAs/ Reported Core
---------------- ---------------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
-------------------- ------- ----- -------- ------ ------ ------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
SAIF-Insured Thrifts 0.35 2.04 26.13 1,293 13.30 0.96 0.86 7.97 0.80 7.21
State of MO 0.40 2.56 23.72 784 16.72 0.75 0.97 7.45 0.92 7.32
Comparable Group Average 0.28 2.01 21.58 124 20.69 0.46 0.93 4.98 0.91 4.85
Mid-West Companies 0.28 2.01 21.58 124 20.69 0.46 0.93 4.98 0.91 4.85
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 1.99 20.57 203 10.43 0.20 0.95 8.92 0.95 8.92
FBSI First Bancshares of MO 0.20 1.28 25.00 140 16.92 0.43 0.78 4.33 0.77 4.27
HFSA Hardin Bancorp of Hardin MO 0.40 3.40 NM 83 19.24 0.11 0.64 4.18 0.64 4.18
JOAC Joachim Bancorp of MO 0.50 4.02 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
NSLB NS&L Bancorp of Neosho MO 0.50 3.98 NM 59 23.49 0.18 0.93 4.27 0.87 3.98
PCBC Perry Co. Fin. Corp. of MO 0.30 1.85 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 3.54 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
<TABLE>
<CAPTION>
Exhibit III-3
Balance Sheet Composition and Growth Rates
Comparable Institution Analysis
As of March 31, 1996
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>
SAIF-Insured Thrifts 19.4 64.4 12.9 73.8 11.8 0.1 12.8 0.2 12.6 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 24.6 61.0 11.2 62.7 15.7 0.0 20.4 0.0 20.4 0.0
Mid-West Companies 24.6 61.0 11.2 62.7 15.7 0.0 20.4 0.0 20.4 0.0
Comparable Group
- ----------------
Mid-West Companies
- ------------------
KYF Kentucky First Bancorp of KY 22.0 49.7 25.6 60.9 14.8 0.0 23.6 0.0 23.6 0.0
- ----------------------------------------------------------------------------------------------------------------------------
NBSI North Bancshares of Chicago IL 39.2 50.9 7.8 65.6 14.6 0.0 17.3 0.0 17.3 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
------------------------------------------------------------
Cash and Loans Borrows. Net Tng Net
Assets Investments & MBS Deposits &Subdebt Worth Worth
------ ----------- ------ -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 11.74 10.64 9.55 6.71 -0.87 6.69 6.20
State of MO 11.05 6.33 12.01 7.16 -39.31 8.38 6.94
Comparable Group Average 14.93 9.12 16.22 0.50 29.54 -1.11 -1.11
Mid-West Companies 14.93 9.12 16.22 0.50 29.54 -1.11 -1.11
Comparable Group
- ----------------
Mid-West Companies
- ------------------
KYF Kentucky First Bancorp of KY 33.27 27.35 36.54 -4.72 NM NM NM
- -------------------------------------------------------------------------------------------------
NBSI North Bancshares of Chicago IL 4.52 6.36 2.60 2.96 29.08 -6.02 -6.02
SFFC StateFed Financial Corp. of IA 7.00 -6.37 9.51 3.26 30.00 3.80 3.80
- -------------------------------------------------------------------------------------------------
<CAPTION>
Regulatory Capital
--------------------------
Tangible Core Reg.Cap.
-------- ------- ---------
<S> <C> <C> <C>
SAIF-Insured Thrifts 10.46 10.52 22.82
State of MO 12.47 12.49 28.96
Comparable Group Average 16.63 16.63 37.07
Mid-West Companies 16.63 16.63 37.07
Comparable Group
- ----------------
Mid-West Companies
- ------------------
KYF Kentucky First Bancorp of KY 20.59 20.59 42.77
- ---------------------------------------------------------------
NBSI North Bancshares of Chicago IL 15.38 15.38 44.11
SFFC StateFed Financial Corp. of IA 13.92 13.92 24.32
- ---------------------------------------------------------------
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 (@) 1995 by RP Financial, LC.
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- ---------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
<TABLE>
<CAPTION>
Exhibit III-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>
SAIF-Insured Thrifts 0.85 7.31 4.18 3.13 0.10 3.03 0.12 -0.01 0.30 0.41
State of MO 0.92 7.08 4.17 2.91 0.04 2.87 0.04 0.02 0.39 0.45
Comparable Group Average 0.95 7.28 3.93 3.36 0.03 3.33 0.00 0.10 0.14 0.24
Mid-West Companies 0.95 7.28 3.93 3.36 0.03 3.33 0.00 0.10 0.14 0.24
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>
SAIF-Insured Thrifts 2.20 0.02 0.09 0.00 7.53 4.82 2.72 4,042 36.29
State of MO 1.97 0.01 0.06 0.00 7.43 5.03 2.40 3,911 36.07
Comparable Group Average 2.17 0.00 0.02 0.00 7.54 5.01 2.54 4,009 32.81
Mid-West Companies 2.17 0.00 0.02 0.00 7.54 5.01 2.54 4,009 32.81
Net Interest Income Other Income
--------------------------- ------------------------------
Loss NII Total
Comparable Group 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>
Mid-West Companies
KYF Kentucky First Bancorp of KY 1.11 7.01 3.59 3.42 0.02 3.40 0.00 0.00 0.19 0.19
- -----------------------------------------------------------------------------------------------------------------------
NBSI North Bancshares of Chicago IL 0.57 6.98 3.85 3.13 0.03 3.10 0.00 0.00 0.14 0.14
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
- -----------------------------------------------------------------------------------------------------------------------
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>
Mid-West Companies
- ------------------
KYF Kentucky First Bancorp of KY 1.99 0.00 0.00 0.00 7.24 4.55 2.68 3,817 30.93
- --------------------------------------------------------------------------------------------------------------------------
NBSI North Bancshares of Chicago IL 2.47 0.00 0.07 0.00 7.11 4.93 2.18 3,573 32.58
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>
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
Exhibit III-3
Market Pricing Comparatives
Prices As of July 12, 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
--------------------- ------- ------- ------- ------- ------- ------- ------- ------- -------
($) ($Mil) ($) ($) (X) (%) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 16.80 115.39 1.23 16.52 14.10 102.41 12.87 105.61 15.01
State of MO 16.17 73.40 1.12 15.60 16.15 105.19 15.80 107.94 16.11
Comparable Group Average 15.33 17.22 0.71 16.44 15.29 94.01 19.30 94.01 15.29
Mid-West Companies 15.33 17.22 0.71 16.44 15.29 94.01 19.30 94.01 15.29
Comparable Group
----------------
Mid-West Companies
------------------
KYF Kentucky First Bancorp of KY 15.00 20.84 0.57 14.28 NM 105.04 24.81 105.04 NM
- --------------------------------------------------------------------------------------------------------------------
NBSI North Bancshares of Chicago IL 15.25 17.87 0.54 16.92 NM 90.13 15.63 90.13 NM
SFFC StateFed Financial Corp. of IA 15.75 12.96 1.03 18.13 15.29 86.87 17.47 86.87 15.29
- -------------------------------------------------------------------------------------------------------------------
Dividends(4) Financial Characteristics(6)
--------------------- ------------------------------------------------
Amount/ Payout Total Equity/ NPAs/ Reported Core
---------------- ------
Financial Institution Share Yield Ratio(5) Assets Assets Assets ROA ROE ROA ROE
--------------------- -------- ------ ------- ------ ------- ------- ------- ------- ------- ----
($) (%) (%) ($Mil) (%) (%) (%) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts 0.35 2.04 26.13 1,293 13.30 0.96 0.86 7.97 0.80 7.21
State of MO 0.40 2.56 23.72 784 16.72 0.75 0.97 7.45 0.92 7.32
Comparable Group Average 0.43 2.83 56.45 91 20.36 0.15 0.96 4.74 0.94 4.65
Mid-West Companies 0.43 2.83 56.45 91 20.36 0.15 0.96 4.74 0.94 4.65
Comparable Group
----------------
Mid-West Companies
------------------
KYF Kentucky First Bancorp of KY 0.50 3.33 NM 84 23.62 0.15 1.12 5.40 1.12 5.40
- ---------------------------------------------------------------------------------------------------------------------
NBSI North Bancshares of Chicago IL 0.40 2.62 74.07 114 17.34 NA 0.57 3.03 0.52 2.75
SFFC StateFed Financial Corp. of IA 0.40 2.54 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 (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>
<PAGE>
EXHIBIT IV-1
Stock Prices:
As of July 12, 1996
<PAGE>
RP FINANCIAL, LC.
-------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1
Weekly Thrift Market Line - Part One
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Market Capitalization Price Change Data
---------------------- -----------------------------------------------
52 Week (1) % Change From
Shares Market --------------- -----------------------
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) ($Mil) ($) ($) ($) (%) (%) (%)
Market Averages. SAIF-Insured Thrifts(no MHC)
---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(330) 16.88 5,887 120.9 18.67 14.37 17.09 -1.16 128.02 -0.09
NYSE Traded Companies(12) 27.47 46,329 1,254.7 30.79 21.98 28.25 -2.67 174.36 -0.84
AMEX Traded Companies(17) 13.85 3,282 49.1 15.08 12.30 13.88 -0.23 212.55 1.74
NASDAQ Listed OTC Companies(301) 16.59 4,262 75.3 18.35 14.16 16.79 -1.15 120.25 -0.14
California Companies(26) 18.31 22,842 552.2 20.58 14.92 18.80 -2.37 47.11 0.20
Florida Companies(9) 12.66 5,172 56.4 14.72 11.12 12.89 -1.92 66.94 0.15
Mid-Atlantic Companies(68) 16.31 5,999 104.0 18.00 14.11 16.49 -1.05 114.67 -0.03
Mid-West Companies(152) 17.50 3,770 81.5 19.23 14.88 17.70 -1.16 150.94 -0.41
New England Companies(9) 16.90 3,675 70.9 18.63 14.52 16.98 -0.64 155.88 -1.65
North-West Companies(6) 18.05 13,480 263.7 19.09 13.66 17.90 0.26 68.11 7.78
South-East Companies(45) 16.08 3,515 56.2 18.17 13.85 16.31 -1.10 169.29 0.33
South-West Companies(7) 13.24 1,879 27.8 14.96 12.00 13.29 -0.46 -18.52 -7.61
Western Companies (Excl CA)(8) 16.08 4,158 62.1 16.88 13.48 16.10 -0.01 223.35 5.13
Thrift Strategy(254) 15.90 3,498 58.7 17.59 13.79 16.07 -1.06 101.38 -0.34
Mortgage Banker Strategy(41) 19.97 11,520 303.1 22.02 16.33 20.33 -1.27 196.87 1.52
Real Estate Strategy(16) 18.20 6,601 123.6 20.01 13.89 18.65 -2.57 89.39 0.49
Diversified Strategy(15) 24.91 29,928 665.2 27.50 20.14 25.00 -0.47 184.60 0.53
Retail Banking Strategy(4) 11.72 3,261 39.9 13.88 10.44 12.24 -4.10 165.86 -6.52
Companies Issuing Dividends(250) 18.12 6,222 136.8 20.02 15.35 18.30 -0.90 148.32 0.07
Companies Without Dividends(80) 13.02 4,842 71.2 14.46 11.30 13.31 -1.97 46.05 -0.75
Equity/Assets less than 6%(29) 16.50 19,811 396.3 18.41 13.03 16.80 -1.47 72.21 1.82
Equity/Assets 6-12%(149) 19.06 5,496 132.4 21.12 15.88 19.29 -1.12 148.50 0.28
Equity/Assets greater than 12%(152) 14.87 3,577 56.7 16.37 13.19 15.04 -1.13 93.89 -0.96
Converted Last 3 Mths (no MHC)(15) 11.51 4,473 54.1 12.16 11.19 11.82 -2.55 0.00 -9.10
Actively Traded Companies(53) 22.84 17,540 432.0 25.28 18.99 23.16 -1.07 154.43 1.09
Market Value Below $20 Million(85) 13.77 961 12.3 15.31 12.16 13.84 -0.47 89.90 -3.70
Holding Company Structure(283) 17.27 5,933 126.7 19.09 14.82 17.50 -1.31 119.86 -0.50
Assets Over $1 Billion(64) 23.61 18,939 451.4 25.98 19.21 23.96 -1.33 150.90 2.04
Assets $500 Million-$1 Billion(57) 17.01 5,093 76.5 18.78 14.52 17.29 -1.73 164.43 0.41
Assets $250-$500 Million(78) 15.53 2,620 37.2 17.37 13.60 15.72 -1.19 97.17 0.04
Assets less than $250 Million(131) 14.13 1,407 18.9 15.60 12.25 14.24 -0.79 81.08 -1.69
Goodwill Companies(136) 19.08 9,797 219.0 21.19 15.86 19.36 -1.26 148.92 1.43
Non-Goodwill Companies(194) 15.32 3,111 51.2 16.88 13.32 15.48 -1.09 89.41 -1.30
Acquirors of FSLIC Cases(14) 24.06 34,556 938.8 26.76 19.62 24.66 -2.27 185.63 -4.30
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
--------------------- ------- ------- ------- ------- -------
($) ($) ($) ($) ($)
Market Averages. SAIF-Insured Thrifts(no MHC)
---------------------------------------------
<S> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(330) 1.26 1.13 16.72 16.28 162.60
NYSE Traded Companies(12) 2.35 1.96 21.36 20.01 355.85
AMEX Traded Companies(17) 0.79 0.75 15.13 14.97 104.02
NASDAQ Listed OTC Companies(301) 1.23 1.11 16.61 16.20 157.54
California Companies(26) 0.99 0.85 18.25 17.78 273.96
Florida Companies(9) 1.23 0.78 12.45 12.16 175.79
Mid-Atlantic Companies(68) 1.34 1.28 16.53 15.86 164.80
Mid-West Companies(152) 1.30 1.15 17.46 17.16 148.59
New England Companies(9) 1.49 1.25 17.78 16.29 241.42
North-West Companies(6) 1.28 1.15 13.04 12.36 163.81
South-East Companies(45) 1.12 1.06 14.66 14.37 123.06
South-West Companies(7) 1.12 1.05 16.25 15.66 213.57
Western Companies (Excl CA)(8) 1.07 1.00 16.40 16.00 113.11
Thrift Strategy(254) 1.08 1.02 16.59 16.24 143.01
Mortgage Banker Strategy(41) 1.90 1.37 17.07 16.11 240.62
Real Estate Strategy(16) 1.66 1.62 16.83 16.61 202.34
Diversified Strategy(15) 2.00 1.97 18.69 18.19 236.98
Retail Banking Strategy(4) 1.13 0.86 13.56 13.05 158.37
Companies Issuing Dividends(250) 1.40 1.25 17.31 16.81 165.36
Companies Without Dividends(80) 0.82 0.75 14.90 14.64 153.97
Equity/Assets less than 6%(29) 1.39 1.09 14.28 13.42 291.39
Equity/Assets 6-12%(149) 1.67 1.47 17.32 16.59 209.16
Equity/Assets greater than 12%(152) 0.83 0.81 16.62 16.54 93.20
Converted Last 3 Mths (no MHC)(15) 0.63 0.66 15.44 14.97 93.88
Actively Traded Companies(53) 2.00 1.88 18.81 18.03 252.96
Market Value Below $20 Million(85) 1.02 0.80 16.12 16.03 133.03
Holding Company Structure(283) 1.25 1.13 17.22 16.78 161.07
Assets Over $1 Billion(64) 1.94 1.78 19.88 18.57 267.30
Assets $500 Million-$1 Billion(57) 1.31 1.22 16.23 15.80 171.37
Assets $250-$500 Million(78) 1.24 0.98 15.80 15.47 156.06
Assets less than $250 Million(131) 0.89 0.84 15.84 15.80 108.36
Goodwill Companies(136) 1.53 1.36 17.33 16.28 213.49
Non-Goodwill Companies(194) 1.06 0.96 16.29 16.29 126.46
Acquirors of FSLIC Cases(14) 2.19 1.93 18.92 17.73 297.28
</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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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) 16.68 6,594 108.4 18.25 13.30 16.88 -1.21 102.47 5.82
NYSE Traded Companies(3) 17.87 52,884 926.1 19.87 15.00 18.79 -5.53 113.46 4.73
AMEX Traded Companies(4) 14.66 3,116 45.7 16.69 13.03 14.66 -0.61 26.34 -7.03
NASDAQ Listed OTC Companies(63) 16.86 4,386 70.0 18.39 13.27 17.04 -1.03 107.63 6.60
California Companies(2) 11.06 5,155 62.6 12.19 8.25 11.63 -3.08 202.67 10.53
Mid-Atlantic Companies(19) 19.16 13,081 233.1 21.20 15.77 19.37 -1.02 75.05 1.14
Mid-West Companies(1) 8.37 2,562 21.4 8.50 7.50 8.13 2.95 0.00 0.00
New England Companies(44) 16.42 3,687 55.1 17.78 12.81 16.58 -1.11 115.22 8.40
North-West Companies(4) 13.08 6,364 86.1 15.13 11.07 13.83 -5.45 25.57 -0.95
South-West Companies(1) 9.75 1,387 13.5 11.50 7.75 9.38 3.94 0.00 8.33
Thrift Strategy(44) 17.02 4,758 88.3 18.41 13.62 17.17 -0.66 102.52 8.71
Mortgage Banker Strategy(11) 18.10 15,663 227.5 19.94 14.34 18.51 -2.81 138.48 3.42
Real Estate Strategy(7) 15.81 3,715 69.0 17.38 11.54 16.02 -1.29 132.58 7.82
Diversified Strategy(7) 12.97 11,250 146.7 15.36 10.90 13.44 -3.93 26.79 -10.31
Retail Banking Strategy(2) 15.06 1,330 18.2 17.13 13.13 14.75 1.56 25.26 -3.98
Companies Issuing Dividends(48) 19.07 5,193 107.2 20.73 15.02 19.30 -0.98 111.02 7.69
Companies Without Dividends(23) 11.78 9,462 110.9 13.18 9.77 11.94 -1.67 68.27 1.09
Equity/Assets less than 6%(8) 10.85 23,161 271.6 12.69 8.83 11.30 -3.72 59.16 -7.07
Equity/Assets 6-12%(52) 17.42 4,900 93.2 19.02 13.79 17.57 -0.87 110.82 7.82
Equity/Assets greater than 12%(11) 16.62 4,782 83.4 17.88 13.61 16.94 -1.33 -6.92 3.49
Converted Last 3 Mths (no MHC)(3) 9.87 4,513 45.9 10.33 9.56 9.85 0.41 0.00 0.00
Actively Traded Companies(29) 17.57 8,626 131.9 18.90 14.02 17.96 -2.49 125.98 6.22
Market Value Below $20 Million(12) 13.07 1,447 13.2 13.98 9.99 12.83 0.99 75.13 8.71
Holding Company Structure(44) 16.96 5,067 83.5 18.58 13.67 17.26 -1.76 106.72 6.53
Assets Over $1 Billion(16) 22.34 18,399 340.2 24.26 17.22 22.83 -2.65 99.12 5.66
Assets $500 Million-$1 Billion(18) 18.82 4,626 76.6 20.42 15.63 19.28 -2.49 130.31 2.19
Assets $250-$500 Million(22) 13.66 3,576 39.4 15.43 11.07 13.78 -0.88 99.51 6.39
Assets less than $250 Million(15) 13.28 1,567 16.0 14.23 10.29 13.07 0.99 74.33 9.07
Goodwill Companies(35) 18.53 9,034 160.8 20.35 14.84 18.72 -1.05 112.29 5.72
Non-Goodwill Companies(36) 14.94 4,301 59.3 16.28 11.85 15.16 -1.35 87.74 5.93
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
--------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. BIF-Insured Thrifts(no MHC)
--------------------------------------------
BIF-Insured Thrifts(71) 1.38 1.34 15.40 14.76 175.37
NYSE Traded Companies(3) 1.02 1.13 18.11 13.88 246.88
AMEX Traded Companies(4) 1.14 0.71 14.48 13.77 150.24
NASDAQ Listed OTC Companies(63) 1.48 1.42 15.37 14.91 174.03
California Companies(2) 0.64 0.55 11.42 11.41 182.68
Mid-Atlantic Companies(19) 1.55 1.53 17.72 16.89 196.66
Mid-West Companies(1) 0.29 0.29 11.06 11.06 19.67
New England Companies(44) 1.39 1.34 15.00 14.34 177.00
North-West Companies(4) 1.03 1.02 12.45 12.45 95.01
South-West Companies(1) 1.24 0.97 7.91 7.64 91.48
Thrift Strategy(44) 1.34 1.32 15.98 15.24 168.20
Mortgage Banker Strategy(11) 1.60 1.59 16.51 15.77 232.21
Real Estate Strategy(7) 1.46 1.34 12.71 12.67 124.13
Diversified Strategy(7) 1.70 1.50 11.47 11.01 161.57
Retail Banking Strategy(2) 0.19 0.20 16.33 15.86 258.61
Companies Issuing Dividends(48) 1.72 1.64 16.90 16.04 195.82
Companies Without Dividends(23) 0.68 0.70 12.34 12.14 133.51
Equity/Assets less than 6%(8) 0.92 0.79 9.66 9.56 180.00
Equity/Assets 6-12%(52) 1.53 1.49 15.63 14.78 192.21
Equity/Assets greater than 12%(11) 0.93 0.94 17.77 17.77 91.78
Converted Last 3 Mths (no MHC)(3) -0.45 0.28 12.55 12.55 68.39
Actively Traded Companies(29) 1.55 1.54 16.02 15.28 194.05
Market Value Below $20 Million(12) 1.11 1.00 13.94 13.44 163.52
Holding Company Structure(44) 1.51 1.46 15.56 15.08 165.04
Assets Over $1 Billion(16) 2.03 1.97 19.01 17.59 236.00
Assets $500 Million-$1 Billion(18) 1.41 1.39 16.94 16.52 189.81
Assets $250-$500 Million(22) 1.09 1.06 12.80 12.36 143.09
Assets less than $250 Million(15) 1.12 1.05 13.97 13.56 147.40
Goodwill Companies(35) 1.57 1.44 16.73 15.40 215.08
Non-Goodwill Companies(36) 1.20 1.24 14.16 14.16 138.07
</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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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(18) 15.37 5,017 23.3 18.09 12.86 15.62 -1.66 102.50 -7.87
BIF-Insured Thrifts(2) 15.56 21,219 128.0 18.06 13.53 15.81 -1.16 168.36 -2.75
NASDAQ Listed OTC Companies(20) 15.39 6,637 33.7 18.09 12.92 15.64 -1.61 124.45 -7.36
Florida Companies(3) 17.50 5,505 43.8 21.50 16.08 18.42 -5.42 0.00 -13.90
Mid-Atlantic Companies(8) 13.78 7,692 25.4 16.56 11.85 13.89 -0.73 57.50 -8.69
Mid-West Companies(7) 15.64 1,911 11.3 17.80 12.31 15.78 -1.10 147.50 -6.57
New England Companies(1) 21.12 39,166 249.5 23.12 17.44 21.62 -2.31 168.36 11.16
North-West Companies(1) 14.37 2,155 11.3 17.00 11.82 14.37 0.00 0.00 -1.17
Thrift Strategy(18) 15.12 5,079 23.0 17.87 12.73 15.38 -1.66 102.50 -8.73
Mortgage Banker Strategy(1) 14.37 2,155 11.3 17.00 11.82 14.37 0.00 0.00 -1.17
Diversified Strategy(1) 21.12 39,166 249.5 23.12 17.44 21.62 -2.31 168.36 11.16
Companies Issuing Dividends(20) 15.39 6,637 33.7 18.09 12.92 15.64 -1.61 124.45 -7.36
Equity/Assets less than 6%(1) 14.50 1,610 10.8 17.25 11.00 14.75 -1.69 0.00 -8.63
Equity/Assets 6-12%(12) 16.97 8,081 44.3 19.73 14.07 17.26 -1.77 124.45 -6.72
Equity/Assets greater than 12%(7) 12.80 4,880 18.8 15.39 11.23 12.99 -1.32 0.00 -8.28
Actively Traded Companies(1) 15.75 6,512 31.5 17.50 13.25 15.75 0.00 57.50 -4.55
Market Value Below $20 Million(1) 13.00 1,250 7.3 14.25 10.50 13.00 0.00 0.00 -6.27
Holding Company Structure(1) 15.75 6,512 31.5 17.50 13.25 15.75 0.00 57.50 -4.55
Assets Over $1 Billion(3) 16.21 24,584 109.7 19.04 14.21 16.71 -3.17 168.36 -4.65
Assets $500 Million-$1 Billion(6) 15.92 5,826 37.0 19.42 14.23 16.31 -2.29 57.50 -10.73
Assets $250-$500 Million(3) 17.67 2,255 15.6 20.87 13.87 17.58 0.39 147.50 -6.54
Assets less than $250 Million(8) 13.83 2,159 9.6 15.69 11.10 14.01 -1.26 0.00 -6.16
Goodwill Companies(9) 15.73 11,223 53.0 18.50 13.34 16.05 -2.25 124.45 -6.60
Non-Goodwill Companies(11) 15.10 2,885 18.0 17.75 12.58 15.30 -1.08 0.00 -7.98
MHC Institutions(20) 15.39 6,637 33.7 18.09 12.92 15.64 -1.61 124.45 -7.36
</TABLE>
<TABLE>
<CAPTION>
Current Per Share Financials
----------------------------------------
Tangible
Trailing 12 Mo. Book Book
12 Mo. Core Value/ Value/ Assets/
Financial Institution EPS(3) EPS(3) Share Share(4) Share
--------------------- -------- ------- ------- ------- -------
($) ($) ($) ($) ($)
<S> <C> <C> <C> <C> <C>
Market Averages. MHC Institutions
---------------------------------
SAIF-Insured Thrifts(18) 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(20) 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(8) 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(1) 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(20) 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%(12) 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(3) 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(9) 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(20) 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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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 25.00 112,512 2,812.8 27.75 21.00 26.12 -4.29 33.33 -5.66
CAL CalFed Inc. of Los Angeles CA 17.37 49,313 856.6 19.00 13.50 18.00 -3.50 -13.97 10.29
CSA Coast Savings Financial of CA 30.75 18,583 571.4 35.12 19.37 32.37 -5.00 166.00 -11.18
CFB Commercial Federal Corp. of NE 36.12 15,067 544.2 39.00 30.37 37.87 -4.62 878.86 -4.32
DME Dime Savings Bank, FSB of NY* 12.50 98,847 1,235.6 13.75 10.12 13.12 -4.73 24.25 7.57
DSL Downey Financial Corp. of CA 21.00 16,973 356.4 24.05 17.02 21.75 -3.45 22.52 -3.45
FRC First Republic Bancorp of CA* 13.62 7,349 100.1 15.37 11.00 15.00 -9.20 202.67 3.81
FED FirstFed Fin. Corp. of CA 17.37 10,624 184.5 18.50 12.37 17.25 0.70 7.55 23.02
GLN Glendale Fed. Bk, FSB of CA 17.25 44,085 760.5 19.62 12.50 18.00 -4.17 6.15 -2.10
GDW Golden West Fin. Corp. of CA 52.87 58,623 3,099.4 56.69 44.37 54.50 -2.99 101.87 -4.31
GWF Great Western Fin. Corp. of CA 21.88 137,205 3,002.0 27.12 20.25 23.00 -4.87 25.96 -13.76
GPT GreenPoint Fin. Corp. of NY* 27.50 52,457 1,442.6 30.50 23.87 28.25 -2.65 N.A. 2.80
SFB Standard Fed. Bancorp of MI 38.50 31,289 1,204.6 43.12 33.62 38.25 0.65 313.53 -2.21
TCB TCF Financial Corp. of MN 33.37 35,835 1,195.8 37.62 24.75 34.00 -1.85 403.32 0.75
WES Westcorp Inc. of Orange CA 18.12 25,836 468.1 21.91 14.64 17.87 1.40 147.20 2.84
AMEX Traded Companies
---------------------
BKC American Bank of Waterbury CT* 25.37 2,286 58.0 27.62 21.62 24.75 2.51 35.31 -6.90
BFD BostonFed Bancorp of MA 11.87 6,590 78.2 12.62 10.00 12.00 -1.08 N.A. 1.02
CFX Cheshire Fin. Corp. of NH* 13.00 7,566 98.4 17.50 12.75 13.50 -3.70 9.24 -16.83
CZF Citisave Fin. Corp. of LA 14.50 965 14.0 16.50 12.75 14.00 3.57 N.A. -1.69
CBK Citizens First Fin.Corp. of IL 9.94 2,818 28.0 10.50 9.75 10.12 -1.78 N.A. N.A.
ESX Essex Bancorp of VA(8) 2.62 1,051 2.8 5.50 1.75 2.75 -4.73 -84.36 39.36
FCB Falmouth Co-Op Bank of MA* 10.50 1,455 15.3 11.37 10.25 10.37 1.25 N.A. N.A.
GAF GA Financial Corp. of PA 10.75 8,900 95.7 11.50 10.50 10.87 -1.10 N.A. N.A.
KNK Kankakee Bancorp of IL 18.87 1,439 27.2 21.00 18.25 18.87 0.00 88.70 0.00
KYF Kentucky First Bancorp of KY 15.00 1,389 20.8 15.25 11.37 14.12 6.23 N.A. 21.26
NYB New York Bancorp, Inc. of NY 25.87 11,725 303.3 26.12 19.00 25.87 0.00 264.88 14.98
PDB Piedmont Bancorp of NC 12.62 2,645 33.4 13.62 12.00 13.25 -4.75 N.A. 0.96
PLE Pinnacle Bank of AL 16.62 890 14.8 19.25 15.50 16.62 0.00 146.22 -7.67
SSB Scotland Bancorp of NC 12.12 1,840 22.3 12.62 11.62 12.37 -2.02 N.A. N.A.
SZB SouthFirst Bancshares of AL 12.50 855 10.7 16.00 11.37 12.62 -0.95 N.A. -19.35
SRN Southern Banc Company of AL 12.62 1,455 18.4 13.37 11.37 12.62 0.00 N.A. -1.94
SSM Stone Street Bancorp of NC 16.62 1,825 30.3 18.50 16.62 17.00 -2.24 N.A. N.A.
TSH Teche Holding Company of LA 12.87 4,094 52.7 14.50 11.75 12.87 0.00 N.A. -6.40
FTF Texarkana Fst. Fin. Corp of AR 16.00 1,984 31.7 16.50 12.50 16.00 0.00 N.A. 13.31
THR Three Rivers Fin. Corp. of MI 13.12 860 11.3 13.62 11.37 13.37 -1.87 N.A. 7.10
TBK Tolland Bank of CT* 9.75 1,157 11.3 10.25 7.50 10.00 -2.50 34.48 2.63
WSB Washington SB, FSB of MD 5.63 4,220 23.8 6.25 3.62 5.50 2.36 350.40 12.60
NASDAQ Listed OTC Companies
---------------------------
FBCV 1st Bancorp of Vincennes IN 27.00 666 18.0 32.86 26.00 26.37 2.39 N.A. -7.44
WFSB 1st Washington Bancorp of VA(8) 7.94 9,883 78.5 8.03 5.00 8.00 -0.75 98.50 13.43
ALBK ALBANK Fin. Corp. of Albany NY 25.62 13,605 348.6 30.62 22.81 26.37 -2.84 10.19 2.48
AMFC AMB Financial Corp. of IN 10.25 1,124 11.5 11.00 9.75 10.75 -4.65 N.A. N.A.
ASBP ASB Financial Corp. of OH 15.00 1,714 25.7 16.50 11.62 15.00 0.00 N.A. -5.48
ABBK Abington Savings Bank of MA(8)* 15.94 1,884 30.0 18.50 13.75 15.75 1.21 140.79 -7.59
AADV Advantage Bancorp of WI 33.25 3,449 114.7 34.50 24.00 34.25 -2.92 261.41 10.10
AFCB Affiliated Comm BC, Inc of MA 16.75 5,072 85.0 18.00 16.06 17.37 -3.57 N.A. -3.57
ALBC Albion Banc Corp. of Albion NY 16.75 261 4.4 18.75 14.75 17.00 -1.47 28.85 1.52
ATSB AmTrust Capital Corp. of IN 8.56 567 4.9 11.25 8.50 8.50 0.71 N.A. -16.49
</TABLE>
<TABLE>
<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 1.69 1.59 12.64 12.64 289.58
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* 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 11.98 10.69 126.66
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 0.59 0.44 4.97 4.97 60.42
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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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* 9.50 5,422 51.5 10.31 9.38 9.50 0.00 N.A. -6.03
ASBI Ameriana Bancorp of IN 13.31 3,325 44.3 14.44 12.19 13.50 -1.41 44.20 -6.60
AFFFZ America First Fin. Fund of CA 26.25 6,011 157.8 29.75 24.50 26.75 -1.87 40.00 -11.76
AMFB American Federal Bank of SC 15.87 10,921 173.3 16.75 14.25 16.12 -1.55 234.11 4.07
ANBK American Nat'l Bancorp of MD 10.50 3,980 41.8 10.62 8.44 10.62 -1.13 N.A. 7.69
ABCW Anchor Bancorp Wisconsin of WI 34.62 4,934 170.8 36.25 25.90 34.75 -0.37 17.88 -3.48
ANDB Andover Bancorp, Inc. of MA* 24.75 4,243 105.0 27.00 19.00 25.50 -2.94 130.23 17.19
ASFC Astoria Financial Corp. of NY 26.19 21,917 574.0 28.13 18.25 26.87 -2.53 -0.23 14.82
AVND Avondale Fin. Corp. of IL 12.62 4,015 50.7 15.25 12.62 13.00 -2.92 N.A. -12.97
BFSI BFS Bankorp, Inc. of NY 38.25 1,635 62.5 39.75 25.25 38.50 -0.65 322.19 8.51
BKCT Bancorp Connecticut of CT* 22.75 2,706 61.6 23.50 13.75 23.25 -2.15 160.00 53.82
BWFC Bank West Fin. Corp. of MI 11.50 2,296 26.4 11.50 8.75 11.00 4.55 N.A. 13.64
BANC BankAtlantic Bancorp of FL 13.25 11,743 155.6 16.00 12.00 13.50 -1.85 154.81 -11.67
BKUNA BankUnited SA of FL 7.25 5,693 41.3 8.75 6.12 7.50 -3.33 33.52 18.46
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 32.50 6,900 224.3 35.25 24.00 33.25 -2.26 64.56 14.04
BFSB Bedford Bancshares of VA 16.50 1,195 19.7 18.75 15.63 16.50 0.00 57.14 -5.01
BSBC Branford SB of CT* 3.00 6,559 19.7 3.50 2.12 3.37 -10.98 41.51 4.53
BRFC Bridgeville SB, FSB of PA(8) 15.00 1,124 16.9 15.25 12.25 15.12 -0.79 5.26 3.45
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 17.00 1,188 20.2 19.25 13.00 17.50 -2.86 54.55 -5.56
CCFH CCF Holding Company of GA 11.87 1,131 13.4 12.75 10.75 12.00 -1.08 N.A. -6.90
CENF CENFED Financial Corp. of CA 21.62 5,031 108.8 23.41 17.95 21.75 -0.60 37.88 -0.92
CFSB CFSB Bancorp of Lansing MI 20.25 4,476 90.6 24.00 17.95 20.75 -2.41 125.00 -5.81
CKFB CKF Bancorp of Danville KY 19.50 932 18.2 20.25 13.00 19.50 0.00 N.A. 1.30
CNSB CNS Bancorp of MO 11.50 1,653 19.0 12.00 11.00 11.50 0.00 N.A. N.A.
CSBF CSB Financial Group Inc of IL 9.25 1,035 9.6 9.62 8.81 9.25 0.00 N.A. -2.63
CFHC California Fin. Hld. Co. of CA 22.37 4,689 104.9 22.75 16.25 22.25 0.54 113.05 9.12
CBCI Calumet Bancorp of Chicago IL 28.00 2,668 74.7 28.50 26.75 28.06 -0.21 38.27 0.90
CAFI Camco Fin. Corp. of OH 19.25 2,070 39.8 19.29 13.81 18.69 3.00 N.A. 12.31
CMRN Cameron Fin. Corp. of MO 13.50 2,850 38.5 15.50 11.87 13.50 0.00 N.A. -6.05
CAPS Capital Savings Bancorp of MO 18.12 1,039 18.8 19.50 16.50 18.00 0.67 36.75 -2.05
CARV Carver FSB of New York, NY 8.00 2,314 18.5 10.75 6.81 7.75 3.23 28.00 -11.11
CASB Cascade SB of Everett WA 16.50 2,040 33.7 17.25 12.40 16.50 0.00 28.91 24.06
CATB Catskill Fin. Corp. of NY* 10.00 5,687 56.9 10.75 10.00 10.12 -1.19 N.A. N.A.
CNIT Cenit Bancorp of Norfolk VA 32.50 1,606 52.2 40.25 32.50 34.00 -4.41 104.66 -11.56
CTBK Center Banks, Inc. of NY* 13.50 932 12.6 15.25 13.50 13.50 0.00 22.73 -3.98
CFCX Center Fin. Corp of CT(8)* 24.25 14,487 351.3 24.31 15.00 24.25 0.00 259.26 38.57
CEBK Central Co-Op. Bank of MA* 17.75 1,933 34.3 17.75 10.75 17.00 4.41 238.10 18.33
CJFC Central Jersey Fin. Corp of NJ(8) 30.00 2,668 80.0 31.31 21.00 30.50 -1.64 221.89 20.00
CBSB Charter Financial Inc. of IL 11.00 4,974 54.7 12.25 9.54 11.37 -3.25 N.A. 1.76
COFI Charter One Financial of OH(8) 33.62 45,115 1,516.8 38.00 25.50 35.00 -3.94 92.11 9.80
CVAL Chester Valley Bancorp of PA 18.25 1,580 28.8 20.48 18.12 18.25 0.00 61.08 -5.19
CRCL Circle Financial Corp.of OH(8) 35.00 708 24.8 35.50 25.00 35.00 0.00 218.18 29.63
CTZN CitFed Bancorp of Dayton OH 36.25 5,686 206.1 39.50 31.00 38.00 -4.61 302.78 5.07
CLAS Classic Bancshares of KY 10.69 1,322 14.1 11.75 10.37 10.56 1.23 N.A. -9.02
CMSB Cmnwealth Bancorp of PA 10.19 17,953 183.2 12.39 8.65 10.50 -2.95 N.A. -9.10
CBSA Coastal Bancorp of Houston TX 18.50 4,958 91.7 18.75 15.63 18.50 0.00 N.A. 5.71
CFCP Coastal Fin. Corp. of SC 22.00 2,742 60.3 22.50 14.80 22.00 0.00 120.00 39.24
COFD Collective Bancorp Inc. of NJ 23.25 20,374 473.7 28.25 21.75 24.00 -3.13 205.12 -8.36
CMSV Commty. Svgs, MHC of FL(47.6) 16.00 4,869 38.1 18.25 14.25 16.25 -1.54 N.A. -5.88
CBIN Community Bank Shares of IN 12.00 1,984 23.8 14.75 12.00 12.62 -4.91 N.A. -15.79
CBNH Community Bankshares Inc of NH* 18.50 2,416 44.7 19.75 15.75 18.50 0.00 393.33 -1.96
CFTP Community Fed. Bancorp of MS 13.00 4,629 60.2 13.75 12.50 13.50 -3.70 N.A. N.A.
CFFC Community Fin. Corp. of VA 19.50 1,270 24.8 21.00 15.00 20.75 -6.02 178.57 8.33
</TABLE>
<TABLE>
<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
BSBC Branford SB of CT* 0.20 0.20 2.31 2.31 26.59
BRFC Bridgeville SB, FSB of PA(8) 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
CNSB CNS Bancorp of MO 0.45 0.38 14.07 14.07 60.98
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 18.40 18.23 272.46
CBCI Calumet Bancorp of Chicago IL 2.28 2.27 31.99 31.99 188.31
CAFI Camco Fin. Corp. of OH 2.02 1.54 13.83 13.83 166.04
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 0.33 0.33 15.02 14.30 158.88
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 Bancorp of PA 0.83 0.80 12.41 9.15 119.19
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 17.50 16.25 248.29
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. Bancorp of MS 0.43 0.42 14.34 14.34 43.32
CFFC Community Fin. Corp. of VA 1.58 1.58 17.24 17.24 125.82
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Price Change Data
Market Capitalization -----------------------------------------------
---------------------- 52 Week (1) % Change From
Shares Market --------------- -----------------------
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)
---------------------------------------
CIBI Community Inv. Corp. of OH 15.00 701 10.5 17.50 13.00 15.00 0.00 N.A. -1.64
COOP Cooperative Bk.for Svgs. of NC 16.50 1,492 24.6 22.50 16.50 17.00 -2.94 65.00 -19.51
CNSK Covenant Bank for Svgs. of NJ* 12.00 1,959 23.5 13.22 8.84 12.00 0.00 N.A. -9.23
CRZY Crazy Woman Creek Bncorp of WY 10.12 1,058 10.7 11.00 10.00 10.25 -1.27 N.A. N.A.
DNFC D&N Financial Corp. of MI 12.62 6,829 86.2 14.25 10.25 14.00 -9.86 44.23 4.13
DSBC DS Bancor Inc. of Derby CT* 34.50 3,029 104.5 36.50 23.33 34.75 -0.72 109.73 35.29
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
DIME Dime Community Bancorp of NY 11.75 14,548 170.9 12.12 11.69 12.00 -2.08 N.A. N.A.
DIBK Dime Financial Corp. of CT* 15.00 5,024 75.4 15.63 10.37 15.12 -0.79 42.86 11.11
EGLB Eagle BancGroup of IL 11.00 1,303 14.3 11.75 11.00 11.75 -6.38 N.A. N.A.
EBSI Eagle Bancshares of Tucker GA 14.75 3,117 46.0 19.00 14.00 15.50 -4.84 103.45 -22.37
EGFC Eagle Financial Corp. of CT 24.75 4,491 111.2 27.75 21.25 24.50 1.02 182.86 -5.71
ETFS East Texas Fin. Serv. of TX 14.50 1,194 17.3 16.75 13.75 14.62 -0.82 N.A. -10.77
EBCP Eastern Bancorp of NH 16.00 3,597 57.6 18.33 14.33 16.50 -3.03 27.49 -10.26
ESBK Elmira SB of Elmira NY* 18.00 706 12.7 18.75 14.50 17.12 5.14 25.26 -4.00
EFBI Enterprise Fed. Bancorp of OH 14.00 2,085 29.2 18.00 13.75 14.00 0.00 N.A. -5.08
EQSB Equitable FSB of Wheaton MD 24.00 600 14.4 26.25 21.00 24.50 -2.04 N.A. -4.00
FFFG F.F.O. Financial Group of FL 2.62 8,430 22.1 3.00 2.25 2.75 -4.73 -68.47 2.34
FCBF FCB Fin. Corp. of Neenah WI 17.25 2,513 43.3 18.50 15.50 17.50 -1.43 N.A. -6.76
FFBS FFBS Bancorp of Columbus MS 22.50 1,573 35.4 24.25 16.00 23.00 -2.17 N.A. 32.35
FFDF FFD Financial Corp. of OH 10.25 1,455 14.9 10.75 10.00 10.62 -3.48 N.A. N.A.
FFLC FFLC Bancorp of Leesburg FL 18.00 2,619 47.1 20.25 17.25 18.50 -2.70 N.A. -4.00
FFFC FFVA Financial Corp. of VA 17.00 5,426 92.2 18.25 13.37 17.25 -1.45 N.A. 23.64
FFWC FFW Corporation of Wabash IN 19.25 739 14.2 20.00 16.50 20.00 -3.75 N.A. -2.53
FFYF FFY Financial Corp. of OH 23.75 5,193 123.3 23.75 19.50 23.50 1.06 N.A. 13.10
FMCO FMS Financial Corp. of NJ 16.25 2,467 40.1 17.50 14.50 16.37 -0.73 80.56 -4.41
FFHH FSF Financial Corp. of MN 11.62 3,861 44.9 13.50 11.50 11.75 -1.11 N.A. -10.62
FMLY Family Bancorp of Haverhill MA(8)* 23.87 4,087 97.6 25.25 14.67 24.62 -3.05 358.16 33.58
FMCT Farmers & Mechanics Bank of CT(8)* 30.25 1,661 50.2 30.37 15.75 30.31 -0.20 N.A. 37.50
FOBC Fed One Bancorp of Wheeling WV 14.12 2,489 35.1 16.25 13.00 14.50 -2.62 41.20 -6.61
FFRV Fid. Fin. Bkshrs. Corp. of VA 12.75 2,279 29.1 14.75 12.00 13.50 -5.56 45.71 -8.07
FBCI Fidelity Bancorp of Chicago IL 15.75 3,085 48.6 17.00 13.50 16.00 -1.56 N.A. 2.47
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) 12.50 6,720 39.6 17.00 12.50 14.00 -10.71 N.A. -23.08
FFED Fidelity Fed. Bancorp of IN 11.25 2,493 28.0 14.77 10.46 11.75 -4.26 59.57 -23.83
FFOH Fidelity Financial of OH 9.81 4,073 40.0 10.89 5.61 10.00 -1.90 N.A. -9.92
FIBC Financial Bancorp of NY 12.37 1,873 23.2 14.87 12.25 12.50 -1.04 N.A. -10.04
FNSC Financial Security Corp. of IL(8) 25.37 1,523 38.6 26.50 17.00 25.62 -0.98 153.70 14.02
FSBS First Ashland Fin. Corp. of KY(8) 18.25 1,463 26.7 18.37 13.00 18.25 0.00 N.A. 25.86
FBSI First Bancshares of MO 15.63 1,302 20.4 17.00 15.00 15.25 2.49 22.59 -2.31
FBBC First Bell Bancorp of PA 13.37 8,166 109.2 14.25 11.87 13.50 -0.96 N.A. 0.00
FBER First Bergen Bancorp of NJ 9.12 3,174 28.9 10.00 9.00 9.19 -0.76 N.A. N.A.
FCIT First Cit. Fin. Corp of MD 16.25 2,914 47.4 19.09 14.09 17.75 -8.45 87.00 -5.91
FFBA First Colorado Bancorp of Co 13.62 20,302 276.5 13.62 7.92 12.94 5.26 312.73 23.93
FDEF First Defiance Fin.Corp. of OH 10.12 10,978 111.1 11.00 7.99 10.37 -2.41 N.A. 0.00
FESX First Essex Bancorp of MA* 10.25 6,035 61.9 12.00 8.62 11.00 -6.82 70.83 -9.85
FFES First FS&LA of E. Hartford CT 17.50 2,594 45.4 21.50 16.75 17.50 0.00 169.23 -12.50
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) 24.75 1,706 18.7 28.62 18.00 24.50 1.02 147.50 -7.48
FFML First Family Bank, FSB of FL 21.00 545 11.4 23.00 14.50 21.00 0.00 223.08 0.00
FFSW First Fed Fin. Serv. of OH 29.50 3,275 96.6 29.50 18.18 29.00 1.72 73.53 36.64
BDJI First Fed. Bancorp. of MN 12.25 819 10.0 14.75 11.87 13.06 -6.20 N.A. -10.91
FFBH First Fed. Bancshares of AR 13.12 5,154 67.6 14.00 13.00 14.00 -6.29 N.A. N.A.
FFEC First Fed. Bancshares of WI 14.75 6,855 101.1 16.19 12.25 15.50 -4.84 N.A. -3.28
FTFC First Fed. Capital Corp. of WI 19.75 6,298 124.4 22.87 15.75 20.00 -1.25 75.56 9.72
</TABLE>
<TABLE>
<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)
---------------------------------------
CIBI Community Inv. Corp. of OH 1.20 1.14 17.45 17.45 121.56
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
DIME Dime Community Bancorp of NY 0.63 0.58 14.17 12.45 83.75
DIBK Dime Financial Corp. of CT* 1.93 2.17 10.63 10.10 133.64
EGLB Eagle BancGroup of IL 0.10 0.10 16.89 16.89 124.84
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 1.40 1.16 17.65 16.62 229.33
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 1.15 1.16 21.42 21.42 126.20
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) 1.42 1.37 25.85 25.85 179.89
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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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)
---------------------------------------
FFKY First Fed. Fin. Corp. of KY 20.00 4,215 84.3 22.00 14.12 21.00 -4.76 26.98 30.12
FFBZ First Federal Bancorp of OH 24.50 785 19.2 24.50 15.50 24.50 0.00 145.00 20.99
FFWM First Fin. Corp of Western MD 21.12 2,188 46.2 23.75 17.75 20.25 4.30 111.20 6.94
FFCH First Fin. Holdings Inc. of SC 19.00 6,366 121.0 22.25 17.50 17.50 8.57 55.10 -1.30
FFBI First Financial Bancorp of IL 15.50 472 7.3 16.25 15.00 15.50 0.00 N.A. -3.13
FFHC First Financial Corp. of WI 22.75 29,905 680.3 24.00 17.00 22.94 -0.83 44.44 -1.09
FFHS First Franklin Corp. of OH 15.50 1,187 18.4 17.50 13.50 15.00 3.33 18.14 -2.33
FGHC First Georgia Hold. Corp of GA 6.50 2,024 13.2 7.83 4.17 6.12 6.21 69.71 -15.25
FSPG First Home SB, SLA of NJ 17.75 2,030 36.0 19.00 15.00 17.75 0.00 195.83 -6.58
FFSL First Independence Corp. of KS 17.75 583 10.3 19.25 15.75 17.75 0.00 N.A. -5.33
FISB First Indiana Corp. of IN 22.25 8,278 184.2 25.19 16.67 23.62 -5.80 64.81 3.68
FKFS First Keystone Fin. Corp of PA 17.25 1,292 22.3 20.87 14.25 17.00 1.47 N.A. -17.35
FLKY First Lancaster Bncshrs of KY 13.62 959 13.1 13.62 13.12 13.37 1.87 N.A. N.A.
FLFC First Liberty Fin. Corp. of GA 21.00 3,982 83.6 22.75 16.75 21.75 -3.45 175.59 -1.18
CASH First Midwest Fin. Corp. of IA 21.75 1,790 38.9 24.25 18.25 22.50 -3.33 N.A. -7.45
FMBD First Mutual Bancorp of IL 12.00 4,352 52.2 14.75 11.37 12.00 0.00 N.A. -11.89
FMSB First Mutual SB of Bellevue WA* 12.25 2,447 30.0 16.00 9.09 13.00 -5.77 58.06 -9.53
FNGB First Northern Cap. Corp of WI 15.25 4,557 69.5 16.50 13.25 15.25 0.00 4.74 -7.58
FFPB First Palm Beach Bancorp of FL 20.25 5,181 104.9 24.87 20.00 20.87 -2.97 N.A. -4.12
FSNJ First SB of NJ, MHC (45.0) 14.62 3,017 19.9 19.50 12.50 14.12 3.54 N.A. -15.25
FSBC First SB, FSB of Clovis NM 5.50 696 3.8 7.00 5.25 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 13.25 15.75 0.00 57.50 -4.55
SOPN First SB, SSB, Moore Co. of NC 18.00 3,744 67.4 20.25 17.25 18.25 -1.37 N.A. 1.07
FWWB First Savings Bancorp of WA* 14.50 10,065 145.9 15.63 12.37 15.25 -4.92 N.A. 10.52
SHEN First Shenango Bancorp of PA 20.06 2,308 46.3 22.25 18.75 20.50 -2.15 N.A. -2.15
FSFC First So.east Fin. Corp. of SC(8) 9.62 4,101 39.5 20.25 9.25 9.75 -1.33 N.A. -49.37
FSFI First State Fin. Serv. of NJ(8) 12.87 4,025 51.8 14.12 10.00 13.00 -1.00 217.00 -5.51
FFDP FirstFed Bancshares of IL 16.37 3,387 55.4 17.62 12.67 17.25 -5.10 145.80 15.53
FLAG Flag Financial Corp of GA 11.50 2,008 23.1 15.00 11.50 12.25 -6.12 17.35 -16.36
FFPC Florida First Bancorp of FL(8) 11.00 3,374 37.1 11.25 6.00 11.06 -0.54 485.11 49.25
FFIC Flushing Fin. Corp. of NY* 16.87 7,958 134.3 18.25 14.12 17.37 -2.88 N.A. 9.76
FBHC Fort Bend Holding Corp. of TX 17.25 817 14.1 20.25 17.00 17.25 0.00 N.A. -4.17
FTSB Fort Thomas Fin. Corp. of KY 16.37 1,574 25.8 17.75 11.25 17.25 -5.10 N.A. 35.07
FKKY Frankfort First Bancorp of KY 12.25 3,450 42.3 15.87 11.00 12.12 1.07 N.A. -7.55
GFSB GFS Bancorp of Grinnell IA 20.25 515 10.4 20.75 15.75 20.25 0.00 N.A. 1.25
GUPB GFSB Bancorp of Gallup NM 13.56 949 12.9 15.00 12.87 13.50 0.44 N.A. -4.84
GWBC Gateway Bancorp of KY 13.75 1,176 16.2 16.25 13.50 14.12 -2.62 N.A. -3.51
GBCI Glacier Bancorp of MT 21.25 3,360 71.4 22.27 16.14 21.62 -1.71 339.96 15.43
GLBK Glendale Co-op. Bank of MA* 16.50 247 4.1 19.00 13.00 16.50 0.00 N.A. -12.00
GFCO Glenway Financial Corp. of OH 20.50 1,091 22.4 24.50 18.50 20.75 -1.20 N.A. -16.33
GTPS Great American Bancorp of IL 13.25 1,850 24.5 15.12 11.87 14.25 -7.02 N.A. -9.00
GTFN Great Financial Corp. of KY 25.50 14,653 373.7 27.37 20.00 25.87 -1.43 N.A. 8.51
GSBC Great Southern Bancorp of MO 27.00 4,434 119.7 27.50 19.75 26.94 0.22 824.66 9.09
GDVS Greater DV SB,MHC of PA(19.9)* 10.00 3,272 6.5 13.00 9.62 10.00 0.00 N.A. -16.67
GRTR Greater New York SB of NY* 10.62 13,289 141.1 13.31 9.87 10.81 -1.76 14.07 -11.50
GSFC Green Street Fin. Corp. of NC 13.00 4,298 55.9 13.12 12.12 13.12 -0.91 N.A. N.A.
GROV GroveBank for Savings of MA* 29.50 1,538 45.4 31.25 23.00 30.50 -3.28 232.58 19.19
GFED Guaranty FS&LA,MHC of MO(31.1) 11.25 3,125 8.8 12.50 8.00 11.50 -2.17 N.A. -5.22
GSLC Guaranty Svgs & Loan FA of VA 7.75 919 7.1 8.50 6.37 7.50 3.33 N.A. 0.00
HEMT HF Bancorp of Hemet CA 9.25 6,612 61.2 10.25 8.19 9.62 -3.85 N.A. -6.28
HFFC HF Financial Corp. of SD(8) 15.25 3,055 46.6 16.75 13.44 15.00 1.67 205.00 0.00
HFNC HFNC Financial Corp. of NC 16.00 17,192 275.1 16.62 13.12 16.12 -0.74 N.A. 21.95
HMNF HMN Financial, Inc. of MN 15.50 5,180 80.3 16.50 13.75 16.12 -3.85 N.A. -3.13
HALL Hallmark Capital Corp. of WI 14.75 1,443 21.3 16.25 13.75 15.25 -3.28 N.A. -4.84
HARB Harbor FSB, MHC of FL (45.7) 24.00 4,925 53.8 29.25 21.50 25.00 -4.00 N.A. -12.73
</TABLE>
<TABLE>
<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)
---------------------------------------
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
FFBI First Financial Bancorp of IL 1.12 1.17 16.66 16.66 187.74
FFHC First Financial Corp. of WI 2.33 2.27 13.29 12.62 181.21
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
FLKY First Lancaster Bncshrs of KY 0.54 0.54 13.47 13.47 45.15
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(8) 0.78 0.77 17.19 17.19 87.66
FSFI First State Fin. Serv. of NJ(8) 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 2.06 1.81 21.51 21.51 298.86
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 0.42 0.41 17.95 17.95 65.16
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
HARB Harbor FSB, MHC of FL (45.7) 2.15 2.14 16.78 16.78 189.41
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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)
---------------------------------------
HRBF Harbor Federal Bancorp of MD 12.50 1,754 21.9 15.50 12.50 12.50 0.00 25.00 -13.79
HFSA Hardin Bancorp of Hardin MO 11.75 1,058 12.4 13.00 11.00 11.62 1.12 N.A. -7.84
HARL Harleysville SA of PA 17.50 1,287 22.5 19.75 15.00 17.50 0.00 -1.41 16.67
HARS Harris SB, MHC of PA (23.1) 16.00 11,211 40.0 20.50 15.50 16.50 -3.03 N.A. -20.00
HFFB Harrodsburg 1st Fin Bcrp of KY 16.75 2,182 36.5 16.75 12.37 16.50 1.52 N.A. 11.67
HHFC Harvest Home Fin. Corp. of OH 12.50 895 11.2 13.25 10.25 12.50 0.00 N.A. 2.04
HAVN Haven Bancorp of Woodhaven NY 28.00 4,287 120.0 28.75 18.25 27.75 0.90 N.A. 18.54
HVFD Haverfield Corp. of OH 18.00 1,904 34.3 19.00 12.27 18.00 0.00 16.13 33.33
HTHR Hawthorne Fin. Corp. of CA 8.25 2,599 21.4 9.00 2.25 8.50 -2.94 -70.00 65.00
HSBK Hibernia SB of Quincy MA* 14.12 1,556 22.0 18.00 14.12 14.25 -0.91 85.30 -13.11
HBNK Highland Federal Bank of CA 15.00 2,296 34.4 17.00 11.00 16.00 -6.25 N.A. -3.23
HIFS Hingham Inst. for Sav. of MA* 14.00 1,297 18.2 14.75 10.75 14.00 0.00 207.02 -5.08
HNFC Hinsdale Financial Corp. of IL 23.62 2,690 63.5 26.75 18.60 24.00 -1.58 136.20 9.86
HBFW Home Bancorp of Fort Wayne IN 15.31 3,094 47.4 16.00 12.87 15.19 0.79 N.A. 0.39
HBBI Home Building Bancorp of IN 20.25 322 6.5 21.25 13.00 21.25 -4.71 N.A. 22.73
HOMF Home Fed Bancorp of Seymour IN 26.75 2,224 59.5 27.25 23.25 26.25 1.90 78.33 0.94
HFMD Home Federal Corporation of MD(8) 10.25 2,519 25.8 11.37 6.12 10.25 0.00 5.13 32.26
HWEN Home Financial Bancorp of IN 10.12 506 5.1 10.25 9.87 10.00 1.20 N.A. N.A.
HOFL Home Financial Corp. of FL(8) 13.44 24,771 332.9 16.25 12.62 13.00 3.38 168.80 -13.29
HPBC Home Port Bancorp, Inc. of MA* 13.50 1,842 24.9 15.00 11.00 13.50 0.00 68.75 14.89
HMCI Homecorp, Inc. of Rockford IL 17.12 1,126 19.3 18.50 14.00 17.00 0.71 71.20 3.01
LOAN Horizon Bancorp, Inc of TX* 9.75 1,387 13.5 11.50 7.75 9.38 3.94 N.A. 8.33
HZFS Horizon Fin'l. Services of IA 14.75 448 6.6 16.37 12.12 15.00 -1.67 N.A. -3.28
HRZB Horizon Financial Corp. of WA* 12.50 6,580 82.3 13.75 11.75 13.25 -5.66 -6.92 -3.85
IBSF IBS Financial Corp. of NJ 12.94 11,410 147.6 15.46 12.50 12.87 0.54 N.A. -5.13
ISBF ISB Financial Corp. of LA 13.81 7,381 101.9 17.00 13.62 14.50 -4.76 N.A. -7.93
IFSB Independence FSB of DC 7.75 1,279 9.9 9.25 6.75 8.00 -3.13 287.50 -8.18
INCB Indiana Comm. Bank, SB of IN 13.87 922 12.8 16.75 12.12 13.94 -0.50 N.A. -9.05
IFSL Indiana Federal Corp. of IN 19.50 4,737 92.4 21.50 16.25 19.75 -1.27 158.62 -8.24
INBI Industrial Bancorp of OH 10.75 5,554 59.7 16.00 10.75 11.12 -3.33 N.A. -21.82
IWBK Interwest SB of Oak Harbor WA 24.75 6,434 159.2 25.12 13.87 24.00 3.13 147.50 21.50
IPSW Ipswich SB of Ipswich MA* 11.87 1,174 13.9 12.62 4.75 11.50 3.22 N.A. 43.88
IROQ Iroquois Bancorp of Auburn NY* 16.00 2,349 37.6 16.00 11.50 15.25 4.92 128.57 23.08
JSBF JSB Financial, Inc. of NY 32.75 10,333 338.4 34.87 29.25 33.12 -1.12 184.78 3.57
JXVL Jacksonville Bancorp of TX 10.12 2,662 26.9 11.99 7.49 10.37 -2.41 N.A. -13.06
JXSB Jcksnville SB,MHC of IL(43.3%) 13.00 1,250 7.3 14.25 10.50 13.00 0.00 N.A. -6.27
JEBC Jefferson Bancorp of Gretna LA(8) 22.00 2,196 48.3 22.50 19.00 22.12 -0.54 N.A. 14.29
JSBA Jefferson Svgs Bancorp of MO 24.50 4,182 102.5 30.75 18.25 25.00 -2.00 N.A. -11.71
JOAC Joachim Bancorp of MO 12.44 760 9.5 13.50 11.50 12.75 -2.43 N.A. -7.85
KSAV KS Bancorp of Kenly NC 20.00 663 13.3 22.00 16.50 18.25 9.59 N.A. 14.29
KSBK KSB Bancorp of Kingfield ME* 22.50 374 8.4 22.50 15.50 22.00 2.27 N.A. 16.88
KFBI Klamath First Bancorp of OR 14.12 11,254 158.9 14.62 12.50 14.12 0.00 N.A. 2.69
LBFI L&B Financial of S. Springs TX(8) 16.37 1,584 25.9 17.00 11.75 17.00 -3.71 N.A. 14.88
LSBI LSB Bancorp of Lafayette IN 15.00 965 14.5 17.37 13.50 15.50 -3.23 N.A. -13.04
LVSB Lakeview SB of Paterson NJ 20.25 2,266 45.9 20.75 15.68 20.25 0.00 N.A. 18.77
LARK Landmark Bancshares of KS 15.25 1,951 29.8 15.87 12.75 15.25 0.00 N.A. 10.91
LARL Laurel Capital Group of PA 14.75 1,508 22.2 16.50 14.33 14.75 0.00 15.23 -4.84
LSBX Lawrence Savings Bank of MA* 5.34 4,245 22.7 6.62 3.87 5.37 -0.56 55.23 15.58
LFCT Leader Fin. Corp of Memphis TN(8) 43.50 9,924 431.7 46.37 31.25 44.25 -1.69 N.A. 16.40
LFED Leeds FSB, MHC of MD (35.3) 13.75 3,448 17.2 16.75 12.62 13.50 1.85 N.A. -3.51
LXMO Lexington B&L Fin. Corp. of MO 9.87 1,265 12.5 10.12 9.50 10.12 -2.47 N.A. N.A.
LBCI Liberty Bancorp of Chicago IL 24.50 2,487 60.9 26.87 22.25 24.75 -1.01 145.00 -2.97
LIFB Life Bancorp of Norfolk VA 14.25 10,403 148.2 16.62 14.00 14.19 0.42 N.A. -5.00
LFBI Little Falls Bancorp of NJ 10.25 3,042 31.2 11.50 9.50 10.37 -1.16 N.A. N.A.
LOGN Logansport Fin. Corp. of IN 13.50 1,322 17.8 13.75 11.25 13.00 3.85 N.A. 3.85
</TABLE>
<TABLE>
<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)
---------------------------------------
HRBF Harbor Federal Bancorp of MD 0.57 0.57 15.90 15.90 112.18
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
HWEN Home Financial Bancorp of IN 0.75 0.75 14.81 14.81 75.39
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 Fin. Corp. of IN 0.76 0.75 15.49 15.49 57.86
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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 OH 10.25 529 5.4 11.25 9.75 10.37 -1.16 N.A. N.A.
LISB Long Island Bancorp of NY 29.25 24,859 727.1 32.87 18.75 29.87 -2.08 N.A. 10.92
MAFB MAF Bancorp of IL 23.50 5,244 123.2 26.81 21.36 23.50 0.00 176.47 -6.00
MBLF MBLA Financial Corp. of MO(8) 22.50 1,372 30.9 26.00 15.00 23.25 -3.23 N.A. 16.16
MFBC MFB Corp. of Mishawaka IN 14.00 1,974 27.6 16.25 13.00 14.00 0.00 N.A. -5.08
MLFB MLF Bancorp of Villanova PA 24.50 6,247 153.1 25.00 19.50 24.25 1.03 N.A. 10.11
MSBB MSB Bancorp of Middletown NY* 16.50 2,833 46.7 27.25 15.00 17.25 -4.35 65.00 -10.81
MSBF MSB Financial Corp. of MI 17.25 676 11.7 19.50 14.75 17.25 0.00 N.A. -9.21
MGNL Magna Bancorp of MS 35.00 6,959 243.6 37.25 24.75 37.25 -6.04 600.00 21.74
MARN Marion Capital Holdings of IN 21.00 2,003 42.1 21.00 18.50 20.25 3.70 N.A. 5.00
MFCX 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 29.31 3,150 92.3 33.25 28.25 29.12 0.65 179.14 -2.30
MASB MassBank Corp. of Reading MA* 32.75 2,734 89.5 34.50 26.50 33.50 -2.24 165.61 3.15
MFLR Mayflower Co-Op. Bank of MA* 14.00 873 12.2 14.75 9.50 13.25 5.66 180.00 27.27
MDBK Medford Savings Bank of MA* 21.50 4,530 97.4 24.25 19.50 22.75 -5.49 207.14 0.00
MERI Meritrust FSB of Thibodaux LA 31.25 774 24.2 34.00 20.62 31.25 0.00 N.A. 0.81
MWBX Metro West of MA* 3.75 13,882 52.1 4.87 3.50 3.87 -3.10 -8.98 -8.98
MSEA Metropolitan Bancorp of WA(8) 16.94 3,710 62.8 16.94 10.12 13.62 24.38 133.01 30.31
MCBS Mid Continent Bancshares of KS 18.00 2,061 37.1 19.25 15.50 18.37 -2.01 N.A. -2.70
MIFC Mid Iowa Financial Corp. of IA 6.37 1,730 11.0 7.87 5.06 6.37 0.00 27.40 -17.81
MCBN Mid-Coast Bancorp of ME 19.12 229 4.4 20.25 14.52 19.12 0.00 234.85 11.68
MIDC Midconn Bank of Kensington CT* 18.37 1,904 35.0 19.00 13.00 19.00 -3.32 74.95 31.21
MWBI Midwest Bancshares, Inc. of IA 25.75 357 9.2 27.12 23.50 25.75 0.00 157.50 0.00
MWFD Midwest Fed. Fin. Corp of WI 15.75 1,633 25.7 16.00 8.25 15.75 0.00 215.00 46.51
MFFC Milton Fed. Fin. Corp. of OH 12.50 2,301 28.8 17.12 12.00 12.50 0.00 N.A. -23.08
MIVI Miss. View Hold. Co. of MN 10.75 958 10.3 12.25 9.50 10.75 0.00 N.A. -5.45
MBBC Monterey Bay Bancorp of CA 11.75 3,414 40.1 13.06 9.87 11.87 -1.01 N.A. 1.12
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) 21.00 333 7.0 21.75 13.00 21.00 0.00 N.A. 16.67
MSBK Mutual SB, FSB of Bay City MI 6.00 4,271 25.6 7.37 5.25 5.75 4.35 -31.43 0.00
NHTB NH Thrift Bancshares of NH 9.87 1,690 16.7 11.00 9.25 9.87 0.00 113.64 -2.47
NHSL NHS Financial, Inc. of CA(8) 10.87 2,523 27.4 11.00 7.75 11.00 -1.18 38.83 8.70
NSLB NS&L Bancorp of Neosho MO 12.56 888 11.2 13.75 11.75 12.62 -0.48 N.A. -5.21
NMSB Newmil Bancorp. of CT* 6.81 4,179 28.5 7.50 5.75 6.88 -1.02 6.91 -2.71
NFSL Newnan SB, FSB of Newnan GA 19.75 1,447 28.6 19.75 13.00 18.87 4.66 58.00 14.49
NASB North American SB of MO 29.75 2,276 67.7 32.37 24.00 29.62 0.44 600.00 -7.03
NBSI North Bancshares of Chicago IL 15.25 1,172 17.9 16.25 13.00 15.25 0.00 N.A. 12.96
FFFD North Central Bancshares of IA 10.62 4,011 42.6 12.68 9.22 10.87 -2.30 N.A. 0.66
NEBC Northeast Bancorp of ME* 13.50 1,203 16.2 13.50 10.75 13.00 3.85 14.89 17.39
NEIB Northeast Indiana Bncrp of IN 12.12 2,062 25.0 13.50 11.25 11.81 2.62 N.A. 1.00
NSBK Northside SB of Bronx NY* 35.25 4,815 169.7 36.25 24.00 35.25 0.00 121.00 15.57
NWEQ Northwest Equity Corp. of WI 10.50 981 10.3 11.37 9.00 10.25 2.44 N.A. -3.40
NWSB Northwest SB, MHC of PA(29.9) 11.50 23,376 39.7 13.50 9.69 12.00 -4.17 N.A. -5.12
NSSY Norwalk Savings Society of CT* 21.75 2,371 51.6 22.25 16.25 21.62 0.60 N.A. 14.47
NSSB Norwich Financial Corp. of CT* 14.50 5,604 81.3 15.63 11.25 15.44 -6.09 107.14 12.67
NTMG Nutmeg FS&LA of CT 7.25 708 5.1 7.75 5.17 7.25 0.00 N.A. 8.70
OHSL OHSL Financial Corp. of OH 19.50 1,224 23.9 22.00 17.25 19.50 0.00 N.A. -9.30
OSBF OSB Fin. Corp. of Oshkosh WI 23.00 1,141 26.2 24.87 22.75 23.62 -2.62 100.00 -3.16
OCFC Ocean Fin. Corp. of NJ 20.12 8,388 168.8 21.25 19.87 20.87 -3.59 N.A. N.A.
OFCP Ottawa Financial Corp. of MI 16.25 5,455 88.6 16.75 13.50 16.31 -0.37 N.A. 3.97
PFFB PFF Bancorp of Pomona CA 10.75 19,837 213.2 11.75 10.62 10.81 -0.56 N.A. N.A.
PVFC PVF Capital Corp. of OH 18.00 1,549 27.9 20.75 12.04 18.50 -2.70 169.87 -1.37
PCCI Pacific Crest Capital of CA* 8.50 2,960 25.2 9.00 5.50 8.25 3.03 N.A. 17.24
PALM Palfed, Inc. of Aiken SC 12.12 5,222 63.3 13.50 11.00 12.12 0.00 -21.15 2.11
PSSB Palm Springs SB of CA(8) 13.87 1,131 15.7 14.00 8.00 13.87 0.00 206.86 58.51
</TABLE>
<TABLE>
<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)
---------------------------------------
LONF London Financial Corp. of OH 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
MAFB MAF Bancorp of IL 3.11 3.20 20.91 20.91 377.61
MBLF MBLA Financial Corp. of MO(8) 1.00 1.00 20.67 20.67 142.18
MFBC MFB Corp. of Mishawaka IN 0.66 0.65 19.66 19.66 101.77
MLFB MLF Bancorp of Villanova PA 1.86 1.65 22.46 21.90 282.67
MSBB MSB Bancorp of Middletown NY* 0.83 0.89 15.53 15.26 160.30
MSBF MSB Financial Corp. of MI 1.53 1.40 18.86 18.86 83.31
MGNL Magna Bancorp of MS 3.08 2.91 18.12 17.02 185.48
MARN Marion Capital Holdings of IN 1.23 1.23 21.48 21.48 89.53
MFCX 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* 1.04 0.98 12.42 12.15 129.65
MDBK Medford Savings Bank of MA* 2.15 2.11 19.24 17.45 216.55
MERI Meritrust 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 WA(8) 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 ME 1.33 1.22 21.51 21.51 237.39
MIDC Midconn 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 Fed. Fin. Corp of WI 1.22 0.98 10.20 9.74 109.15
MFFC Milton 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
MFSB Mutual Bancompany of MO(8) 0.34 0.39 18.73 18.73 160.09
MSBK Mutual SB, FSB of Bay City MI 0.02 -0.16 9.19 9.19 168.46
NHTB NH Thrift Bancshares of NH 0.83 0.87 11.49 11.49 149.40
NHSL NHS Financial, Inc. of CA(8) 0.19 0.18 9.78 9.76 115.98
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 12.77 111.03
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
NEBC Northeast Bancorp of ME* 1.08 0.83 13.72 11.53 181.37
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
OCFC Ocean Fin. Corp. of NJ 1.27 1.30 26.36 26.36 140.55
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
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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)
---------------------------------------
PBCI Pamrapo Bancorp, Inc. of NJ 20.00 3,317 66.3 26.12 18.25 19.25 3.90 255.24 -6.98
PVSA Parkvale Financial Corp of PA 24.50 3,233 79.2 28.50 21.60 25.25 -2.97 195.89 -10.91
PBIX Patriot Bank Corp. of PA 13.00 3,498 45.5 13.12 12.31 12.75 1.96 N.A. 1.01
PEEK Peekskill Fin. Corp. of NY 11.87 4,100 48.7 12.12 11.12 11.87 0.00 N.A. -2.06
PFSB PennFed Fin. Services of NJ 14.94 5,077 75.9 16.00 13.37 15.25 -2.03 N.A. 1.29
PWBC PennFirst Bancorp of PA 13.75 3,996 54.9 13.75 11.87 13.75 0.00 72.31 1.85
PBKB People's SB of Brockton MA* 9.50 3,340 31.7 10.50 6.88 9.50 0.00 59.93 -9.52
PFDC Peoples Bancorp of Auburn IN 19.50 2,356 45.9 22.50 18.75 20.00 -2.50 11.43 -5.43
PBCT Peoples Bank, MHC of CT(32.3)* 21.12 39,166 249.5 23.12 17.44 21.62 -2.31 168.36 11.16
PHBK Peoples Heritage Fin Grp of ME* 19.50 17,028 332.0 22.75 16.50 20.25 -3.70 27.37 -14.29
PBNB Peoples Sav. Fin. Corp. of CT* 21.75 1,915 41.7 22.37 19.00 22.00 -1.14 120.36 12.99
PERM Permanent Bancorp of IN 15.75 2,135 33.6 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 14.50 17.00 0.00 N.A. 3.03
PCBC Perry Co. Fin. Corp. of MO 16.25 856 13.9 21.50 15.25 17.75 -8.45 N.A. -16.67
PHFC Pittsburgh Home Fin. of PA 9.75 2,182 21.3 11.12 9.75 10.37 -5.98 N.A. N.A.
PFSL Pocahnts Fed, MHC of AR (46.4) 14.50 1,610 10.8 17.25 11.00 14.75 -1.69 N.A. -8.63
POBS Portsmouth Bank Shrs Inc of NH(8)* 13.00 5,737 74.6 15.20 11.40 13.62 -4.55 24.88 -13.74
PKPS Poughkeepsie SB of NY 5.06 12,535 63.4 5.75 4.62 5.12 -1.17 -34.71 -3.62
PRBC Prestige Bancorp of PA 9.87 963 9.5 10.50 9.75 10.25 -3.71 N.A. N.A.
PETE Primary Bank of NH* 12.12 1,953 23.7 15.50 11.75 12.37 -2.02 N.A. -3.96
PSAB Prime Bancorp, Inc. of PA 18.50 3,725 68.9 20.68 17.05 18.12 2.10 166.57 -8.64
PFNC Progress Financial Corp. of PA 6.25 3,730 23.3 7.25 5.12 6.25 0.00 -43.23 11.01
PSBK Progressive Bank, Inc. of NY* 28.00 2,631 73.7 29.75 24.25 29.06 -3.65 109.42 -5.08
PROV Provident Fin. Holdings of CA 10.50 5,134 53.9 11.00 10.37 10.81 -2.87 N.A. N.A.
PULB Pulaski SB, MHC of MO (29.0) 13.25 2,094 8.0 16.50 11.75 14.00 -5.36 N.A. -11.67
PULS Pulse Bancorp of S. River NJ 17.75 3,886 69.0 18.00 14.50 18.00 -1.39 43.49 4.41
QCFB QCF Bancorp of Virginia MN 15.25 1,783 27.2 15.25 12.25 15.25 0.00 N.A. 3.39
QCBC Quaker City Bancorp of CA 12.87 3,928 50.6 14.75 12.37 13.62 -5.51 71.60 -7.21
QCSB Queens County SB of NY* 47.00 6,110 287.2 49.00 31.75 48.37 -2.83 N.A. 18.81
RCSB RCSB Financial, Inc. of NY* 25.75 12,409 319.5 26.87 20.12 25.75 0.00 109.18 8.42
RARB Raritan Bancorp. of Raritan NJ* 20.50 1,427 29.3 22.50 20.25 20.25 1.23 110.26 -4.65
REDF RedFed Bancorp of Redlands CA 8.50 4,060 34.5 10.62 7.75 8.56 -0.70 N.A. -16.01
RELY Reliance Bancorp of NY 16.00 9,226 147.6 16.50 13.12 16.12 -0.74 N.A. 9.44
RELI Reliance Bancshares Inc of WI* 8.37 2,562 21.4 8.50 7.50 8.13 2.95 N.A. N.A.
RFED Roosevelt Fin. Grp. Inc. of MO 17.37 42,118 731.6 19.75 15.25 17.69 -1.81 345.38 -10.33
RVSB Rvrview SB,FSB MHC of WA(40.3) 14.37 2,155 11.3 17.00 11.82 14.37 0.00 N.A. -1.17
SCCB S. Carolina Comm. Bnshrs of SC 16.00 747 12.0 20.50 16.00 16.12 -0.74 N.A. -11.70
SBFL SB Fing. Lakes MHC of NY(33.0) 16.00 1,785 9.4 16.75 10.25 16.50 -3.03 N.A. -1.54
SFED SFS Bancorp of Schenectady NY 12.25 1,395 17.1 13.50 11.12 12.50 -2.00 N.A. -5.77
SGVB SGV Bancorp of W. Covina CA 8.25 2,728 22.5 10.12 8.00 8.50 -2.94 N.A. -15.38
SISB SIS Bank of Sprinfield MA* 17.62 5,718 100.8 18.75 13.25 17.75 -0.73 N.A. 7.64
SJSB SJS Bancorp of St. Joseph MI 20.70 983 20.3 20.75 15.12 20.25 2.22 N.A. 4.81
SWCB Sandwich Co-Op. Bank of MA* 20.25 1,873 37.9 21.50 16.50 20.25 0.00 134.92 10.96
SFBM Security Bancorp of MT 20.87 1,462 30.5 21.25 19.87 20.37 2.45 169.29 -0.62
SECP Security Capital Corp. of WI 59.75 9,536 569.8 62.50 49.75 59.00 1.27 N.A. -0.83
SFSL Security First Corp. of OH 13.50 3,532 47.7 15.75 11.50 13.50 0.00 -14.29 -5.26
SHFC Seven Hills Fin. Corp. of OH(8) 18.12 536 9.7 18.12 14.37 18.12 0.00 20.80 24.97
SMFC Sho-Me Fin. Corp. of MO 16.00 1,821 29.1 16.75 14.50 16.25 -1.54 N.A. 6.67
SOBI Sobieski Bancorp of S. Bend IN 12.12 837 10.1 13.25 10.75 12.50 -3.04 N.A. -6.77
SOSA Somerset Savings Bank of MA(8)* 1.50 16,652 25.0 1.88 1.12 1.50 0.00 -70.70 9.49
SMBC Southern Missouri Bncrp of MO 14.12 1,724 24.3 17.50 13.50 14.75 -4.27 N.A. -5.87
SWBI Southwest Bancshares of IL 27.00 1,794 48.4 28.25 26.00 27.12 -0.44 170.00 1.89
SVRN Sovereign Bancorp of PA 10.00 47,838 478.4 11.25 9.05 9.87 1.32 123.71 3.73
STFR St. Francis Cap. Corp. of WI 25.50 5,857 149.4 28.00 20.00 25.00 2.00 N.A. 9.68
SPBC St. Paul Bancorp, Inc. of IL 22.62 18,550 419.6 26.62 22.62 22.75 -0.57 34.08 -11.29
</TABLE>
<TABLE>
<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)
---------------------------------------
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
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 0.59 0.58 19.44 19.18 185.43
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
PRBC Prestige Bancorp of PA 0.41 0.41 15.66 15.66 106.41
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 15.43 14.43 163.48
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
PROV Provident Fin. Holdings of CA 0.18 0.50 16.29 16.29 117.23
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* 2.84 2.82 24.17 23.36 331.30
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 2.37 2.36 23.38 23.38 194.84
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
</TABLE>
<PAGE>
RP FINANCIAL, LC.
-----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part One
Prices As Of July 12, 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)
---------------------------------------
STND Standard Fin. of Chicago IL 16.12 16,765 270.3 16.50 13.19 16.37 -1.53 N.A. 10.26
SFFC StateFed Financial Corp. of IA 15.75 823 13.0 19.75 15.50 16.12 -2.30 N.A. -13.08
SFIN Statewide Fin. Corp. of NJ 11.25 5,270 59.3 13.75 11.25 12.25 -8.16 N.A. -13.86
STSA Sterling Financial Corp. of WA 13.75 5,426 74.6 15.00 10.23 14.75 -6.78 51.27 0.00
SSBK Strongsville SB of OH 21.00 2,531 53.2 21.75 17.50 20.50 2.44 N.A. 7.69
SFSB SuburbFed Fin. Corp. of IL 16.75 1,261 21.1 18.17 16.00 17.25 -2.90 151.12 1.52
SBCN Suburban Bancorp. of OH 15.00 1,481 22.2 18.50 14.25 15.50 -3.23 N.A. -18.92
SCSL Suncoast S&LA of Hollywood FL 6.25 1,990 12.4 7.19 5.75 6.12 2.12 -8.22 0.00
THRD TF Financial Corp. of PA 14.25 4,523 64.5 16.00 13.87 14.37 -0.84 N.A. -7.29
ROSE TR Financial Corp. of NY 26.50 8,948 237.1 27.75 17.37 27.50 -3.64 N.A. 3.92
TPNZ Tappan Zee Fin. Corp. of NY 11.62 1,620 18.8 13.00 11.25 11.62 0.00 N.A. -7.92
PTRS The Potters S&L Co. of OH 16.12 533 8.6 18.50 16.00 16.12 0.00 N.A. -5.51
THIR Third Financial Corp. of OH(8) 32.00 1,136 36.4 32.00 18.50 31.62 1.20 N.A. 21.90
TSBS Trenton SB, FSB MHC of NJ(35.0) 12.62 8,912 39.3 15.00 11.37 12.75 -1.02 N.A. -2.92
TRIC Tri-County Bancorp of WY 18.00 631 11.4 18.50 13.87 18.00 0.00 N.A. 9.09
THBC Troy Hill Bancorp of PA 13.00 1,068 13.9 14.00 11.87 13.25 -1.89 N.A. 0.00
TWIN Twin City Bancorp of TN 16.25 898 14.6 18.25 13.50 17.50 -7.14 N.A. -4.41
UFRM United FS&LA of Rocky Mount NC 8.25 3,065 25.3 8.50 6.00 8.25 0.00 153.85 10.00
UBMT United SB, FA of MT 18.00 1,223 22.0 18.75 17.00 18.75 -4.00 71.43 2.86
VABF Va. Beach Fed. Fin. Corp of VA 7.00 4,962 34.7 9.94 6.81 7.00 0.00 49.25 -9.68
VAFD Valley FSB of Sheffield AL(8) 31.00 367 11.4 35.25 24.87 32.00 -3.13 195.24 -11.43
VFFC Virginia First Savings of VA 11.37 5,615 63.8 14.25 9.25 12.00 -5.25 ***.** 0.00
WBCI WFS Bancorp of Wichita KS(8) 22.87 1,561 35.7 23.06 18.75 23.06 -0.82 N.A. 3.39
WHGB WHG Bancshares of MD 11.25 1,620 18.2 11.75 10.87 11.06 1.72 N.A. N.A.
WSFS WSFS Financial Corp. of DE* 6.88 14,179 97.6 10.00 6.25 7.37 -6.65 -5.10 -23.56
WVFC WVS Financial Corp. of PA* 20.50 1,736 35.6 22.25 16.00 20.50 0.00 N.A. 7.22
WLDN Walden Bancorp of MA* 20.00 5,312 106.2 20.75 15.75 20.25 -1.23 180.90 5.26
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 21.12 42,246 892.2 23.46 19.32 20.12 4.97 44.76 -9.36
WAMU Washington Mutual Inc. of WA(8)* 29.62 72,007 2,132.8 32.00 22.75 30.50 -2.89 59.59 2.60
WYNE Wayne Bancorp of NJ 10.75 2,231 24.0 11.75 10.75 11.25 -4.44 N.A. N.A.
WAYN Wayne S&L Co., MHC of OH(46.7) 20.00 1,492 13.2 22.00 17.14 20.00 0.00 N.A. -8.72
WCFB Webster CityFSB,MHC of IA(45.2) 12.75 2,100 12.1 13.50 9.75 12.69 0.47 N.A. 2.00
WBST Webster Financial Corp. of CT 29.00 8,104 235.0 30.50 23.37 28.75 0.87 207.20 -1.69
WEFC Wells Fin. Corp. of Wells MN 11.37 2,188 24.9 11.75 9.06 11.62 -2.15 N.A. 3.36
WCBI WestCo Bancorp of IL 21.00 2,678 56.2 22.00 15.17 21.00 0.00 110.00 17.78
WSTR WesterFed Fin. Corp. of MT 14.50 4,396 63.7 17.12 14.00 14.62 -0.82 N.A. -12.76
WOFC Western Ohio Fin. Corp. of OH 20.00 2,309 46.2 24.37 20.00 23.00 -13.04 N.A. -13.98
WWFC Westwood Fin. Corp. of NJ 10.50 647 6.8 11.00 10.25 10.62 -1.13 N.A. N.A.
WFCO Winton Financial Corp. of OH(8) 13.75 1,986 27.3 15.00 10.87 13.50 1.85 N.A. 26.49
FFWD Wood Bancorp of OH 19.75 1,034 20.4 19.75 14.25 19.50 1.28 N.A. 9.72
WCHI Workingmens Cap. Hldgs of IN(8) 20.62 1,798 37.1 20.62 15.50 20.62 0.00 312.40 17.83
YFCB Yonkers Fin. Corp. of NY 9.75 3,571 34.8 10.12 9.31 10.12 -3.66 N.A. N.A.
YFED York Financial Corp. of PA 16.75 6,050 101.3 18.86 14.89 16.75 0.00 77.25 -0.71
</TABLE>
<TABLE>
<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)
---------------------------------------
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
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 1.90 1.82 14.16 13.47 116.67
WAMU Washington Mutual Inc. of WA(8)* 2.62 2.61 19.33 17.19 310.31
WYNE Wayne Bancorp of NJ 0.54 0.65 16.17 16.17 96.07
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>
RP FINANCIAL, LC.
- -------------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit IV-1
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios
----------------------------------------------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- ---------------
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5)
- --------------------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%)
Market Averages. SAIF-Insured Thrifts(no MHCs)
- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(330) 13.38 13.18 0.87 8.04 7.01 0.81 7.24
NYSE Traded Companies(12) 6.30 5.95 0.70 11.73 8.23 0.58 9.65
AMEX Traded Companies(17) 18.41 18.32 0.83 6.71 5.45 0.80 6.35
NASDAQ Listed OTC Companies(301) 13.40 13.19 0.88 7.96 7.05 0.82 7.19
California Companies(26) 7.88 7.74 0.33 5.02 3.80 0.28 4.08
Florida Companies(9) 7.64 7.46 0.75 12.70 9.97 0.53 6.73
Mid-Atlantic Companies(68) 11.94 11.56 0.84 8.68 7.89 0.82 8.34
Mid-West Companies(152) 14.87 14.74 0.94 7.76 6.94 0.87 7.02
New England Companies(9) 8.08 7.66 0.63 8.69 8.50 0.53 7.21
North-West Companies(6) 11.43 11.11 1.01 10.28 6.79 0.93 9.05
South-East Companies(45) 15.60 15.43 1.02 8.76 6.92 0.97 8.15
South-West Companies(7) 12.44 12.33 0.72 7.26 8.24 0.68 6.75
Western Companies (Excl CA)(8) 17.09 16.91 1.04 7.61 6.38 0.99 7.17
Thrift Strategy(254) 14.93 14.75 0.87 6.99 6.40 0.83 6.56
Mortgage Banker Strategy(41) 7.75 7.40 0.82 11.50 9.26 0.63 8.18
Real Estate Strategy(16) 9.24 9.13 0.91 10.74 9.11 0.93 10.98
Diversified Strategy(15) 7.96 7.77 0.97 12.93 8.24 0.92 12.64
Retail Banking Strategy(4) 9.43 9.18 0.73 9.92 10.16 0.58 7.67
Companies Issuing Dividends(250) 13.59 13.37 0.95 8.66 7.46 0.89 7.88
Companies Without Dividends(80) 12.71 12.56 0.60 6.09 5.62 0.57 5.27
Equity/Assets (less than)6%(29) 4.97 4.72 0.52 10.67 7.51 0.41 8.07
Equity/Assets 6-12%(149) 8.62 8.29 0.84 10.24 8.59 0.76 9.10
Equity/Assets (greater than)12%(152) 19.55 19.48 0.96 5.43 5.41 0.94 5.31
Converted Last 3 Mths (no MHC)(15) 17.91 17.49 0.73 4.12 5.45 0.75 4.28
Actively Traded Companies(53) 8.62 8.35 0.92 11.36 8.54 0.88 10.63
Market Value Below $20 Million(85) 15.65 15.58 0.81 6.57 6.80 0.73 5.24
Holding Company Structure(283) 13.99 13.79 0.86 7.61 6.73 0.82 6.99
Assets Over $1 Billion(64) 8.40 7.88 0.83 10.80 8.27 0.76 9.86
Assets $500 Million-$1 Billion(57) 11.53 11.31 0.84 8.57 7.01 0.81 8.00
Assets $250-$500 Million(78) 11.41 11.22 0.83 8.43 7.59 0.74 6.87
Assets less than $250 Million(131) 17.93 17.90 0.91 6.15 6.03 0.87 5.77
Goodwill Companies(136) 9.39 8.90 0.82 9.57 7.78 0.74 8.38
Non-Goodwill Companies(194) 16.22 16.22 0.90 6.96 6.47 0.86 6.44
Acquirors of FSLIC Cases(14) 7.06 6.69 0.88 12.91 10.06 0.85 12.17
<CAPTION>
Asset Quality Ratios Pricing Ratios
----------------------- -----------------------------------------
Price/ Price/
NPAs Resvs/ Resvs/ Price/ Price/ Price/ Tang. Core
Financial Institution Assets NPAs Loans Earning Book Assets Book Earnings
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (X) (%) (%) (%) (x)
Market Averages. SAIF-Insured Thrifts(no MHCs)
- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(330) 0.97 123.41 0.87 13.96 101.47 12.79 104.69 14.86
NYSE Traded Companies(12) 1.58 62.19 1.33 12.47 130.84 8.42 138.79 14.02
AMEX Traded Companies(17) 0.61 132.94 0.70 15.07 93.81 16.24 94.50 16.40
NASDAQ Listed OTC Companies(301) 0.96 125.94 0.86 13.99 100.62 12.78 103.79 14.82
California Companies(26) 2.33 50.09 1.31 13.32 96.81 7.27 99.31 15.45
Florida Companies(9) 1.08 87.23 1.01 11.17 104.45 7.69 107.08 13.42
Mid-Atlantic Companies(68) 1.20 91.85 1.07 13.06 98.18 11.04 103.46 13.82
Mid-West Companies(152) 0.60 159.91 0.70 14.56 100.78 14.08 102.87 15.47
New England Companies(9) 1.35 49.90 1.10 11.40 94.10 7.45 103.65 13.05
North-West Companies(6) 0.93 78.60 0.66 15.72 139.63 14.26 148.04 15.31
South-East Companies(45) 1.03 121.14 0.87 14.34 111.18 16.09 113.74 14.73
South-West Companies(7) 0.94 41.42 0.86 13.33 80.09 9.72 83.91 14.25
Western Companies (Excl CA)(8) 0.26 211.26 0.67 15.14 102.45 16.14 104.58 16.06
Thrift Strategy(254) 0.86 132.31 0.80 14.78 96.48 13.77 98.88 15.42
Mortgage Banker Strategy(41) 1.32 75.84 0.94 10.95 115.05 8.90 123.27 13.09
Real Estate Strategy(16) 1.86 84.24 1.52 12.53 106.65 9.58 107.89 12.76
Diversified Strategy(15) 1.02 152.83 1.27 11.96 145.49 11.49 150.18 12.36
Retail Banking Strategy(4) 1.37 76.19 0.92 12.08 88.70 8.26 91.57 15.74
Companies Issuing Dividends(250) 0.82 134.26 0.84 13.88 105.81 13.50 109.47 14.76
Companies Without Dividends(80) 1.45 89.33 0.98 14.33 87.90 10.60 89.75 15.25
Equity/Assets (less than)6%(29) 1.74 83.49 1.06 10.73 116.66 5.84 125.47 12.57
Equity/Assets 6-12%(149) 1.14 117.63 1.01 12.35 111.14 9.45 116.06 13.28
Equity/Assets (greater than)12%(152) 0.64 138.15 0.70 16.61 89.27 17.34 89.80 17.12
Converted Last 3 Mths (no MHC)(15) 1.01 128.50 0.72 16.22 74.92 13.65 78.44 16.26
Actively Traded Companies(53) 1.49 89.61 1.01 11.48 122.56 10.39 129.33 12.14
Market Value Below $20 Million(85) 0.88 112.61 0.70 14.59 85.53 13.16 86.14 15.69
Holding Company Structure(283) 0.93 125.00 0.84 14.37 100.58 13.25 103.84 15.12
Assets Over $1 Billion(64) 1.17 101.52 1.03 12.24 121.82 9.90 131.93 13.26
Assets $500 Million-$1 Billion(57) 1.30 134.14 1.01 13.47 103.34 11.59 106.72 14.52
Assets $250-$500 Million(78) 0.94 129.94 0.90 13.41 102.38 11.22 104.26 14.65
Assets less than $250 Million(131) 0.73 126.25 0.71 15.66 89.57 15.75 89.95 16.16
Goodwill Companies(136) 1.14 104.97 0.95 12.64 110.86 10.12 118.63 13.84
Non-Goodwill Companies(194) 0.85 137.60 0.82 15.03 94.79 14.70 94.79 15.66
Acquirors of FSLIC Cases(14) 1.52 51.96 0.92 10.54 125.94 8.82 133.32 12.20
<CAPTION>
Dividend Data(6)
-------------------------
Ind. Divi-
Div./ dend Payout
Financial Institution Share Yield Ratio(7)
- --------------------- ------- ------- --------
($) (%) (%)
Market Averages. SAIF-Insured Thrifts(no MHCs)
- ---------------------------------------------
<S> <C> <C> <C>
SAIF-Insured Thrifts(330) 0.34 1.92 26.40
NYSE Traded Companies(12) 0.42 1.54 16.50
AMEX Traded Companies(17) 0.37 2.52 29.54
NASDAQ Listed OTC Companies(301) 0.33 1.90 26.75
California Companies(26) 0.26 1.12 15.32
Florida Companies(9) 0.16 0.90 11.11
Mid-Atlantic Companies(68) 0.30 1.70 21.99
Mid-West Companies(152) 0.34 1.95 27.57
New England Companies(9) 0.48 2.73 32.40
North-West Companies(6) 0.34 1.66 22.59
South-East Companies(45) 0.40 2.47 34.65
South-West Companies(7) 0.30 2.18 21.99
Western Companies (Excl CA)(8) 0.47 2.80 45.13
Thrift Strategy(254) 0.34 2.01 29.07
Mortgage Banker Strategy(41) 0.33 1.56 16.77
Real Estate Strategy(16) 0.18 0.91 9.57
Diversified Strategy(15) 0.60 2.50 28.38
Retail Banking Strategy(4) 0.14 1.34 18.06
Companies Issuing Dividends(250) 0.45 2.54 35.28
Companies Without Dividends(80) 0.00 0.00 0.00
Equity/Assets (less than)6%(29) 0.24 1.20 13.53
Equity/Assets 6-12%(149) 0.37 1.89 23.11
Equity/Assets (greater than)12%(152) 0.32 2.09 32.56
Converted Last 3 Mths (no MHC)(15) 0.02 0.16 2.01
Actively Traded Companies(53) 0.51 2.23 26.11
Market Value Below $20 Million(85) 0.26 1.74 25.68
Holding Company Structure(283) 0.35 1.97 27.49
Assets Over $1 Billion(64) 0.47 1.99 23.51
Assets $500 Million-$1 Billion(57) 0.29 1.61 22.76
Assets $250-$500 Million(78) 0.33 2.00 25.75
Assets less than $250 Million(131) 0.30 1.98 30.25
Goodwill Companies(136) 0.39 1.93 24.40
Non-Goodwill Companies(194) 0.30 1.91 27.91
Acquirors of FSLIC Cases(14) 0.43 2.06 21.26
</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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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>
Market Averages. BIF-Insured Thrifts(no MHCs)
- ---------------------------------------------
BIF-Insured Thrifts(71) 10.48 10.18 0.90 10.43 8.35 0.87 9.91 1.79 91.38 1.51
NYSE Traded Companies(3) 7.10 5.57 0.46 5.41 5.13 0.52 6.34 2.79 30.49 1.33
AMEX Traded Companies(4) 12.21 11.77 0.75 8.27 7.67 0.53 5.60 3.55 30.39 1.35
NASDAQ Listed OTC Companies(63) 10.55 10.32 0.97 11.33 9.05 0.93 10.59 1.61 97.43 1.52
California Companies(2) 6.78 6.77 0.61 11.41 6.76 0.51 9.40 4.57 31.17 1.83
Mid-Atlantic Companies(19) 10.53 10.22 0.85 10.10 8.25 0.82 9.36 1.98 77.30 1.45
Mid-West Companies(1) 56.23 56.23 1.47 2.62 3.46 1.47 2.62 0.00 0.00 0.49
New England Companies(44) 9.04 8.69 0.88 10.50 8.51 0.87 10.21 1.68 86.92 1.62
North-West Companies(4) 16.21 16.21 1.19 11.16 8.10 1.18 11.03 0.21 321.71 0.92
South-West Companies(1) 8.65 8.35 1.54 17.77 12.72 1.20 13.90 0.42 127.82 0.78
Thrift Strategy(44) 11.91 11.57 0.88 9.34 7.70 0.88 9.26 1.71 85.39 1.47
Mortgage Banker Strategy(11) 7.24 6.88 0.76 10.13 8.47 0.75 10.11 1.16 129.18 1.22
Real Estate Strategy(7) 9.61 9.56 1.24 14.45 10.01 1.12 12.71 2.07 95.15 1.73
Diversified Strategy(7) 7.00 6.75 1.21 19.14 14.52 1.00 15.23 3.12 85.00 2.23
Retail Banking Strategy(2) 6.32 6.16 0.05 0.82 0.95 0.05 0.86 1.31 68.51 1.24
Companies Issuing Dividends(48) 9.29 8.90 1.02 11.58 9.37 0.98 11.01 1.20 107.70 1.41
Companies Without Dividends(23) 12.91 12.78 0.64 8.08 6.26 0.65 7.66 3.39 47.83 1.71
Equity/Assets (less than)6%(8) 5.38 5.31 0.74 14.03 10.00 0.58 10.93 3.69 44.18 1.81
Equity/Assets 6-12%(52) 8.36 7.97 0.90 11.04 8.89 0.88 10.71 1.64 91.49 1.54
Equity/Assets (greater than)12%(11) 23.69 23.69 0.97 5.38 4.76 0.99 5.44 1.31 137.58 1.19
Converted Last 3 Mths (no MHC)(3) 31.17 31.17 0.30 -3.39 -3.50 0.86 2.19 5.43 32.22 1.44
Actively Traded Companies(29) 8.59 8.20 0.90 10.57 8.87 0.89 10.46 1.32 94.12 1.54
Market Value Below $20 Million(12) 9.85 9.61 0.80 9.69 8.48 0.72 8.64 1.59 90.72 1.34
Holding Company Structure(44) 11.73 11.48 1.05 11.51 9.31 1.01 10.78 1.52 101.32 1.58
Assets Over $1 Billion(16) 8.14 7.57 0.99 12.82 9.89 0.94 11.72 2.17 72.82 1.61
Assets $500 Million-$1 Billion(18) 10.17 9.90 0.76 9.07 6.61 0.78 9.11 1.48 107.56 1.61
Assets $250-$500 Million(22) 10.17 9.94 0.89 10.50 8.59 0.88 10.14 2.02 80.14 1.51
Assets less than $250 Million(15) 13.39 13.20 0.94 9.48 8.32 0.88 8.71 1.40 110.08 1.31
Goodwill Companies(35) 7.98 7.36 0.83 10.68 8.63 0.75 9.45 1.53 81.79 1.43
Non-Goodwill Companies(36) 12.82 12.82 0.96 10.20 8.08 0.98 10.34 2.05 100.62 1.59
<CAPTION>
Pricing Ratios Dividend Data(6)
----------------------------------------- ---------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- ------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
Market Averages. BIF-Insured Thrifts(no MHCs)
- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BIF-Insured Thrifts(71) 11.19 109.74 10.82 114.14 11.67 0.36 1.89 21.62
NYSE Traded Companies(3) 15.96 103.09 7.14 127.34 13.21 0.27 0.97 13.14
AMEX Traded Companies(4) 10.86 98.32 11.01 104.40 12.79 0.34 1.34 16.83
NASDAQ Listed OTC Companies(63) 11.02 111.32 11.05 114.61 11.56 0.37 2.02 22.48
California Companies(2) 9.14 100.37 6.92 100.43 11.33 0.00 0.00 0.00
Mid-Atlantic Companies(19) 12.38 108.31 10.73 113.11 11.88 0.41 1.73 21.05
Mid-West Companies(1) 0.00 75.68 42.55 75.68 0.00 0.00 0.00 0.00
New England Companies(44) 10.87 111.71 9.80 116.60 11.73 0.37 2.12 23.34
North-West Companies(4) 9.91 106.88 16.48 106.88 9.97 0.27 2.07 29.30
South-West Companies(1) 7.86 123.26 10.66 127.62 10.05 0.16 1.64 12.90
Thrift Strategy(44) 11.65 107.83 11.81 112.73 12.12 0.39 2.05 24.57
Mortgage Banker Strategy(11) 11.55 111.13 8.05 116.18 11.42 0.30 1.47 16.43
Real Estate Strategy(7) 10.64 123.31 12.13 124.03 11.78 0.37 1.66 16.68
Diversified Strategy(7) 8.07 113.78 7.98 118.04 8.92 0.23 1.63 13.86
Retail Banking Strategy(2) 0.00 92.74 5.86 95.05 0.00 0.32 1.78 0.00
Companies Issuing Dividends(48) 10.80 114.73 10.52 120.42 11.21 0.53 2.82 31.11
Companies Without Dividends(23) 12.32 99.52 11.45 101.26 12.95 0.00 0.00 0.00
Equity/Assets (less than)6%(8) 11.83 116.93 6.26 118.61 12.41 0.05 0.49 6.31
Equity/Assets 6-12%(52) 10.72 113.25 9.44 118.90 11.27 0.42 2.27 25.00
Equity/Assets (greater than)12%(11) 14.74 88.60 20.19 88.60 14.39 0.23 0.94 15.32
Converted Last 3 Mths (no MHC)(3) 21.28 78.63 23.72 78.63 18.52 0.00 0.00 0.00
Actively Traded Companies(29) 11.36 111.33 9.51 116.68 11.54 0.45 2.43 25.48
Market Value Below $20 Million(12) 10.91 101.88 9.40 105.40 12.31 0.21 1.45 13.29
Holding Company Structure(44) 10.92 109.40 12.06 112.95 11.22 0.39 2.04 23.49
Assets Over $1 Billion(16) 11.06 116.76 9.60 125.69 10.87 0.46 1.71 19.27
Assets $500 Million-$1 Billion(18) 11.20 111.48 10.96 115.33 12.33 0.45 2.23 27.91
Assets $250-$500 Million(22) 11.53 109.40 10.45 112.22 11.68 0.32 2.01 23.89
Assets less than $250 Million(15) 10.86 101.90 12.34 104.72 11.91 0.23 1.58 14.93
Goodwill Companies(35) 11.62 111.57 8.88 120.64 12.31 0.46 2.28 27.06
Non-Goodwill Companies(36) 10.77 108.03 12.66 108.03 11.06 0.27 1.53 16.70
</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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- NPAs Resvs/ Resvs/
Financial Institution Assets Assets ROA(5) ROE(5) ROI(5) ROA(5) ROE(5) Assets NPAs Loans
- --------------------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Market Averages. MHC Institutions
- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(18) 11.89 11.67 0.78 6.84 5.42 0.73 6.57 0.69 83.87 0.82
BIF-Insured Thrifts(2) 10.14 10.14 0.80 9.31 6.25 0.69 7.88 2.36 44.03 1.42
NASDAQ Listed OTC Companies(20) 11.72 11.52 0.78 7.09 5.51 0.73 6.70 0.85 79.44 0.88
Florida Companies(3) 10.30 10.26 0.89 8.83 7.00 0.86 8.60 0.72 107.38 0.97
Mid-Atlantic Companies(8) 12.45 12.12 0.68 5.25 4.20 0.68 5.55 1.11 50.81 0.89
Mid-West Companies(7) 12.13 12.12 0.74 6.66 5.45 0.64 5.90 0.59 94.58 0.76
New England Companies(1) 8.00 8.00 1.11 14.66 9.00 0.89 11.81 1.66 65.45 1.65
North-West Companies(1) 11.02 9.75 1.30 11.97 8.42 1.17 10.78 0.26 119.16 0.51
Thrift Strategy(18) 11.97 11.81 0.74 6.39 5.15 0.70 6.19 0.84 77.83 0.85
Mortgage Banker Strategy(1) 11.02 9.75 1.30 11.97 8.42 1.17 10.78 0.26 119.16 0.51
Diversified Strategy(1) 8.00 8.00 1.11 14.66 9.00 0.89 11.81 1.66 65.45 1.65
Companies Issuing Dividends(20) 11.72 11.52 0.78 7.09 5.51 0.73 6.70 0.85 79.44 0.88
Equity/Assets (less than)6%(1) 5.95 5.95 0.56 9.43 8.48 0.58 9.66 0.26 146.44 1.14
Equity/Assets 6-12%(12) 9.93 9.69 0.68 7.17 5.41 0.68 7.14 0.89 87.47 0.90
Equity/Assets (greater than)12%(7) 15.61 15.44 1.00 6.61 5.25 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 3.69 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(3) 10.25 9.95 0.95 9.86 6.64 0.87 8.88 1.13 67.59 1.17
Assets $500 Million-$1 Billion(6) 11.26 10.96 0.90 7.95 6.29 0.83 7.78 0.76 81.42 0.95
Assets $250-$500 Million(3) 10.24 10.22 0.74 7.85 6.90 0.73 7.72 0.15 187.85 0.64
Assets less than $250 Million(8) 13.17 13.01 0.65 5.11 3.97 0.60 4.70 1.09 51.85 0.80
Goodwill Companies(9) 11.19 10.75 0.95 8.90 6.73 0.82 7.79 0.68 93.85 0.80
Non-Goodwill Companies(11) 12.15 12.15 0.65 5.60 4.50 0.66 5.82 0.99 65.03 0.94
MHC Institutions(20) 11.72 11.52 0.78 7.09 5.51 0.73 6.70 0.85 79.44 0.88
<CAPTION>
Pricing Ratios Dividend Data(6)
--------------------------------------- -----------------------
Price/ Price/ Ind. Divi-
Price/ Price/ Price/ Tang. Core Div./ dend Payout
Financial Institution Earning Book Assets Book Earnings Share Yield Ratio(7)
- --------------------- ------- ------- ------- ------- -------- ------- ------- -------
(X) (%) (%) (%) (x) ($) (%) (%)
Market Averages. MHC Institutions
- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SAIF-Insured Thrifts(18) 16.47 118.28 14.13 120.98 17.55 0.61 4.02 41.45
BIF-Insured Thrifts(2) 11.12 131.22 12.92 131.22 13.80 0.58 3.69 42.11
NASDAQ Listed OTC Companies(20) 16.13 119.57 14.01 122.01 17.32 0.61 3.99 41.53
Florida Companies(3) 14.82 116.97 11.87 117.38 15.42 0.87 4.93 55.81
Mid-Atlantic Companies(8) 16.00 116.57 14.56 120.26 18.17 0.44 3.22 35.56
Mid-West Companies(7) 18.44 117.75 14.48 117.83 18.96 0.72 4.84 54.74
New England Companies(1) 11.12 149.58 11.96 149.58 13.80 0.80 3.79 42.11
North-West Companies(1) 11.88 134.17 14.78 151.58 13.18 0.22 1.53 18.18
Thrift Strategy(18) 16.80 117.09 14.08 118.83 17.86 0.62 4.13 45.33
Mortgage Banker Strategy(1) 11.88 134.17 14.78 151.58 13.18 0.22 1.53 18.18
Diversified Strategy(1) 11.12 149.58 11.96 149.58 13.80 0.80 3.79 42.11
Companies Issuing Dividends(20) 16.13 119.57 14.01 122.01 17.32 0.61 3.99 41.53
Equity/Assets (less than)6%(1) 11.79 106.30 6.32 106.30 11.51 0.80 5.52 65.04
Equity/Assets 6-12%(12) 14.69 121.27 12.02 124.44 16.35 0.60 3.46 38.98
Equity/Assets (greater than)12%(7) 19.02 118.55 18.52 120.08 20.42 0.60 4.66 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 96.94 11.43 96.94 0.00 0.40 3.08 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(3) 16.26 137.01 13.84 140.28 17.26 0.56 3.34 41.60
Assets $500 Million-$1 Billion(6) 13.83 110.01 12.45 113.50 16.61 0.64 3.92 40.47
Assets $250-$500 Million(3) 14.90 109.99 11.26 110.18 15.25 0.72 4.36 54.74
Assets less than $250 Million(8) 19.10 123.79 16.28 125.97 19.96 0.56 4.14 18.18
Goodwill Companies(9) 14.72 120.81 13.38 126.23 16.40 0.49 3.07 35.24
Non-Goodwill Companies(11) 17.54 118.55 14.53 118.55 18.23 0.71 4.74 60.43
MHC Institutions(20) 16.13 119.57 14.01 122.01 17.32 0.61 3.99 41.53
</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>
<TABLE>
<CAPTION>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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>
NYSE Traded Companies
- ---------------------
AHM Ahmanson and Co. H.F. of CA 4.61 4.32 0.80 17.30 14.60 0.10 2.09 2.30 33.64 1.25
CAL CalFed Inc. of Los Angeles CA 4.36 4.36 0.58 13.97 9.73 0.55 13.14 1.61 77.66 1.85
CSA Coast Savings Financial of CA 5.16 5.08 0.46 9.62 6.80 0.40 8.33 1.62 48.77 1.17
CFB Commercial Federal Corp. of NE 6.05 5.43 0.84 15.46 9.61 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 5.44 0.46 9.54 NA NA 1.24
DSL Downey Financial Corp. of CA 8.33 8.18 0.61 7.57 8.00 0.53 6.62 2.03 29.06 0.66
FRC First Republic Bancorp of CA* 5.65 5.64 0.14 2.38 2.57 0.13 2.31 2.64 36.28 1.09
FED FirstFed Fin. Corp. of CA 4.69 4.61 0.18 3.94 4.09 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 2.43 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 8.36 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 8.78 0.54 10.01 1.81 43.93 1.15
GPT GreenPoint Fin. Corp. of NY* 10.58 6.03 0.92 6.87 7.38 0.96 7.17 2.94 24.69 1.67
SFB Standard Fed. Bancorp of MI 6.96 5.93 0.94 13.84 10.18 0.85 12.50 0.45 59.52 0.38
TCB TCF Financial Corp. of MN 7.69 7.35 1.37 20.13 8.33 1.29 19.04 0.92 102.63 1.23
WES Westcorp Inc. of Orange CA 9.89 9.86 1.21 13.72 7.84 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 7.96 0.39 4.36 2.95 33.54 1.46
BFD BostonFed Bancorp of MA 13.51 13.51 0.21 2.42 1.68 0.18 2.05 1.67 40.40 0.85
CFX Cheshire Fin. Corp. of NH* 9.46 8.44 0.99 10.03 8.85 0.82 8.29 NA NA 1.02
CZF Citisave Fin. Corp. of LA 18.18 18.17 1.28 9.16 7.03 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 5.63 0.68 4.37 NA NA 0.24
ESX Essex Bancorp of VA(8) 2.57 -0.08 0.32 7.80 37.02 -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 2.38 0.47 2.50 NA NA 1.31
GAF GA Financial Corp. of PA 22.44 22.44 0.58 4.73 3.07 0.78 6.30 0.19 78.79 0.41
KNK Kankakee Bancorp of IL 9.80 9.09 0.50 4.56 6.09 0.49 4.48 0.59 110.93 1.02
KYF Kentucky First Bancorp of KY 23.62 23.62 1.12 5.40 3.80 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 10.51 1.12 18.82 1.63 45.81 1.22
PDB Piedmont Bancorp of NC 29.77 29.77 1.34 6.02 4.60 1.36 6.12 0.72 65.30 0.66
PLE Pinnacle Bank of AL 8.19 7.90 0.79 10.40 10.29 0.71 9.31 0.22 303.63 1.04
SSB Scotland Bancorp of NC 37.58 37.58 1.09 3.96 3.14 1.09 3.96 NA NA 0.52
SZB SouthFirst Bancshares of AL 14.89 14.89 0.55 3.25 4.40 0.76 4.49 0.56 52.60 0.45
SRN Southern Banc Company of AL 20.38 20.15 0.50 4.33 2.85 0.50 4.33 NA NA 0.25
SSM Stone Street Bancorp of NC 33.68 33.68 0.77 3.04 2.59 0.77 3.04 0.31 126.92 0.60
TSH Teche Holding Company of LA 17.16 17.16 1.17 7.06 7.15 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 9.25 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 3.89 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 8.23 8.23 0.94 12.58 10.48 0.70 9.38 NA NA 0.99
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 7.88 7.88 2.25 35.91 36.33 -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 8.63 0.99 9.39 1.03 70.00 1.09
AMFC AMB Financial Corp. of IN 20.06 20.06 0.49 4.30 3.02 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 5.33 0.24 3.48 0.37 88.30 0.58
AADV Advantage Bancorp of WI 9.77 8.47 0.90 9.33 7.55 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 3.94 0.25 2.43 0.72 61.31 0.55
ATSB AmTrust Capital Corp. of IN 10.34 10.23 0.31 2.75 4.32 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 6.85 122.55 5.65 130.75 NM 0.88 3.52 24.11
CAL CalFed Inc. of Los Angeles CA 10.28 137.42 6.00 137.42 10.92 0.00 0.00 0.00
CSA Coast Savings Financial of CA 14.71 134.34 6.93 136.61 16.99 0.00 0.00 0.00
CFB Commercial Federal Corp. of NE 10.41 135.94 8.22 151.32 10.47 0.40 1.11 11.53
DME Dime Savings Bank, FSB of NY* 18.38 125.25 6.36 126.65 13.44 0.00 0.00 0.00
DSL Downey Financial Corp. of CA 12.50 91.98 7.66 93.62 14.29 0.48 2.29 28.57
FRC First Republic Bancorp of CA* NM 89.78 5.07 89.90 NM 0.00 0.00 0.00
FED FirstFed Fin. Corp. of CA 24.46 94.50 4.43 96.13 21.99 0.00 0.00 0.00
GLN Glendale Fed. Bk, FSB of CA NM 98.63 5.29 107.01 17.42 0.00 0.00 0.00
GDW Golden West Fin. Corp. of CA 11.96 132.87 8.85 141.25 12.10 0.38 0.72 8.60
GWF Great Western Fin. Corp. of CA 11.40 118.78 6.86 135.65 12.50 1.00 4.57 52.08
GPT GreenPoint Fin. Corp. of NY* 13.55 94.24 9.97 165.46 12.97 0.80 2.91 39.41
SFB Standard Fed. Bancorp of MI 9.82 128.25 8.92 150.33 10.88 0.76 1.97 19.39
TCB TCF Financial Corp. of MN 12.00 220.99 16.99 231.09 12.69 0.75 2.25 26.98
WES Westcorp Inc. of Orange CA 12.76 153.82 15.22 154.34 NM 0.38 2.10 26.76
AMEX Traded Companies
- ---------------------
BKC American Bank of Waterbury CT* 12.56 130.98 11.22 138.11 NM 1.36 5.36 67.33
BFD BostonFed Bancorp of MA NM 85.40 11.54 85.40 NM 0.20 1.68 NM
CFX Cheshire Fin. Corp. of NH* 11.30 108.51 10.26 121.61 13.68 0.00 0.00 0.00
CZF Citisave Fin. Corp. of LA 14.22 96.54 17.55 96.60 20.71 0.30 2.07 29.41
CBK Citizens First Fin.Corp. of IL 17.75 71.25 11.09 71.25 16.30 0.00 0.00 0.00
ESX Essex Bancorp of VA(8) 2.70 33.94 0.87 NM NM 0.00 0.00 0.00
FCB Falmouth Co-Op Bank of MA* NM 70.75 17.38 70.75 NM 0.00 0.00 0.00
GAF GA Financial Corp. of PA NM 74.97 16.82 74.97 24.43 0.00 0.00 0.00
KNK Kankakee Bancorp of IL 16.41 76.30 7.48 82.26 16.70 0.40 2.12 34.78
KYF Kentucky First Bancorp of KY NM 105.04 24.81 105.04 NM 0.50 3.33 NM
NYB New York Bancorp, Inc. of NY 9.51 190.50 11.01 190.50 10.03 0.80 3.09 29.41
PDB Piedmont Bancorp of NC 21.76 89.82 26.74 89.82 21.39 0.48 3.80 NM
PLE Pinnacle Bank of AL 9.72 97.19 7.96 100.73 10.86 0.72 4.33 42.11
SSB Scotland Bancorp of NC NM 84.28 31.67 84.28 NM 0.30 2.48 NM
SZB SouthFirst Bancshares of AL 22.73 80.75 12.02 80.75 16.45 0.50 4.00 NM
SRN Southern Banc Company of AL NM 81.37 16.58 82.27 NM 0.35 2.77 NM
SSM Stone Street Bancorp of NC NM 77.55 26.12 77.55 NM 0.44 2.65 NM
TSH Teche Holding Company of LA 13.99 88.70 15.22 88.70 14.30 0.50 3.89 54.35
FTF Texarkana Fst. Fin. Corp of AR 10.81 94.23 19.43 94.23 14.41 0.45 2.81 30.41
THR Three Rivers Fin. Corp. of MI NM 88.05 13.86 88.59 NM 0.30 2.29 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 9.54 113.28 9.32 113.28 12.80 0.10 1.78 16.95
NASDAQ Listed OTC Companies
- ---------------------------
FBCV 1st Bancorp of Vincennes IN 2.75 83.51 6.58 83.51 NM 0.40 1.48 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 11.59 108.65 10.46 123.11 11.59 0.48 1.87 21.72
AMFC AMB Financial Corp. of IN NM 71.33 14.31 71.33 NM 0.00 0.00 0.00
ASBP ASB Financial Corp. of OH 23.44 99.73 23.01 99.73 23.44 0.40 2.67 62.50
ABBK Abington Savings Bank of MA(8)* 18.75 96.49 6.28 110.31 NM 0.40 2.51 47.06
AADV Advantage Bancorp of WI 13.25 119.73 11.70 138.20 14.71 0.32 0.96 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 NM 72.01 7.71 72.01 NM 0.31 1.85 46.97
ATSB AmTrust Capital Corp. of IN 23.14 64.26 6.64 64.95 NM 0.00 0.00 0.00
AHCI Ambanc Holding Co. of NY* NM 68.49 13.13 68.49 NM 0.00 0.00 NM
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700 Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang.
Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
ASBI Ameriana Bancorp of IN 11.64 11.62 0.93 7.22 7.51 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 12.19 0.81 12.48 0.65 46.82 0.50
AMFB American Federal Bank of SC 8.21 7.58 1.29 16.11 9.77 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 3.52 0.33 3.51 1.40 69.89 1.61
ABCW Anchor Bancorp Wisconsin of WI 6.75 6.57 0.87 12.13 8.49 0.85 11.80 0.61 214.80 1.63
ANDB Andover Bancorp, Inc. of MA* 7.60 7.60 0.87 11.60 9.09 0.91 12.17 1.60 63.49 1.46
ASFC Astoria Financial Corp. of NY 8.55 6.95 0.75 8.45 8.44 0.74 8.37 0.85 23.49 0.62
AVND Avondale Fin. Corp. of IL 10.63 10.63 0.65 6.66 7.37 0.45 4.65 0.85 82.48 1.72
BFSI BFS Bankorp, Inc. of NY 8.14 8.14 1.84 24.85 16.21 1.78 24.01 1.48 69.83 1.13
BKCT Bancorp Connecticut of CT* 10.81 10.81 1.18 10.65 7.25 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 3.57 0.41 1.98 0.08 112.71 0.13
BANC BankAtlantic Bancorp of FL 8.33 7.65 0.97 14.59 10.87 0.76 11.35 1.25 91.39 2.12
BKUNA BankUnited SA of FL 6.11 5.77 1.02 26.11 15.45 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 -1.42 0.26 3.66 1.23 76.86 1.33
BFSB Bedford Bancshares of VA 16.11 16.11 1.26 7.57 7.27 1.26 7.57 1.24 43.93 0.64
BSBC Branford SB of CT* 8.69 8.69 0.76 9.05 6.67 0.76 9.05 2.31 87.06 2.77
BRFC Bridgeville SB, FSB of PA(8) 28.51 28.51 1.24 4.21 3.93 1.24 4.21 0.25 102.86 0.70
BYFC Broadway Fin. Corp. of CA 11.42 11.42 0.40 6.29 4.90 0.45 7.06 2.42 34.07 1.05
CBCO CB Bancorp of Michigan City IN 9.16 9.16 1.36 13.92 12.18 1.36 13.92 0.84 77.80 1.45
CCFH CCF Holding Company of GA 21.23 21.23 0.86 5.17 4.97 0.82 4.91 0.63 84.80 0.90
CENF CENFED Financial Corp. of CA 5.00 4.99 0.48 9.87 9.11 0.33 6.81 1.22 54.40 0.89
CFSB CFSB Bancorp of Lansing MI 8.29 8.29 0.94 11.62 7.80 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
CNSB CNS Bancorp of MO 23.07 23.07 0.74 3.20 3.91 0.62 2.70 0.70 53.70 0.60
CSBF CSB Financial Group Inc of IL 30.89 30.89 0.82 3.62 3.46 0.82 3.62 0.78 37.38 0.55
CFHC California Fin. Hld. Co. of CA 6.75 6.69 0.28 4.26 3.44 0.25 3.71 1.26 44.64 0.78
CBCI Calumet Bancorp of Chicago IL 16.99 16.99 1.21 7.25 8.14 1.20 7.22 1.23 82.56 1.36
CAFI Camco Fin. Corp. of OH 8.33 8.33 1.22 15.54 10.49 0.93 11.85 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 9.66 0.95 8.92 0.20 152.91 0.38
CARV Carver FSB of New York, NY 9.45 9.00 0.21 2.19 4.13 0.21 2.19 0.97 33.76 1.44
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 4.70 1.10 3.96 NA NA 1.63
CNIT Cenit Bancorp of Norfolk VA 6.98 6.72 0.42 5.90 4.83 0.49 6.92 0.51 109.75 1.17
CTBK Center Banks, Inc. of NY* 7.08 7.08 0.56 8.10 9.41 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 6.60 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 5.58 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 6.30 1.06 10.20 1.91 33.63 1.30
CBSB Charter Financial Inc. of IL 21.41 20.85 1.12 6.95 5.91 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 1.10 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 4.20 0.43 3.72 0.10 213.87 0.35
CTZN CitFed Bancorp of Dayton OH 6.70 5.81 0.68 9.99 7.83 0.55 8.16 0.85 74.34 1.06
CLAS Classic Bancshares of KY 28.78 28.78 0.44 2.82 1.96 0.40 2.55 0.51 77.33 0.62
CMSB Cmnwealth Bancorp of PA 10.41 7.68 0.70 6.69 8.15 0.67 6.45 0.44 103.05 0.85
CBSA Coastal Bancorp of Houston TX 3.31 2.69 0.37 10.64 10.43 0.37 10.58 0.67 32.48 0.54
CFCP Coastal Fin. Corp. of SC 6.08 6.08 0.99 16.43 6.86 0.89 14.80 0.42 209.91 1.02
COFD Collective Bancorp Inc. of NJ 7.05 6.54 1.06 15.84 11.27 1.04 15.48 NA NA 0.50
CMSV Commty. Svgs, MHC of FL(47.6) 11.82 11.82 0.83 6.60 6.19 0.81 6.40 1.24 44.70 1.02
CBIN Community Bank Shares of IN 11.36 11.36 0.90 8.26 8.00 0.88 8.09 0.12 219.42 0.50
CBNH Community Bankshares Inc of NH* 7.23 7.23 0.78 10.93 7.62 0.65 9.07 0.46 159.64 1.09
CFTP Community Fed. Bancorp of MS 33.10 33.10 1.17 6.28 3.31 1.14 6.13 0.34 84.38 0.53
CFFC Community Fin. Corp. of VA 13.70 13.70 1.29 9.70 8.10 1.29 9.70 0.45 139.66 0.70
CIBI Community Inv. Corp. of OH 14.36 14.36 1.00 7.71 8.00 0.95 7.33 0.73 69.06 0.68
COOP Cooperative Bk.for Svgs. of NC 9.34 8.21 0.28 3.11 3.64 0.24 2.64 0.22 95.46 0.28
<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 13.31 99.25 11.55 99.40 13.72 0.56 4.21 56.00
AFFFZ America First Fin. Fund of CA 8.20 99.39 6.76 101.78 8.25 1.60 6.10 50.00
AMFB American Federal Bank of SC 10.24 157.60 12.94 170.83 9.39 0.40 2.52 25.81
ANBK American Nat'l Bancorp of MD NM 85.30 9.31 85.30 NM 0.00 0.00 0.00
ABCW Anchor Bancorp Wisconsin of WI 11.78 144.25 9.74 148.14 12.10 0.40 1.16 13.61
ANDB Andover Bancorp, Inc. of MA* 11.00 121.09 9.20 121.09 10.49 0.60 2.42 26.67
ASFC Astoria Financial Corp. of NY 11.85 100.11 8.56 123.07 11.96 0.44 1.68 19.91
AVND Avondale Fin. Corp. of IL 13.57 82.21 8.74 82.21 19.42 0.00 0.00 0.00
BFSI BFS Bankorp, Inc. of NY 6.17 135.64 11.04 135.64 6.39 0.00 0.00 0.00
BKCT Bancorp Connecticut of CT* 13.79 141.39 15.28 141.39 13.79 0.72 3.16 43.64
BWFC Bank West Fin. Corp. of MI NM 95.91 18.97 95.91 NM 0.28 2.43 68.29
BANC BankAtlantic Bancorp of FL 9.20 113.73 9.47 123.83 11.83 0.18 1.36 12.50
BKUNA BankUnited SA of FL 6.47 91.42 5.59 96.80 8.43 0.00 0.00 0.00
BKCO Bankers Corp. of NJ* 10.65 117.43 11.52 119.96 10.09 0.64 3.71 39.51
BVFS Bay View Capital Corp. of CA NM 110.32 7.71 113.16 NM 0.60 1.85 NM
BFSB Bedford Bancshares of VA 13.75 104.10 16.77 104.10 13.75 0.40 2.42 33.33
BSBC Branford SB of CT* 15.00 129.87 11.28 129.87 15.00 0.00 0.00 0.00
BRFC Bridgeville SB, FSB of PA(8) NM 106.16 30.26 106.16 NM 0.32 2.13 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 8.21 107.66 9.86 107.66 8.21 0.00 0.00 0.00
CCFH CCF Holding Company of GA 20.12 80.26 17.04 80.26 21.20 0.40 3.37 67.80
CENF CENFED Financial Corp. of CA 10.97 102.85 5.15 103.05 15.90 0.36 1.67 18.27
CFSB CFSB Bancorp of Lansing MI 12.82 141.61 11.75 141.61 13.06 0.48 2.37 30.38
CKFB CKF Bancorp of Danville KY NM 113.31 30.93 113.31 NM 0.40 2.05 53.33
CNSB CNS Bancorp of MO NM 81.73 18.86 81.73 NM 0.00 0.00 0.00
CSBF CSB Financial Group Inc of IL NM 75.20 23.23 75.20 NM 0.00 0.00 0.00
CFHC California Fin. Hld. Co. of CA NM 121.58 8.21 122.71 NM 0.44 1.97 57.14
CBCI Calumet Bancorp of Chicago IL 12.28 87.53 14.87 87.53 12.33 0.00 0.00 0.00
CAFI Camco Fin. Corp. of OH 9.53 139.19 11.59 139.19 12.50 0.44 2.29 21.78
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 10.35 89.09 9.29 89.09 10.35 0.36 1.99 20.57
CARV Carver FSB of New York, NY 24.24 53.26 5.04 55.94 24.24 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* 21.28 73.26 20.36 73.26 18.52 0.00 0.00 0.00
CNIT Cenit Bancorp of Norfolk VA 20.70 112.07 7.82 116.40 17.66 0.80 2.46 50.96
CTBK Center Banks, Inc. of NY* 10.63 82.72 5.85 82.72 10.31 0.24 1.78 18.90
CFCX Center Fin. Corp of CT(8)* 15.16 156.86 9.57 167.94 22.25 0.28 1.15 17.50
CEBK Central Co-Op. Bank of MA* 17.93 108.36 10.78 124.13 19.09 0.00 0.00 0.00
CJFC Central Jersey Fin. Corp of NJ(8) 15.87 145.77 17.17 156.82 16.67 1.12 3.73 59.26
CBSB Charter Financial Inc. of IL 16.92 84.94 18.19 87.23 16.92 0.24 2.18 36.92
COFI Charter One Financial of OH(8) NM 166.77 11.51 169.46 14.07 0.92 2.74 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) 23.81 101.42 10.80 116.90 NM 0.68 1.94 46.26
CTZN CitFed Bancorp of Dayton OH 12.76 118.39 7.93 136.59 15.63 0.28 0.77 9.86
CLAS Classic Bancshares of KY NM 72.43 20.85 72.43 NM 0.00 0.00 0.00
CMSB Cmnwealth Bancorp of PA 12.28 82.11 8.55 111.37 12.74 0.25 2.45 30.12
CBSA Coastal Bancorp of Houston TX 9.59 98.61 3.27 121.55 9.64 0.40 2.16 20.73
CFCP Coastal Fin. Corp. of SC 14.57 224.72 13.67 224.72 16.18 0.44 2.00 29.14
COFD Collective Bancorp Inc. of NJ 8.87 132.86 9.36 143.08 9.08 1.00 4.30 38.17
CMSV Commty. Svgs, MHC of FL(47.6) 16.16 104.23 12.32 104.23 16.67 0.80 5.00 NM
CBIN Community Bank Shares of IN 12.50 93.46 10.61 93.46 12.77 0.34 2.83 35.42
CBNH Community Bankshares Inc of NH* 13.12 119.66 8.65 119.66 15.81 0.60 3.24 42.55
CFTP Community Fed. Bancorp of MS NM 90.66 30.01 90.66 NM 0.30 2.31 69.77
CFFC Community Fin. Corp. of VA 12.34 113.11 15.50 113.11 12.34 0.52 2.67 32.91
CIBI Community Inv. Corp. of OH 12.50 85.96 12.34 85.96 13.16 0.40 2.67 33.33
COOP Cooperative Bk.for Svgs. of NC NM 84.01 7.85 95.54 NM 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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
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 3.36 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 14.26 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 7.80 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
DIME Dime Community Bancorp of NY 16.92 14.87 0.75 4.45 5.36 0.69 4.09 2.59 30.10 1.20
DIBK Dime Financial Corp. of CT* 7.95 7.56 1.50 19.84 12.87 1.69 22.30 0.99 199.52 2.98
EGLB Eagle BancGroup of IL 13.53 13.53 0.08 0.59 0.91 0.08 0.59 0.80 75.39 1.01
EBSI Eagle Bancshares of Tucker GA 6.65 6.65 0.97 13.73 10.37 0.94 13.29 0.49 138.35 0.98
EGFC Eagle Financial Corp. of CT 7.14 5.16 1.30 17.60 14.79 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 6.00 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 2.56 0.14 2.29 0.80 89.84 1.00
EFBI Enterprise Fed. Bancorp of OH 15.58 15.55 1.12 5.47 7.07 0.77 3.75 0.01 NA 0.27
EQSB Equitable FSB of Wheaton MD 5.25 5.25 0.84 16.16 14.25 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 5.73 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 5.91 1.01 5.21 NA NA 0.51
FFBS FFBS Bancorp of Columbus MS 19.57 19.57 1.31 6.46 4.44 1.31 6.46 0.70 76.75 0.79
FFDF FFD Financial Corp. of OH 28.03 28.03 1.04 3.69 5.07 1.04 3.69 NA NA 0.32
FFLC FFLC Bancorp of Leesburg FL 16.97 16.97 0.94 5.43 6.39 0.95 5.48 0.13 239.95 0.50
FFFC FFVA Financial Corp. of VA 16.32 15.99 1.30 7.25 7.00 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 5.64 1.25 6.73 0.88 66.89 0.78
FMCO FMS Financial Corp. of NJ 6.58 6.40 0.84 13.04 10.40 0.84 13.04 1.11 49.19 0.95
FFHH FSF Financial Corp. of MN 15.97 15.97 0.62 3.34 4.13 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 8.42 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 9.28 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 10.59 0.97 11.66 1.16 84.92 1.20
FBCI Fidelity Bancorp of Chicago IL 12.05 12.00 0.77 5.66 6.22 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 5.84 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 4.69 0.82 5.54 0.40 80.88 0.43
FIBC Financial Bancorp of NY 10.66 10.60 0.65 5.40 6.47 0.64 5.33 2.80 19.48 1.07
FNSC Financial Security Corp. of IL(8) 14.37 14.37 0.77 5.70 5.60 0.75 5.50 2.77 30.87 1.23
FSBS First Ashland Fin. Corp. of KY(8) 26.33 26.33 0.87 4.09 2.79 0.87 4.09 NA NA 0.17
FBSI First Bancshares of MO 16.92 16.89 0.78 4.33 5.12 0.77 4.27 0.43 83.74 0.44
FBBC First Bell Bancorp of PA 21.05 21.05 1.55 7.69 7.03 1.53 7.61 0.11 97.74 0.14
FBER First Bergen Bancorp of NJ 16.52 16.52 0.28 3.06 2.19 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 8.92 0.58 9.23 3.43 33.61 1.63
FFBA First Colorado Bancorp of Co 16.19 16.00 0.98 8.50 5.07 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 5.24 1.13 5.26 NA NA 0.48
FESX First Essex Bancorp of MA* 7.67 7.67 0.94 13.05 12.49 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 11.31 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 6.55 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 8.17 0.69 12.62 0.15 196.94 0.47
BDJI First Fed. Bancorp. of MN 14.38 14.38 0.70 5.24 6.94 0.70 5.24 0.23 211.89 0.98
FFBH First Fed. Bancshares of AR 15.90 15.90 0.99 6.24 7.32 0.99 6.24 0.09 278.68 0.35
FFEC First Fed. Bancshares of WI 14.32 13.74 0.96 5.83 5.56 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 9.52 0.67 9.91 NA NA 0.84
FFKY First Fed. Fin. Corp. of KY 14.04 13.10 1.65 11.51 6.60 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
FFWM First Fin. Corp of Western MD 12.53 12.53 0.42 3.52 3.03 0.39 3.24 2.02 116.36 3.17
<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)
- ---------------------------------------
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 68.98 22.56 68.98 NM 0.20 1.98 58.82
DNFC D&N Financial Corp. of MI 7.01 124.21 7.00 126.20 7.94 0.00 0.00 0.00
DSBC DS Bancor Inc. of Derby CT* 12.83 127.83 8.38 132.39 14.32 0.24 0.70 8.92
DFIN Damen Fin. Corp. of Chicago IL NM 80.20 19.39 80.20 NM 0.24 2.09 54.55
DIME Dime Community Bancorp of NY 18.65 82.92 14.03 94.38 20.26 0.00 0.00 0.00
DIBK Dime Financial Corp. of CT* 7.77 141.11 11.22 148.51 6.91 0.28 1.87 14.51
EGLB Eagle BancGroup of IL NM 65.13 8.81 65.13 NM 0.00 0.00 0.00
EBSI Eagle Bancshares of Tucker GA 9.64 123.85 8.23 123.85 9.97 0.60 4.07 39.22
EGFC Eagle Financial Corp. of CT 6.76 109.03 7.78 150.73 13.83 0.92 3.72 25.14
ETFS East Texas Fin. Serv. of TX 16.67 76.72 15.06 76.72 17.90 0.20 1.38 22.99
EBCP Eastern Bancorp of NH 11.43 90.65 6.98 96.27 13.79 0.48 3.00 34.29
ESBK Elmira SB of Elmira NY* NM 90.50 5.70 94.74 NM 0.64 3.56 NM
EFBI Enterprise Fed. Bancorp of OH 14.14 90.21 14.05 90.38 20.59 0.00 0.00 0.00
EQSB Equitable FSB of Wheaton MD 7.02 105.49 5.54 105.49 7.08 0.00 0.00 0.00
FFFG F.F.O. Financial Group of FL 17.47 120.18 7.23 120.18 17.47 0.00 0.00 0.00
FCBF FCB Fin. Corp. of Neenah WI 16.91 91.85 16.96 91.85 17.25 0.72 4.17 70.59
FFBS FFBS Bancorp of Columbus MS 22.50 146.39 28.64 146.39 22.50 0.50 2.22 50.00
FFDF FFD Financial Corp. of OH 19.71 72.80 20.40 72.80 19.71 0.20 1.95 38.46
FFLC FFLC Bancorp of Leesburg FL 15.65 84.03 14.26 84.03 15.52 0.40 2.22 34.78
FFFC FFVA Financial Corp. of VA 14.29 109.18 17.82 111.40 14.66 0.40 2.35 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 17.72 117.28 21.52 117.28 17.21 0.60 2.53 44.78
FMCO FMS Financial Corp. of NJ 9.62 120.46 7.93 123.86 9.62 0.20 1.23 11.83
FFHH FSF Financial Corp. of MN 24.21 86.01 13.73 86.01 24.21 0.50 4.30 NM
FMLY Family Bancorp of Haverhill MA(8)* 11.88 141.75 10.99 154.90 13.26 0.48 2.01 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 10.78 85.42 10.35 90.22 10.78 0.54 3.82 41.22
FFRV Fid. Fin. Bkshrs. Corp. of VA 9.44 106.16 9.04 106.25 9.59 0.20 1.57 14.81
FBCI Fidelity Bancorp of Chicago IL 16.07 93.14 11.22 93.47 17.12 0.24 1.52 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) 17.12 103.65 10.61 104.87 18.38 0.60 4.80 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 21.33 78.67 16.02 78.67 21.33 0.20 2.04 43.48
FIBC Financial Bancorp of NY 15.46 86.32 9.20 86.81 15.66 0.30 2.43 37.50
FNSC Financial Security Corp. of IL(8) 17.87 98.14 14.10 98.14 18.52 0.00 0.00 0.00
FSBS First Ashland Fin. Corp. of KY(8) NM 112.38 29.59 112.38 NM 0.00 0.00 0.00
FBSI First Bancshares of MO 19.54 85.60 14.49 85.78 19.78 0.20 1.28 25.00
FBBC First Bell Bancorp of PA 14.22 95.57 20.12 95.57 14.38 0.20 1.50 21.28
FBER First Bergen Bancorp of NJ NM 67.76 11.20 67.76 NM 0.00 0.00 0.00
FCIT First Cit. Fin. Corp of MD 11.21 120.82 7.59 120.82 13.77 0.00 0.00 0.00
FFBA First Colorado Bancorp of Co 19.74 114.45 18.53 115.82 19.74 0.32 2.35 46.38
FDEF First Defiance Fin. Corp. of OH 19.09 82.82 21.03 82.82 19.46 0.28 2.77 52.83
FESX First Essex Bancorp of MA* 8.01 100.69 7.72 100.69 9.49 0.48 4.68 37.50
FFES First FS&LA of E. Hartford CT 8.84 78.51 4.86 78.76 8.93 0.60 3.43 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) 15.28 114.96 9.67 115.55 16.61 0.72 2.91 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 12.24 182.66 9.72 200.82 15.21 0.48 1.63 19.92
BDJI First Fed. Bancorp. of MN 14.41 69.41 9.98 69.41 14.41 0.00 0.00 0.00
FFBH First Fed. Bancshares of AR 13.67 85.31 13.57 85.31 13.67 0.00 0.00 0.00
FFEC First Fed. Bancshares of WI 17.99 105.06 15.04 109.50 18.44 0.28 1.90 34.15
FTFC First Fed. Capital Corp. of WI 10.51 131.40 9.00 139.58 14.31 0.64 3.24 34.04
FFKY First Fed. Fin. Corp. of KY 15.15 171.09 24.02 183.32 17.39 0.48 2.40 36.36
FFBZ First Federal Bancorp of OH 10.25 142.19 11.10 142.36 10.43 0.44 1.80 18.41
FFWM First Fin. Corp of Western MD NM 112.94 14.15 112.94 NM 0.48 2.27 NM
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
FFCH First Fin. Holdings Inc. of SC 6.61 6.61 0.75 11.29 8.53 0.77 11.50 1.36 55.75 0.93
FFBI First Financial Bancorp of IL 8.87 8.87 0.69 6.63 7.23 0.72 6.93 0.53 75.27 0.55
FFHC First Financial Corp. of WI 7.33 6.96 1.28 18.90 10.24 1.24 18.41 0.43 100.08 0.67
FFHS First Franklin Corp. of OH 9.51 9.51 0.63 6.59 7.10 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 9.08 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 12.34 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 9.48 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 5.86 0.51 5.92 2.86 19.07 0.91
FLKY First Lancaster Bncshrs of KY 29.83 29.83 1.20 4.01 3.96 1.20 4.01 1.23 16.83 0.23
FLFC First Liberty Fin. Corp. of GA 6.83 5.74 0.96 14.60 10.24 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 8.97 0.97 7.38 0.39 148.22 0.81
FMBD First Mutual Bancorp of IL 25.26 25.26 0.98 4.24 5.08 0.95 4.10 0.16 256.84 0.52
FMSB First Mutual SB of Bellevue WA* 6.64 6.64 1.02 15.30 11.84 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 6.75 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 8.35 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 0.55 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 5.56 1.50 5.78 0.03 936.92 0.35
FWWB First Savings Bancorp of WA* 25.80 25.80 1.02 8.65 3.66 1.00 8.48 0.23 283.53 1.12
SHEN First Shenango Bancorp of PA 13.24 13.24 1.01 7.19 7.18 0.95 6.79 0.49 146.55 1.10
FSFC First So.east Fin. Corp. of SC(8) 19.61 19.61 0.90 4.60 8.11 0.89 4.55 0.14 238.66 0.52
FSFI First State Fin. Serv. of NJ(8) 6.84 6.49 0.63 9.28 7.46 0.49 7.25 4.97 21.02 1.28
FFDP FirstFed Bancshares of IL 9.02 8.61 0.63 6.51 6.72 0.39 4.08 0.14 145.75 0.38
FLAG Flag Financial Corp of GA 9.56 9.56 0.91 9.92 9.13 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 6.82 0.78 11.77 0.82 150.67 2.11
FFIC Flushing Fin. Corp. of NY* 18.72 18.72 0.58 4.55 2.85 0.56 4.36 0.90 80.61 1.78
FBHC Fort Bend Holding Corp. of TX 7.20 7.20 0.71 9.74 11.94 0.62 8.55 1.29 42.72 1.42
FTSB Fort Thomas Fin. Corp. of KY 24.30 24.30 1.30 5.84 4.28 1.30 5.84 1.78 19.53 0.42
FKKY Frankfort First Bancorp of KY 34.52 34.52 1.36 4.94 4.33 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 5.60 1.24 5.07 NA NA 0.87
GWBC Gateway Bancorp of KY 25.00 25.00 1.05 3.92 4.80 1.05 3.92 0.19 57.04 0.46
GBCI Glacier Bancorp of MT 9.63 9.61 1.59 16.27 8.28 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 6.68 0.54 5.62 NA NA 0.29
GTPS Great American Bancorp of IL 27.55 27.55 0.68 2.55 3.17 0.66 2.49 0.45 53.28 0.37
GTFN Great Financial Corp. of KY 11.35 11.17 1.00 8.15 6.08 0.81 6.62 4.16 11.85 0.67
GSBC Great Southern Bancorp of MO 10.12 9.95 1.72 17.10 9.19 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 8.38 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 4.77 1.42 4.50 0.16 67.98 0.19
GROV GroveBank for Savings of MA* 6.24 6.23 0.81 13.33 10.03 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 5.16 0.55 3.89 0.07 NA 1.59
GSLC Guaranty Svgs & Loan FA of VA 6.19 6.19 0.68 11.24 9.03 0.42 6.90 3.14 23.56 0.94
HEMT HF Bancorp of Hemet CA 11.44 11.43 0.19 1.70 2.16 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 9.25 0.61 6.80 0.69 93.68 0.88
HFNC HFNC Financial Corp. of NC 34.11 34.11 0.80 3.76 2.00 0.95 4.46 1.62 64.19 1.59
HMNF HMN Financial, Inc. of MN 16.76 16.76 1.10 6.35 7.29 0.99 5.67 0.14 305.95 0.73
HALL Hallmark Capital Corp. of WI 7.82 7.82 0.57 6.40 7.73 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 8.96 1.18 13.58 0.54 199.07 1.48
HRBF Harbor Federal Bancorp of MD 14.17 14.17 0.61 3.19 4.56 0.61 3.19 0.23 97.99 0.37
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
HARL Harleysville SA of PA 7.05 7.05 0.82 11.92 9.77 0.83 12.13 0.05 NA 0.78
HARS Harris SB, MHC of PA (23.1) 12.07 11.31 0.69 5.54 4.56 0.68 5.47 0.75 66.68 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>
NASDAQ Listed OTC Companies (continued)
- ---------------------------------------
FFCH First Fin. Holdings Inc. of SC 11.73 126.33 8.35 126.33 11.52 0.64 3.37 39.51
FFBI First Financial Bancorp of IL 13.84 93.04 8.26 93.04 13.25 0.00 0.00 0.00
FFHC First Financial Corp. of WI 9.76 171.18 12.55 180.27 10.02 0.60 2.64 25.75
FFHS First Franklin Corp. of OH 14.09 89.54 8.51 89.54 14.35 0.32 2.06 29.09
FGHC First Georgia Hold. Corp of GA 11.02 113.44 9.26 128.21 11.02 0.00 0.00 0.00
FSPG First Home SB, SLA of NJ 8.11 118.57 7.73 121.83 8.33 0.48 2.70 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 10.55 139.24 12.47 141.27 12.43 0.56 2.52 26.54
FKFS First Keystone Fin. Corp of PA 17.08 96.69 8.01 96.69 15.83 0.00 0.00 0.00
FLKY First Lancaster Bncshrs of KY NM 101.11 30.17 101.11 NM 0.00 0.00 0.00
FLFC First Liberty Fin. Corp. of GA 9.77 124.70 8.52 148.51 12.35 0.52 2.48 24.19
CASH First Midwest Fin. Corp. of IA 11.15 100.14 12.57 107.41 14.03 0.44 2.02 22.56
FMBD First Mutual Bancorp of IL 19.67 72.46 18.30 72.46 20.34 0.28 2.33 45.90
FMSB First Mutual SB of Bellevue WA* 8.45 121.65 8.08 121.65 8.57 0.20 1.63 13.79
FNGB First Northern Cap. Corp of WI 14.81 95.43 12.15 95.43 17.33 0.60 3.93 58.25
FFPB First Palm Beach Bancorp of FL 11.98 93.75 7.16 96.29 12.05 0.40 1.98 23.67
FSNJ First SB of NJ, MHC (45.0) NM 82.60 6.71 82.60 22.15 0.50 3.42 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 18.00 100.33 26.30 100.33 17.65 0.60 3.33 60.00
FWWB First Savings Bancorp of WA* NM 95.08 24.53 95.08 NM 0.20 1.38 37.74
SHEN First Shenango Bancorp of PA 13.93 98.33 13.02 98.33 14.75 0.48 2.39 33.33
FSFC First So.east Fin. Corp. of SC(8) 12.33 55.96 10.97 55.96 12.49 0.16 1.66 20.51
FSFI First State Fin. Serv. of NJ(8) 13.41 120.39 8.24 127.05 17.16 0.22 1.71 22.92
FFDP FirstFed Bancshares of IL 14.88 98.50 8.89 103.15 23.72 0.40 2.44 36.36
FLAG Flag Financial Corp of GA 10.95 106.88 10.22 106.88 12.37 0.34 2.96 32.38
FFPC Florida First Bancorp of FL(8) 14.67 176.28 12.21 176.28 15.94 0.24 2.18 32.00
FFIC Flushing Fin. Corp. of NY* NM 97.01 18.16 97.01 NM 0.00 0.00 0.00
FBHC Fort Bend Holding Corp. of TX 8.37 80.20 5.77 80.20 9.53 0.28 1.62 13.59
FTSB Fort Thomas Fin. Corp. of KY 23.39 120.54 29.29 120.54 23.39 0.25 1.53 35.71
FKKY Frankfort First Bancorp of KY 23.11 88.32 30.49 88.32 NM 0.36 2.94 67.92
GFSB GFS Bancorp of Grinnell IA 12.90 107.09 12.89 107.09 13.15 0.40 1.98 25.48
GUPB GFSB Bancorp of Gallup NM 17.84 79.34 18.27 79.34 17.84 0.40 2.95 52.63
GWBC Gateway Bancorp of KY 20.83 88.60 22.15 88.60 20.83 0.40 2.91 60.61
GBCI Glacier Bancorp of MT 12.07 186.24 17.93 186.57 12.07 0.64 3.01 36.36
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 14.96 85.35 8.03 87.64 15.65 0.68 3.32 49.64
GTPS Great American Bancorp of IL NM 73.82 20.33 73.82 NM 0.40 3.02 NM
GTFN Great Financial Corp. of KY 16.45 132.88 15.08 135.06 20.24 0.48 1.88 30.97
GSBC Great Southern Bancorp of MO 10.89 179.52 18.17 182.56 11.59 0.70 2.59 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* 11.93 96.46 5.48 96.46 12.21 0.00 0.00 0.00
GSFC Green Street Fin. Corp. of NC 20.97 94.34 29.74 94.34 20.97 0.40 3.08 64.52
GROV GroveBank for Savings of MA* 9.97 124.00 7.74 124.26 10.57 0.72 2.44 24.32
GFED Guaranty FS&LA,MHC of MO(31.1) 19.40 129.46 18.95 129.46 NM 0.64 5.69 NM
GSLC Guaranty Svgs & Loan FA of VA 11.07 111.83 6.92 111.83 18.02 0.10 1.29 14.29
HEMT HF Bancorp of Hemet CA NM 70.88 8.11 70.94 NM 0.00 0.00 0.00
HFFC HF Financial Corp. of SD(8) 10.82 90.45 8.12 90.72 13.86 0.33 2.16 23.40
HFNC HFNC Financial Corp. of NC NM 112.60 38.41 112.60 NM 0.00 0.00 0.00
HMNF HMN Financial, Inc. of MN 13.72 88.37 14.81 88.37 15.35 0.00 0.00 0.00
HALL Hallmark Capital Corp. of WI 12.94 80.25 6.27 80.25 14.46 0.00 0.00 0.00
HARB Harbor FSB, MHC of FL (45.7) 11.16 143.03 12.67 143.03 11.21 1.20 5.00 55.81
HRBF Harbor Federal Bancorp of MD 21.93 78.62 11.14 78.62 21.93 0.40 3.20 70.18
HFSA Hardin Bancorp of Hardin MO 24.48 77.51 14.91 77.51 24.48 0.40 3.40 NM
HARL Harleysville SA of PA 10.23 116.51 8.22 116.51 10.06 0.40 2.29 23.39
HARS Harris SB, MHC of PA (23.1) 21.92 118.96 14.36 126.98 22.22 0.58 3.63 NM
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
HFFB Harrodsburg 1st Fin Bcrp of KY 28.66 28.66 1.05 4.73 2.93 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 5.52 0.89 4.74 0.20 75.00 0.28
HAVN Haven Bancorp of Woodhaven NY 6.30 6.26 0.67 10.24 7.96 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 -7.15 -0.27 -7.03 11.39 17.41 2.44
HSBK Hibernia SB of Quincy MA* 6.51 6.51 0.68 9.99 10.06 0.54 7.95 0.42 146.75 1.03
HBNK Highland Federal Bank of CA 7.83 7.83 0.22 2.87 2.87 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 6.69 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 5.62 0.86 5.00 NA NA 0.60
HBBI Home Building Bancorp of IN 14.13 14.13 0.45 3.17 2.91 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 11.89 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 9.76 1.16 13.98 4.75 35.71 2.59
HWEN Home Financial Bancorp of IN 19.64 19.64 0.99 5.06 7.41 0.99 5.06 0.39 76.34 0.37
HOFL Home Financial Corp. of FL(8) 25.51 25.51 1.71 6.69 6.18 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 11.63 1.76 15.32 0.65 216.13 1.75
HMCI Homecorp, Inc. of Rockford IL 6.07 6.07 0.37 6.28 6.54 0.25 4.26 3.24 15.53 0.65
LOAN Horizon Bancorp, Inc of TX* 8.65 8.35 1.54 17.77 12.72 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 4.88 0.43 3.44 1.57 28.85 0.67
HRZB Horizon Financial Corp. of WA* 16.19 16.19 1.53 9.53 8.80 1.53 9.53 NA NA 0.82
IBSF IBS Financial Corp. of NJ 20.39 20.39 1.10 5.11 5.49 1.12 5.18 0.07 198.42 0.66
ISBF ISB Financial Corp. of LA 19.37 19.36 1.26 6.94 7.10 1.26 6.94 NA NA 0.91
IFSB Independence FSB of DC 6.48 5.57 0.55 8.92 14.19 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 4.83 0.68 4.41 NA NA 0.61
IFSL Indiana Federal Corp. of IN 9.82 9.13 1.02 10.77 8.00 0.96 10.08 1.41 65.46 1.20
INBI Industrial Bancorp of OH 19.12 19.12 1.48 8.08 7.63 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 8.36 1.00 13.71 0.59 59.11 0.62
IPSW Ipswich SB of Ipswich MA* 6.32 6.32 1.39 22.24 12.05 1.21 19.44 2.23 46.20 1.37
IROQ Iroquois Bancorp of Auburn NY* 6.08 6.08 0.86 14.60 10.00 0.86 14.51 1.60 46.24 1.00
JSBF JSB Financial, Inc. of NY 21.82 21.82 1.47 6.73 6.69 1.55 7.13 NA NA 0.61
JXVL Jacksonville Bancorp of TX 16.70 16.70 0.79 6.76 5.83 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 3.69 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 5.50 1.00 7.78 0.46 54.63 1.08
JSBA Jefferson Svgs Bancorp of MO 7.02 5.75 0.60 8.20 6.20 0.59 8.04 0.97 48.62 0.66
JOAC Joachim Bancorp of MO 29.24 29.24 0.65 3.14 2.25 0.65 3.14 0.01 NA 0.31
KSAV KS Bancorp of Kenly NC 15.17 15.15 1.14 6.94 7.55 1.15 7.03 0.73 41.55 0.37
KSBK KSB Bancorp of Kingfield ME* 6.85 6.30 0.79 12.18 11.87 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 5.68 1.05 5.71 0.50 120.17 1.35
LSBI LSB Bancorp of Lafayette IN 10.66 10.66 0.82 6.96 8.53 0.78 6.58 0.19 295.51 0.65
LVSB Lakeview SB of Paterson NJ 9.95 7.64 1.15 10.31 10.86 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 14.61 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 9.29 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 6.28 1.26 4.27 1.15 35.02 0.49
LBCI Liberty Bancorp of Chicago IL 9.53 9.50 0.56 5.51 5.92 0.56 5.51 0.12 421.89 0.70
LIFB Life Bancorp of Norfolk VA 12.73 12.26 0.85 5.95 6.25 0.88 6.22 0.73 107.84 1.73
LFBI Little Falls Bancorp of NJ 15.22 14.00 0.22 2.42 1.76 0.16 1.75 1.56 20.85 0.94
LOGN Logansport Fin. Corp. of IN 26.77 26.77 1.41 5.71 5.63 1.40 5.63 0.37 79.86 0.44
LONF London Financial Corp. of OH 20.86 20.86 0.57 4.73 3.61 0.57 4.73 0.21 239.74 0.69
LISB Long Island Bancorp of NY 10.69 10.69 0.95 8.77 6.29 0.89 8.20 NA NA 1.45
MAFB MAF Bancorp of IL 5.54 5.54 0.88 15.21 13.23 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 4.44 0.70 4.81 0.33 83.20 0.51
MFBC MFB Corp. of Mishawaka IN 19.32 19.32 0.69 3.40 4.71 0.68 3.35 NA NA 0.24
<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)
- ---------------------------------------
HFFB Harrodsburg 1st Fin Bcrp of KY NM 117.30 33.62 117.30 NM 0.40 2.39 NM
HHFC Harvest Home Fin. Corp. of OH 18.12 85.32 15.91 85.32 18.12 0.40 3.20 57.97
HAVN Haven Bancorp of Woodhaven NY 12.56 128.32 8.08 129.09 12.73 0.60 2.14 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 73.27 2.77 73.73 NM 0.00 0.00 NM
HSBK Hibernia SB of Quincy MA* 9.94 95.08 6.19 95.08 12.50 0.28 1.98 19.72
HBNK Highland Federal Bank of CA NM 99.47 7.79 99.47 NM 0.00 0.00 0.00
HIFS Hingham Inst. for Sav. of MA* 9.66 100.86 10.12 100.86 9.66 0.36 2.57 24.83
HNFC Hinsdale Financial Corp. of IL 14.95 116.93 9.32 120.63 15.54 0.00 0.00 0.00
HBFW Home Bancorp of Fort Wayne IN 17.80 92.23 15.14 92.23 17.80 0.20 1.31 23.26
HBBI Home Building Bancorp of IN NM 108.81 15.38 108.81 NM 0.30 1.48 50.85
HOMF Home Fed Bancorp of Seymour IN 8.41 118.42 9.81 123.16 9.69 0.50 1.87 15.72
HFMD Home Federal Corporation of MD(8) 10.25 138.33 11.92 140.22 10.46 0.00 0.00 0.00
HWEN Home Financial Bancorp of IN 13.49 68.33 13.42 68.33 13.49 0.00 0.00 0.00
HOFL Home Financial Corp. of FL(8) 16.19 106.33 27.12 106.33 17.01 0.80 5.95 NM
HPBC Home Port Bancorp, Inc. of MA* 8.60 132.35 14.90 132.35 8.54 0.60 4.44 38.22
HMCI Homecorp, Inc. of Rockford IL 15.29 92.99 5.64 92.99 22.53 0.00 0.00 0.00
LOAN Horizon Bancorp, Inc of TX* 7.86 123.26 10.66 127.62 10.05 0.16 1.64 12.90
HZFS Horizon Fin'l. Services of IA 20.49 79.05 9.15 79.05 22.01 0.32 2.17 44.44
HRZB Horizon Financial Corp. of WA* 11.36 103.91 16.82 103.91 11.36 0.40 3.20 36.36
IBSF IBS Financial Corp. of NJ 18.23 95.64 19.51 95.64 17.97 0.24 1.85 33.80
ISBF ISB Financial Corp. of LA 14.09 84.36 16.34 84.41 14.09 0.32 2.32 32.65
IFSB Independence FSB of DC 7.05 58.01 3.76 67.51 14.90 0.22 2.84 20.00
INCB Indiana Comm. Bank, SB of IN 20.70 90.36 13.54 90.36 20.70 0.35 2.52 52.24
IFSL Indiana Federal Corp. of IN 12.50 131.05 12.87 141.00 13.36 0.72 3.69 46.15
INBI Industrial Bancorp of OH 13.11 95.47 18.26 95.47 13.11 0.30 2.79 36.59
IWBK Interwest SB of Oak Harbor WA 11.96 169.17 11.64 174.17 12.96 0.52 2.10 25.12
IPSW Ipswich SB of Ipswich MA* 8.30 164.40 10.39 164.40 9.50 0.20 1.68 13.99
IROQ Iroquois Bancorp of Auburn NY* 10.00 137.10 8.33 137.10 10.06 0.32 2.00 20.00
JSBF JSB Financial, Inc. of NY 14.95 100.15 21.86 100.15 14.12 1.20 3.66 54.79
JXVL Jacksonville Bancorp of TX 17.15 75.69 12.64 75.69 17.15 0.50 4.94 NM
JXSB Jcksnville SB,MHC of IL(43.3%) NM 96.94 11.43 96.94 NM 0.40 3.08 NM
JEBC Jefferson Bancorp of Gretna LA(8) 18.18 136.39 18.23 136.39 18.18 0.30 1.36 24.79
JSBA Jefferson Svgs Bancorp of MO 16.12 127.67 8.96 155.85 16.44 0.32 1.31 21.05
JOAC Joachim Bancorp of MO NM 87.92 25.71 87.92 NM 0.50 4.02 NM
KSAV KS Bancorp of Kenly NC 13.25 97.28 14.75 97.42 13.07 0.60 3.00 39.74
KSBK KSB Bancorp of Kingfield ME* 8.43 96.44 6.61 104.80 8.79 0.20 0.89 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) 17.60 105.61 18.10 105.61 17.79 0.40 2.44 43.01
LSBI LSB Bancorp of Lafayette IN 11.72 83.52 8.91 83.52 12.40 0.32 2.13 25.00
LVSB Lakeview SB of Paterson NJ 9.20 101.30 10.08 131.92 15.34 0.25 1.23 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* 6.85 92.71 7.01 92.71 6.76 0.00 0.00 0.00
LFCT Leader Fin. Corp of Memphis TN(8) 10.77 169.19 13.58 169.19 11.01 0.72 1.66 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 15.92 69.17 20.35 69.17 16.18 0.00 0.00 0.00
LBCI Liberty Bancorp of Chicago IL 16.90 95.48 9.09 95.74 16.90 0.60 2.45 41.38
LIFB Life Bancorp of Norfolk VA 16.01 96.68 12.31 100.35 15.32 0.44 3.09 49.44
LFBI Little Falls Bancorp of NJ NM 71.73 10.92 78.01 NM 0.10 0.98 55.56
LOGN Logansport Fin. Corp. of IN 17.76 87.15 23.33 87.15 18.00 0.40 2.96 52.63
LONF London Financial Corp. of OH NM 69.21 14.44 69.21 NM 0.00 0.00 0.00
LISB Long Island Bancorp of NY 15.90 140.69 15.04 140.69 17.01 0.40 1.37 21.74
MAFB MAF Bancorp of IL 7.56 112.39 6.22 112.39 7.34 0.32 1.36 10.29
MBLF MBLA Financial Corp. of MO(8) 22.50 108.85 15.83 108.85 22.50 0.40 1.78 40.00
MFBC MFB Corp. of Mishawaka IN 21.21 71.21 13.76 71.21 21.54 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
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
MLFB MLF Bancorp of Villanova PA 7.95 7.75 0.70 8.06 7.59 0.62 7.15 0.59 125.65 1.64
MSBB MSB Bancorp of Middletown NY* 9.69 9.52 0.53 5.65 5.03 0.57 6.05 NA NA 0.57
MSBF MSB Financial Corp. of MI 22.64 22.64 1.93 7.88 8.87 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 5.86 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 9.25 0.65 7.94 0.48 81.70 0.45
MASB MassBank Corp. of Reading MA* 10.16 10.16 1.04 10.42 9.89 1.02 10.20 0.33 87.49 1.00
MFLR Mayflower Co-Op. Bank of MA* 9.58 9.37 0.88 8.50 7.43 0.83 8.01 1.23 76.96 1.50
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 9.25 1.01 13.99 NA NA NA
MWBX Metro West of MA* 7.47 7.47 1.25 17.15 10.93 1.25 17.15 2.43 38.37 1.37
MSEA Metropolitan Bancorp of WA(8) 6.54 5.92 0.71 10.67 8.21 0.77 11.51 NA NA 1.76
MCBS Mid Continent Bancshares of KS 12.53 12.50 1.37 9.90 9.72 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 8.32 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 3.48 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 7.75 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 6.32 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 8.84 1.25 6.40 0.14 888.89 2.07
MBBC Monterey Bay Bancorp of CA 14.98 14.80 0.19 1.27 1.53 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 1.62 0.23 2.10 NA NA NA
MSBK Mutual SB, FSB of Bay City MI 5.46 5.46 0.01 0.21 0.33 -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 4.70 0.87 3.98 0.18 40.95 0.15
NMSB Newmil Bancorp. of CT* 11.14 11.14 2.04 19.29 21.59 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 12.57 1.27 17.61 3.36 26.33 1.05
NBSI North Bancshares of Chicago IL 17.34 17.34 0.57 3.03 3.54 0.52 2.75 NA NA 0.36
FFFD North Central Bancshares of IA 28.87 28.87 1.48 7.67 6.12 1.39 7.19 0.13 743.80 1.18
NEBC Northeast Bancorp of ME* 7.56 6.36 0.61 8.16 8.00 0.47 6.27 NA NA 1.48
NEIB Northeast Indiana Bncrp of IN 20.34 20.34 1.10 5.50 5.78 1.10 5.50 0.25 272.13 0.74
NSBK Northside SB of Bronx NY* 7.74 7.67 1.14 15.51 10.58 0.98 13.39 0.51 84.90 1.67
NWEQ Northwest Equity Corp. of WI 13.73 13.73 1.08 6.99 8.19 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 6.35 1.05 9.37 0.98 70.63 0.94
NSSY Norwalk Savings Society of CT* 7.98 7.98 0.75 8.92 7.31 0.64 7.63 3.01 27.48 1.20
NSSB Norwich Financial Corp. of CT* 10.58 9.54 0.84 7.50 6.76 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 7.85 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 1.65 0.30 2.31 0.14 258.58 0.56
OCFC Ocean Fin. Corp. of NJ 18.75 18.75 0.90 4.82 6.31 0.92 4.93 0.97 59.78 0.97
OFCP Ottawa Financial Corp. of MI 10.92 8.75 0.92 4.93 4.43 0.92 4.93 0.38 95.16 0.45
PFFB PFF Bancorp of Pomona CA 14.39 14.23 0.10 1.37 0.93 0.10 1.37 2.29 42.84 1.23
PVFC PVF Capital Corp. of OH 6.71 6.71 1.13 17.84 12.56 0.99 15.71 NA NA NA
PCCI Pacific Crest Capital of CA* 7.90 7.90 1.09 20.44 10.94 0.88 16.48 6.49 26.06 2.56
PALM Palfed, Inc. of Aiken SC 8.45 8.04 0.66 8.56 6.77 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 11.84 0.98 13.82 0.18 850.40 2.28
PBIX Patriot Bank Corp. of PA 17.29 17.29 0.56 3.99 3.23 0.57 4.08 0.23 243.20 0.88
PEEK Peekskill Fin. Corp. of NY 30.67 30.67 1.06 4.96 3.71 1.11 5.19 0.83 31.67 1.32
PFSB PennFed Fin. Services of NJ 8.97 7.11 0.73 7.10 8.84 0.79 7.70 0.96 26.31 0.44
PWBC PennFirst Bancorp of PA 7.85 7.15 0.61 7.47 7.27 0.60 7.40 0.64 63.45 1.45
<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 13.17 109.08 8.67 111.87 14.85 0.76 3.10 40.86
MSBB MSB Bancorp of Middletown NY* 19.88 106.25 10.29 108.13 18.54 0.60 3.64 72.29
MSBF MSB Financial Corp. of MI 11.27 91.46 20.71 91.46 12.32 0.50 2.90 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 17.07 97.77 23.46 97.77 17.07 0.80 3.81 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 10.82 98.22 8.08 99.90 12.37 0.64 2.18 23.62
MASB MassBank Corp. of Reading MA* 10.11 102.63 10.42 102.63 10.33 0.88 2.69 27.16
MFLR Mayflower Co-Op. Bank of MA* 13.46 112.72 10.80 115.23 14.29 0.40 2.86 38.46
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 10.81 143.15 10.65 143.15 10.81 0.60 1.92 20.76
MWBX Metro West of MA* 9.15 145.91 10.90 145.91 9.15 0.10 2.67 24.39
MSEA Metropolitan Bancorp of WA(8) 12.19 123.56 8.08 136.50 11.29 0.00 0.00 0.00
MCBS Mid Continent Bancshares of KS 10.29 101.81 12.75 101.98 12.16 0.40 2.22 22.86
MIFC Mid Iowa Financial Corp. of IA 12.02 102.25 9.23 102.41 12.49 0.08 1.26 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* NM 101.32 9.58 121.58 NM 0.60 3.27 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 12.91 154.41 14.43 161.70 16.07 0.30 1.90 24.59
MFFC Milton Fed. Fin. Corp. of OH 15.82 83.84 16.75 83.84 17.12 0.48 3.84 60.76
MIVI Miss. View Hold. Co. of MN 11.32 78.01 14.72 78.01 11.94 0.16 1.49 16.84
MBBC Monterey Bay Bancorp of CA NM 83.99 12.58 85.02 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 112.12 13.12 112.12 NM 0.00 0.00 0.00
MSBK Mutual SB, FSB of Bay City MI NM 65.29 3.56 65.29 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 21.29 80.41 18.89 80.41 22.84 0.50 3.98 NM
NMSB Newmil Bancorp. of CT* 4.63 87.64 9.76 87.64 4.66 0.20 2.94 13.61
NFSL Newnan SB, FSB of Newnan GA 9.40 153.58 17.79 154.66 10.79 0.44 2.23 20.95
NASB North American SB of MO 7.95 138.76 10.19 144.56 8.33 0.63 2.12 16.84
NBSI North Bancshares of Chicago IL NM 90.13 15.63 90.13 NM 0.40 2.62 74.07
FFFD North Central Bancshares of IA 16.34 77.41 22.35 77.41 17.41 0.25 2.35 38.46
NEBC Northeast Bancorp of ME* 12.50 98.40 7.44 117.09 16.27 0.32 2.37 29.63
NEIB Northeast Indiana Bncrp of IN 17.31 87.07 17.71 87.07 17.31 0.30 2.48 42.86
NSBK Northside SB of Bronx NY* 9.45 138.78 10.74 140.10 10.95 1.00 2.84 26.81
NWEQ Northwest Equity Corp. of WI 12.21 86.85 11.93 86.85 12.80 0.36 3.43 41.86
NWSB Northwest SB, MHC of PA(29.9) 15.75 142.50 15.21 144.29 15.75 0.30 2.61 41.10
NSSY Norwalk Savings Society of CT* 13.68 119.24 9.52 119.24 15.99 0.00 0.00 0.00
NSSB Norwich Financial Corp. of CT* 14.80 107.97 11.42 119.64 14.80 0.40 2.76 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 12.75 93.53 11.62 93.53 13.09 0.76 3.90 49.67
OSBF OSB Fin. Corp. of Oshkosh WI NM 82.14 10.34 82.14 NM 0.64 2.78 NM
OCFC Ocean Fin. Corp. of NJ 15.84 76.33 14.32 76.33 15.48 0.00 0.00 0.00
OFCP Ottawa Financial Corp. of MI 22.57 108.91 11.89 135.87 22.57 0.32 1.97 44.44
PFFB PFF Bancorp of Pomona CA NM 73.78 10.62 74.65 NM 0.00 0.00 0.00
PVFC PVF Capital Corp. of OH 7.96 130.72 8.77 130.72 9.05 0.00 0.00 0.00
PCCI Pacific Crest Capital of CA* 9.14 110.97 8.77 110.97 11.33 0.00 0.00 0.00
PALM Palfed, Inc. of Aiken SC 14.78 120.12 10.15 126.25 17.57 0.08 0.66 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 8.45 116.72 8.67 117.28 9.04 0.52 2.12 17.93
PBIX Patriot Bank Corp. of PA NM 84.03 14.53 84.03 NM 0.24 1.85 57.14
PEEK Peekskill Fin. Corp. of NY NM 81.92 25.13 81.92 NM 0.36 3.03 NM
PFSB PennFed Fin. Services of NJ 11.32 82.63 7.42 104.33 10.45 0.00 0.00 0.00
PWBC PennFirst Bancorp of PA 13.75 102.84 8.07 112.89 13.89 0.36 2.62 36.00
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultants
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
PBKB People's SB of Brockton MA* 4.93 4.67 0.73 12.13 7.79 0.53 8.69 1.27 76.25 1.93
PFDC Peoples Bancorp of Auburn IN 15.26 15.26 1.45 9.62 8.72 1.44 9.56 0.33 97.48 0.41
PBCT Peoples Bank, MHC of CT(32.3)* 8.00 8.00 1.11 14.66 9.00 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 10.97 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 8.28 0.89 8.26 0.44 86.77 0.64
PERM Permanent Bancorp of IN 10.48 10.34 0.34 2.98 3.75 0.34 2.93 1.75 32.22 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 5.42 1.00 5.36 0.04 31.25 0.10
PHFC Pittsburgh Home Fin. of PA 16.43 16.43 0.65 3.98 5.54 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 8.48 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 8.15 1.93 7.56 0.21 122.90 0.83
PKPS Poughkeepsie SB of NY 8.50 8.50 1.94 24.70 24.31 2.56 32.53 2.68 36.80 1.34
PRBC Prestige Bancorp of PA 14.72 14.72 0.39 2.62 4.15 0.39 2.62 0.38 82.47 0.47
PETE Primary Bank of NH* 6.34 6.31 -0.04 -0.64 -0.66 -0.04 -0.56 1.81 47.18 1.48
PSAB Prime Bancorp, Inc. of PA 9.44 8.83 1.02 10.92 8.70 0.91 9.70 NA NA 0.97
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 9.75 1.01 10.82 1.09 97.07 1.52
PROV Provident Fin. Holdings of CA 13.90 13.90 0.15 1.10 1.71 0.43 3.07 2.22 40.31 0.99
PULB Pulaski SB, MHC of MO (29.0) 12.63 12.63 0.84 6.93 5.51 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 7.66 1.18 10.14 1.45 38.35 1.88
QCFB QCF Bancorp of Virginia MN 21.81 21.81 1.52 7.75 8.39 1.52 7.75 NA NA NA
QCBC Quaker City Bancorp of CA 9.88 9.82 0.50 4.91 6.53 0.48 4.74 2.31 57.33 1.54
QCSB Queens County SB of NY* 16.98 16.98 1.72 9.78 7.21 1.77 10.10 0.75 120.88 1.09
RCSB RCSB Financial, Inc. of NY* 7.30 7.05 0.93 10.94 11.03 0.93 10.87 0.78 85.48 1.30
RARB Raritan Bancorp. of Raritan NJ* 7.24 7.06 0.81 10.82 9.46 0.80 10.65 0.48 155.58 1.32
REDF RedFed Bancorp of Redlands CA 5.63 5.63 -0.47 -8.41 -12.47 -0.45 -8.09 4.50 31.29 1.76
RELY Reliance Bancorp of NY 8.86 5.98 0.88 6.79 7.12 0.85 6.49 0.85 29.31 0.54
RELI Reliance Bancshares Inc of WI* 56.23 56.23 1.47 2.62 3.46 1.47 2.62 NA NA 0.49
RFED Roosevelt Fin. Grp. Inc. of MO 4.86 4.59 0.63 13.98 7.77 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 8.42 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 5.00 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 6.04 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 1.45 0.11 1.12 1.84 13.07 0.31
SISB SIS Bank of Sprinfield MA* 7.42 7.42 1.26 17.35 13.00 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 4.25 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 9.48 0.79 9.63 1.34 64.69 1.31
SFBM Security Bancorp of MT 8.93 7.68 0.69 7.99 8.19 0.51 5.94 0.14 235.42 0.71
SECP Security Capital Corp. of WI 16.88 16.88 0.89 5.11 5.00 0.92 5.28 0.12 964.94 1.53
SFSL Security First Corp. of OH 8.71 8.47 1.18 13.57 11.11 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 1.71 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 6.75 0.82 6.12 NA NA 0.75
SOBI Sobieski Bancorp of S. Bend IN 18.49 18.49 0.42 2.27 3.22 0.42 2.27 NA NA 0.41
SOSA Somerset Savings Bank of MA(8)* 5.46 5.46 0.32 6.25 6.67 0.32 6.25 9.74 15.15 1.88
SMBC Southern Missouri Bncrp of MO 16.40 16.40 0.88 5.01 5.52 0.82 4.69 0.97 39.01 0.66
SWBI Southwest Bancshares of IL 12.00 12.00 1.19 8.95 8.78 1.19 8.91 0.13 160.59 0.30
SVRN Sovereign Bancorp of PA 4.07 2.63 0.70 16.67 11.30 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 10.59 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 8.62 0.86 9.44 0.74 125.05 1.35
STND Standard Fin. of Chicago IL 12.31 12.30 0.87 6.21 6.39 0.79 5.61 0.14 189.20 0.49
SFFC StateFed Financial Corp. of IA 20.11 20.11 1.18 5.80 6.54 1.18 5.80 NA NA 0.38
SFIN Statewide Fin. Corp. of NJ 11.10 11.06 0.52 5.43 4.71 0.64 6.66 1.26 41.78 1.47
STSA Sterling Financial Corp. of WA 4.18 3.35 0.33 7.72 6.69 0.32 7.56 0.63 82.62 0.87
SSBK Strongsville SB of OH 8.28 8.10 1.00 11.90 8.95 0.85 10.06 0.49 46.78 0.31
SFSB SuburbFed Fin. Corp. of IL 7.14 7.10 0.51 7.04 8.42 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
<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)
- ---------------------------------------
PBKB People's SB of Brockton MA* 12.84 120.71 5.95 127.52 17.92 0.28 2.95 37.84
PFDC Peoples Bancorp of Auburn IN 11.47 107.20 16.36 107.20 11.54 0.56 2.87 32.94
PBCT Peoples Bank, MHC of CT(32.3)* 11.12 149.58 11.96 149.58 13.80 0.80 3.79 42.11
PHBK Peoples Heritage Fin Grp of ME* 9.11 120.07 10.06 139.58 9.24 0.68 3.49 31.78
PBNB Peoples Sav. Fin. Corp. of CT* 12.08 94.81 10.25 102.50 11.57 0.92 4.23 51.11
PERM Permanent Bancorp of IN NM 81.02 8.49 82.12 NM 0.30 1.90 50.85
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 18.47 86.25 17.99 86.25 18.47 0.30 1.85 34.09
PHFC Pittsburgh Home Fin. of PA 18.06 71.80 11.80 71.80 18.06 0.00 0.00 0.00
PFSL Pocahnts Fed, MHC of AR (46.4) 11.79 106.30 6.32 106.30 11.51 0.80 5.52 65.04
POBS Portsmouth Bank Shrs Inc of NH(8)* 12.26 111.30 27.89 111.30 14.61 0.60 4.62 56.60
PKPS Poughkeepsie SB of NY 4.11 88.93 7.56 88.93 3.12 0.10 1.98 8.13
PRBC Prestige Bancorp of PA 24.07 63.03 9.28 63.03 24.07 0.00 0.00 0.00
PETE Primary Bank of NH* NM 94.98 6.02 95.36 NM 0.00 0.00 NM
PSAB Prime Bancorp, Inc. of PA 11.49 119.90 11.32 128.21 12.94 0.68 3.68 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* 10.26 105.86 9.38 105.86 9.96 0.80 2.86 29.30
PROV Provident Fin. Holdings of CA NM 64.46 8.96 64.46 21.00 0.00 0.00 0.00
PULB Pulaski SB, MHC of MO (29.0) 18.15 122.46 15.46 122.46 19.20 0.80 6.04 NM
PULS Pulse Bancorp of S. River NJ 13.05 128.25 15.25 128.25 12.96 0.70 3.94 51.47
QCFB QCF Bancorp of Virginia MN 11.91 85.63 18.67 85.63 11.91 0.00 0.00 0.00
QCBC Quaker City Bancorp of CA 15.32 73.84 7.30 74.26 15.89 0.00 0.00 0.00
QCSB Queens County SB of NY* 13.86 134.29 22.80 134.29 13.43 1.33 2.83 39.23
RCSB RCSB Financial, Inc. of NY* 9.07 106.54 7.77 110.23 9.13 0.48 1.86 16.90
RARB Raritan Bancorp. of Raritan NJ* 10.57 116.48 8.43 119.46 10.73 0.60 2.93 30.93
REDF RedFed Bancorp of Redlands CA NM 71.43 4.02 71.43 NM 0.00 0.00 NM
RELY Reliance Bancorp of NY 14.04 95.52 8.46 141.59 14.68 0.46 2.88 40.35
RELI Reliance Bancshares Inc of WI* NM 75.68 42.55 75.68 NM 0.00 0.00 0.00
RFED Roosevelt Fin. Grp. Inc. of MO 12.87 164.80 8.01 174.40 9.49 0.62 3.57 45.93
RVSB Rvrview SB,FSB MHC of WA(40.3) 11.88 134.17 14.78 151.58 13.18 0.22 1.53 18.18
SCCB S. Carolina Comm. Bnshrs of SC 20.00 95.24 27.11 95.24 20.00 0.60 3.75 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 16.55 73.44 10.32 73.44 16.55 0.24 1.96 32.43
SGVB SGV Bancorp of W. Covina CA NM 69.10 6.76 69.10 NM 0.00 0.00 0.00
SISB SIS Bank of Sprinfield MA* 7.69 119.62 8.88 119.62 7.56 0.00 0.00 0.00
SJSB SJS Bancorp of St. Joseph MI 23.52 115.71 13.50 115.71 24.07 0.40 1.93 45.45
SWCB Sandwich Co-Op. Bank of MA* 10.55 104.06 8.95 111.39 11.25 1.00 4.94 52.08
SFBM Security Bancorp of MT 12.20 94.95 8.48 110.31 16.43 0.64 3.07 37.43
SECP Security Capital Corp. of WI 19.98 100.93 17.04 100.93 19.34 0.60 1.00 20.07
SFSL Security First Corp. of OH 9.00 116.58 10.15 119.89 8.60 0.44 3.26 29.33
SHFC Seven Hills Fin. Corp. of OH(8) NM 100.61 21.34 100.61 NM 0.36 1.99 NM
SMFC Sho-Me Fin. Corp. of MO 14.81 92.17 11.04 92.17 14.95 0.00 0.00 0.00
SOBI Sobieski Bancorp of S. Bend IN NM 71.84 13.29 71.84 NM 0.00 0.00 0.00
SOSA Somerset Savings Bank of MA(8)* 15.00 89.82 4.90 89.82 15.00 0.00 0.00 0.00
SMBC Southern Missouri Bncrp of MO 18.10 91.63 15.03 91.63 19.34 0.50 3.54 64.10
SWBI Southwest Bancshares of IL 11.39 115.48 13.86 115.48 11.44 1.08 4.00 45.57
SVRN Sovereign Bancorp of PA 8.85 139.86 5.69 215.98 9.80 0.08 0.80 7.08
STFR St. Francis Cap. Corp. of WI 9.44 110.49 11.53 115.70 13.86 0.40 1.57 14.81
SPBC St. Paul Bancorp, Inc. of IL 11.60 109.59 10.13 109.97 11.91 0.40 1.77 20.51
STND Standard Fin. of Chicago IL 15.65 100.44 12.36 100.50 17.33 0.32 1.99 31.07
SFFC StateFed Financial Corp. of IA 15.29 86.87 17.47 86.87 15.29 0.40 2.54 38.83
SFIN Statewide Fin. Corp. of NJ 21.23 84.21 9.34 84.46 17.31 0.00 0.00 0.00
STSA Sterling Financial Corp. of WA 14.95 119.05 4.98 148.49 15.28 0.00 0.00 0.00
SSBK Strongsville SB of OH 11.17 127.27 10.53 130.03 13.21 0.48 2.29 25.53
SFSB SuburbFed Fin. Corp. of IL 11.88 81.63 5.83 82.11 13.84 0.32 1.91 22.70
SBCN Suburban Bancorp. of OH NM 86.66 11.27 86.66 19.48 0.60 4.00 NM
</TABLE>
<PAGE>
RP FINANCIAL, LC.
- -----------------------------------------
Financial Services Industry Consultant
1700 North Moore Street, Suite 2210
Arlington, Virginia 22209
(703) 528-1700
Exhibit IV-1 (continued)
Weekly Thrift Market Line - Part Two
Prices As Of July 12, 1996
<TABLE>
<CAPTION>
Key Financial Ratios Asset Quality Ratios
---------------------------------------------------------- -----------------------
Tang. Reported Earnings Core Earnings
Equity/ Equity/ ---------------------- --------------- 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)
- ---------------------------------------
SCSL Suncoast S&LA of Hollywood FL 2.81 2.80 0.33 11.53 11.84 -0.41 -14.33 0.31 47.77 0.19
THRD TF Financial Corp. of PA 14.31 14.31 0.92 5.57 6.60 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 4.48 0.74 5.61 1.77 32.15 1.26
PTRS The Potters S&L Co. of OH 9.73 9.73 0.54 5.69 7.13 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 5.91 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 8.32 1.20 7.47 0.48 69.57 0.55
TRIC Tri-County Bancorp of WY 17.83 17.83 0.94 4.70 5.44 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 7.45 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 8.85 0.77 9.97 0.66 178.39 1.90
UBMT United SB, FA of MT 23.53 23.53 1.50 6.68 7.33 1.49 6.63 NA NA 0.25
VABF Va. Beach Fed. Fin. Corp of VA 6.57 6.57 0.23 3.94 4.57 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 3.52 0.31 3.95 0.79 42.34 0.43
VFFC Virginia First Savings of VA 7.72 7.44 1.19 16.32 13.02 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 3.20 0.64 5.18 0.35 42.31 0.23
WSFS WSFS Financial Corp. of DE* 5.87 5.79 2.17 42.73 27.76 1.29 25.28 3.27 59.85 3.01
WVFC WVS Financial Corp. of PA* 15.12 15.12 1.23 8.09 7.95 1.38 9.04 0.45 178.29 1.35
WLDN Walden Bancorp of MA* 9.37 8.02 0.96 10.85 7.90 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 12.14 11.55 1.75 13.73 9.00 1.68 13.15 NA NA 0.37
WAMU Washington Mutual Inc. of WA(8)* 6.23 5.54 0.91 15.07 8.85 0.90 15.01 0.51 125.59 1.04
WYNE Wayne Bancorp of NJ 16.83 16.83 0.56 3.34 5.02 0.68 4.02 1.46 52.15 1.40
WAYN Wayne S&L Co., MHC of OH(46.7) 9.20 9.20 0.58 6.36 4.75 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 4.00 1.10 5.00 1.08 37.62 0.74
WBST Webster Financial Corp. of CT 5.16 3.92 0.51 10.33 6.90 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 6.33 0.79 6.07 0.39 70.55 0.32
WCBI WestCo Bancorp of IL 15.65 15.65 1.32 8.47 7.14 1.31 8.41 0.58 49.47 0.41
WSTR WesterFed Fin. Corp. of MT 13.28 13.28 0.76 5.73 6.83 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 5.50 0.83 3.18 0.34 78.86 0.44
WWFC Westwood Fin. Corp. of NJ 10.71 9.17 0.73 6.78 9.43 0.73 6.78 0.02 868.42 0.50
WFCO Winton Financial Corp. of OH(8) 7.89 7.68 0.93 12.26 7.56 0.76 10.02 0.53 64.84 0.41
FFWD Wood Bancorp of OH 14.59 14.59 1.17 8.14 7.90 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 5.19 0.90 7.45 0.23 72.95 0.19
YFCB Yonkers Fin. Corp. of NY 19.39 19.39 0.89 4.59 6.15 0.98 5.05 1.63 26.77 1.09
YFED York Financial Corp. of PA 8.78 8.78 0.98 11.40 9.85 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)
- ---------------------------------------
SCSL Suncoast S&LA of Hollywood FL 8.45 94.84 2.67 95.27 NM 0.00 0.00 0.00
THRD TF Financial Corp. of PA 15.16 86.73 12.41 86.73 15.66 0.32 2.25 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 22.35 84.20 16.40 84.20 24.21 0.20 1.72 38.46
PTRS The Potters S&L Co. of OH 14.02 77.54 7.55 77.54 14.27 0.24 1.49 20.87
THIR Third Financial Corp. of OH(8) 16.93 128.67 23.35 128.67 18.93 0.68 2.13 35.98
TSBS Trenton SB, FSB MHC of NJ(35.0) 12.02 113.90 21.68 116.53 18.03 0.35 2.77 33.33
TRIC Tri-County Bancorp of WY 18.37 86.75 15.47 86.75 18.95 0.50 2.78 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 13.43 103.50 14.25 103.50 15.48 0.64 3.94 52.89
UFRM United FS&LA of Rocky Mount NC 11.30 121.15 10.03 121.15 12.89 0.20 2.42 27.40
UBMT United SB, FA of MT 13.64 89.46 21.05 89.46 13.74 0.88 4.89 66.67
VABF Va. Beach Fed. Fin. Corp of VA 21.88 84.54 5.56 84.54 NM 0.16 2.29 50.00
VAFD Valley FSB of Sheffield AL(8) NM 118.59 9.59 118.59 NM 0.60 1.94 55.05
VFFC Virginia First Savings of VA 7.68 115.78 8.94 120.19 9.32 0.10 0.88 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 79.23 16.32 79.23 NM 0.00 0.00 0.00
WSFS WSFS Financial Corp. of DE* 3.60 132.05 7.75 133.85 6.09 0.00 0.00 0.00
WVFC WVS Financial Corp. of PA* 12.58 97.95 14.81 97.95 11.26 0.40 1.95 24.54
WLDN Walden Bancorp of MA* 12.66 111.23 10.42 130.04 11.43 0.64 3.20 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 11.12 149.15 18.10 156.79 11.60 0.92 4.36 48.42
WAMU Washington Mutual Inc. of WA(8)* 11.31 153.23 9.55 172.31 11.35 0.88 2.97 33.59
WYNE Wayne Bancorp of NJ 19.91 66.48 11.19 66.48 16.54 0.00 0.00 0.00
WAYN Wayne S&L Co., MHC of OH(46.7) 21.05 130.55 12.01 130.55 22.47 0.88 4.40 NM
WCFB Webster CityFSB,MHC of IA(45.2) 25.00 123.55 27.53 123.55 25.00 0.80 6.27 NM
WBST Webster Financial Corp. of CT 14.50 119.49 6.16 157.18 13.55 0.64 2.21 32.00
WEFC Wells Fin. Corp. of Wells MN 15.79 84.85 12.68 84.85 16.24 0.00 0.00 0.00
WCBI WestCo Bancorp of IL 14.00 116.21 18.18 116.21 14.09 0.48 2.29 32.00
WSTR WesterFed Fin. Corp. of MT 14.65 81.60 10.84 81.60 15.59 0.34 2.34 34.34
WOFC Western Ohio Fin. Corp. of OH 18.18 79.40 14.45 84.32 24.10 1.00 5.00 NM
WWFC Westwood Fin. Corp. of NJ 10.61 71.87 7.69 83.93 10.61 0.00 0.00 0.00
WFCO Winton Financial Corp. of OH(8) 13.22 131.96 10.41 135.60 16.18 0.42 3.05 40.38
FFWD Wood Bancorp of OH 12.66 100.15 14.62 100.15 13.08 0.36 1.82 23.08
WCHI Workingmens Cap. Hldgs of IN(8) 19.27 141.72 17.35 141.72 19.64 0.36 1.75 33.64
YFCB Yonkers Fin. Corp. of NY 16.25 74.60 14.47 74.60 14.77 0.00 0.00 0.00
YFED York Financial Corp. of PA 10.15 110.05 9.66 110.05 11.63 0.60 3.58 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
--------------- ---- ------- --------- ------ -----
<C> <C> <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 July 12, 1996 5510.6 646.2 1,103.5 375.6 219.8
</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
-------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
05/31/96 04/30/96 12/29/95 06/01/95 04/30/96 12/29/95 06/01/95
-------- -------- -------- -------- -------- -------- --------
All Pub. Traded Thrifts 383.0 380.3 376.5 309.5 0.7 1.7 23.7
MHC Index 429.2 459.0 458.5 349.5 -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 10.6
$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
index 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 Industrials 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, Midwest: IA, IL,
IN, KS, KY, MI, MN, MO, ND, NE, OH, SD, WI; Southwest: CO, LA, NM, OK, TX,
UT; Western: AZ, AK, CA, HI, ID, MT, NV, OR, WA, WY
<PAGE>
EXHIBIT IV-4
Market Area Acquisition Activity
<PAGE>
------------------------------------------------------------------------
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 Assets NPAs
--------- -------------- -------- ------ ------ ---- ---- ------ ----
($000) (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
04/09/96 Mutual Bancompany, Jefferson City, MO Pooling $54,913 11.31% 0.22% 2.18% 0.21% 159.32%
Pending Roosevelt Financial Group/Chesterfield, MO
03/22/96 Sentinel Fin. Corp., Kansas City, MO Pooling $161,879 6.35% 0.40% 6.59% 0.01% NM
Pending Roosevelt Financial Group/Chesterfield, MO
06/09/95 St. Francois Fin. Corp., Farmington, MO Purchase $39,751 18.53% 0.75% 4.16% 0.31% 179.72%
Pending New Era Bancorp/MO
06/16/95 Kirksville Bancshares, Kirksville, MO Pooling $136,205 15.25% 0.99% 6.46% 0.08% 1052.83%
12/29/95 Roosevelt Financial Group/Chesterfield, MO
04/13/95 WSB Bancorp, Washington, MO Purchase $95,676 18.98% 0.80% 4.33% 0.06% 514.75%
10/23/95 Roosevelt Financial Group/Chesterfield, MO
07/13/94 UNSL Financial Corp., Lebanon, MO Pooling $488,416 8.03% 0.90% 10.62% 1.47% 51.02%
01/06/95 Mercantile Bancorp/MO
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Acquisition Terms Control Premium Acquisition Pricing
At Completion Date
- --------------------------------------------------------------------------
Offer
Price/
Total Offer Cash One Day
Deal Price/ Debt Pre-Offer
Value Share Stock Price P/B P/TB P/A P/E
- ----- ----- ----- ----- --- ---- --- ---
($Mil) ($) (x) (%) (%) (%) (x)
- --------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$7.7 $23.00 Stock 1.37 124% 124% 14.00% NM
$13.5 $26.33 Stock NOT TRADED 117% 117% 8.90% 19.70
$10.8 $24.00 Cash NOT TRADED 127% 127% 28.70% NM
$28.5 $40.13 Stock NOT TRADED 137% 137% 20.92% 21.16
$26.2 $22.75 Cash 1.08 128% 128% 27.38% 31.20
$61.2 $37.51 Stock 1.13 150% 150% 12.53% 14.48
- --------------------------------------------------------------------------
July 12, 1996
</TABLE>
(1) NPAs consist of REO, non-accruing loans, and loans 90+ days deliquent.
Source: SNL Securities; American Banker
<PAGE>
EXHIBIT IV-5
Directors and Senior Management Summary Resumes
Dennis J. Adrian is the sole owner of Vandelicht Trucking, Inc., a local
trucking company. He is also the President and majority owner of Mo-Con, Inc.,
a local concrete mixing and delivery firm with which he has been associated
since 1968.
Billy M. Conner is the co-owner and operator of BCGC, Inc., a local
family farming operation.
Kermit D. Gohring is the President and Chief Executive Officer and a
Director of the Holding Company and the Savings Bank. He has been associated
with the Savings Bank since 1964 and President since 1974.
Richard W. Gohring is Executive Vice President and a Director of the
Savings Bank and Vice-President and a Director of the Holding Company. He has
been associated with the Savings Bank since 1985.
Clifford E. Hamilton, Jr. is a Circuit Judge in Columbia, Missouri and
presently serves as a general jurisdiction judge in the Thirteenth Judicial
Circuit of Missouri, which includes Fulton and Columbia. He currently serves as
the Vice Chairman of the Board.
Bonnie K. Smith is Senior Vice President, Secretary-Treasurer and a
Director of the Savings Bank and Secretary-Treasurer of the Holding Company.
She has been associated with the Savings Bank since 1971.
David W. West is the co-owner and operator of a local family farming
operation.
<PAGE>
EXHIBIT IV-6
Fulton Savings Bank, FSB
Pro Forma Regulatory Capital Ratios
<TABLE>
<CAPTION>
PRO FORMAT AT APRIL 30, 1996
-----------------------------------------------------------------------------------
15% above
Minimum of Estimated Midpoint of Estimated Maximum of Estimated Maximum of Estimated
Valuation Range Valuation Range Valuation Range Valuation Range
------------------- ------------------- ------------------- -------------------
1,105,000 Shares 1,300,000 Shares 1,495,000 Shares 1,719,250 Shares
April 30, 1996 at $10.00 Per Share at $10.00 Per Share at $10.00 Per Share at $10.00 Per Share
------------------ ------------------- ------------------- ------------------- -------------------
Percent of Percent of Percent of Percent of Percent of
Total Total Total Total Total
Amount Assets(1) Amount Assets(1) Amount Assets(1) Amount Assets(1) Amount Assets(1)
------ --------- ------ --------- ------ --------- ------ --------- ------ ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP capital ................ $9,117 10.66% $13,045 14.45% $13,786 15.21% $14,527 15.77% $15,379 16.51%
Tangible capital ............ $9,096 10.64% $13,024 14.43% $13,765 15.10% $14,506 15.75% $15,358 16.49%
Tangible capital requirement. 1,282 1.50 1,354 1.50 1,368 1.50 1,381 1.50 1,397 1.50
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Excess ...................... $7,814 9.14% $11,670 12.93% $12,397 13.60% $13,125 14.25% $13,961 14.99%
====== ===== ======= ===== ======= ===== ======= ===== ======= =====
Core capital ................ $9,096 10.64% $13,024 14.43% $13,765 15.10% $14,506 15.75% $15,358 16.49%
Core capital requirement(2).. 2,564 3.00 2,709 3.00 2,736 3.00 2,762 3.00 2,793 3.00
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Excess ...................... $6,532 7.64% $10,315 11.43% $11,029 12.10% $11,744 12.75% $12,565 13.49%
====== ===== ======= ===== ======= ===== ======= ===== ======= =====
Total capital(3) ............ $9,486 18.46% $13,414 25.62% $14,155 26.95% $14,896 28.26% $15,748 29.76%
Risk-based
capital requirement ........ 4,111 8.00 4,188 8.00 4,202 8.00 4,217 8.00 4,233 8.00
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Excess ...................... $5,375 10.46% $ 9,226 17.62% $ 9,953 18.95% $10,679 20.26% $11,515 21.76%
====== ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>
- ------------------------
(1) Tangible capital levels are shown as a percentage of tangible assets. 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) The current OTS core capital requirement for savings associations is 3% of
total adjusted assets. The OTS has proposed core capital requirements which
would require a core capital ratio of 3% of total adjusted assets for
thrifts that receive the highest supervisory rating for safety and soundness
and a core capital ratio of 4% to 5% for all other thrifts.
(3) Percentage represents total core and supplementary capital divided by total
risk-weighted assets. Assumes net proceeds are invested in assets that carry
a 20% risk-weighting.
<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
Fulton SB, FSB of Fulton, MO
Prices as of July 12, 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 14.01x 17.36x 18.28x 15.75x 16.02x 14.10x 13.99x
Price-core earnings = P/CORE 14.01x 17.73x 18.90x 15.87x 16.18x 15.01x 15.28x
Price-book ratio = P/B 64.95% 87.86% 86.23% 102.42% 87.92% 102.41% 98.05%
Price-tng book ratio = P/TB 64.95% 87.88% 86.33% 105.54% 87.92% 105.61% 100.50%
Price-assets ratio = P/A 13.49% 16.62% 16.25% 15.61% 15.03% 12.87% 11.55%
</TABLE>
<TABLE>
<CAPTION>
Valuation Parameters
- --------------------
<S> <C> <C> <C>
Pre-Conv Earnings (Y) $ 620,080 Est ESOP Borrowings (E) $ 1,040,000
Pre-Conv Book Value (B) $ 9,116,740 Cost of ESOP Borrowings (S) 0.00% (4)
Pre-Conv Assets (A) $ 85,495,990 Amort of ESOP Borrowings (T) 10 Years
Reinvestment Rate(2) (R) 4.02% MRP Amount (M) $ 520,000
Est Conversion Exp(3) (X) 542,000 MRP Expense (N) $ 104,000
Proceeds Not Reinvested (Z) $ 1,560,000
</TABLE>
<TABLE>
<CAPTION>
Calculation of Pro Forma Value After Conversion
- -----------------------------------------------
<S> <C>
1. V = P/E (Y-R(X+Z)-ES-(1-TAX)E/T-(1-TAX)N)) V = $ 12,998,438
----------------------------------------------
1-(P/E)R
2. V = P/B (B-X-E-M) V = $12,998,784
-----------------------
1-P/B
3. V = P/A (A-X-M-E) V = $ 13,004,103
-----------------------
1-P/A
</TABLE>
<TABLE>
<CAPTION>
Total Price Total
Conclusion Shares Per Share Value
- ---------- -------- --------- --------
<S> <C> <C> <C>
Appraised Value 1,300,000 $10.00 $ 13,000,000
RANGE:
- ------
- - Minimum 1,105,000 $10.00 $ 11,050,000
- - Maximum 1,495,000 $10.00 $ 14,950,000
- - Superrange 1,719,250 $10.00 $ 17,192,500
</TABLE>
(1) Pricing ratios shown reflect the midpoint appraised value.
(2) Net return assumes a reinvestment rate of 6.40 percent, and a tax rate of
37.12 percent.
(3) Conversion expenses include $542,000 of fixed expenses, and variable
expenses (marketing assistance) of 0.00 percent paid to market an
estimated 0.00 percent of the total gross proceeds.
(4) Assumes a borrowings cost of 0.00 percent and a tax rate of 37.12 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
Fulton SB, FSB of Fulton, MO
Prices as of July 12, 1996
<TABLE>
<CAPTION>
Mean Pricing Median Pricing
----------------- -----------------
Valuation Approach Subject Peers (Disc) Peers (Disc)
------------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
P/E Price-earnings 14.01x 17.36x -19.30% 18.28x -23.37%
P/CORE Price-core earnings 14.01x 17.73x -20.98% 18.90x -25.89%
P/B Price-book 64.95% 87.86% -26.07% 86.23% -24.68%
P/TB Price-tang. book 64.95% 87.88% -26.09% 86.33% -24.76%
P/A Price-assets 13.49% 16.62% -18.87% 16.25% -17.01%
Average Premium (Discount) -22.26% -23.14%
</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
Fulton SB, FSB of Fulton, MO
At the Minimum of the Range
1. Conversion Proceeds
Pro-forma market value ------------------------------ $ 11,050,000
Less: Estimated offering expenses --------------- 542,000
-----------
Net Conversion Proceeds ----------------------------- $ 10,508,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ----------------------------- $ 10,508,000
Less: Held in Non-Earning Assets(5)(1) ---------- 1,326,000
-----------
Net Proceeds Reinvested ----------------------------- $ 9,182,000
Estimated net incremental rate of return ------------ 4.02 %
-----------
Earnings Increase ----------------------------------- $ 369,513
Less: Estimated cost of ESOP borrowings(1) ------ 0
Less: Amortization of ESOP borrowings(2) -------- 55,586
Less: MRP Expense(4)----------------------------- 55,586
-----------
Net Earnings Increase ------------------------------- $ 258,341
3. Pro-Forma Earnings (rounded)
Period Before Conversion After Conversion
------ ----------------- ----------------
12 Months ended April 30, 1996 $ 620,080 $ 878,421
12 Months ended April 30, 1996 (Core) $ 620,080 $ 878,421
4. Pro-Forma Net Worth (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
April 30, 1996 $ 9,116,740 $ 9,182,000 (3)(4) $ 18,298,740
5. Pro-Forma Net Assets (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
April 30, 1996 $ 85,495,990 $ 9,182,000 $ 94,677,990
NOTE: Shares for calculating per share amounts: 1,105,000
(1) Estimated ESOP borrowings of $ 884,000 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 37.12
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 $ 884,000 are omitted from net worth.
(4) $ 442,000 purchased by the MRP with an estimated pre-tax expense
of $ 88,400 and a tax rate of 37.12 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
Fulton SB, FSB of Fulton, MO
At the Midpoint of the Range
1. Conversion Proceeds
Pro-forma market value ------------------------------ $ 13,000,000
Less: Estimated offering expenses --------------- 542,000
-----------
Net Conversion Proceeds ----------------------------- $ 12,458,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ----------------------------- $ 12,458,000
Less: Held in Non-Earning Assets(5)(1) ---------- 1,560,000
-----------
Net Proceeds Reinvested ----------------------------- $ 10,898,000
Estimated net incremental rate of return ------------ 4.02 %
-----------
Earnings Increase ----------------------------------- $ 438,570
Less: Estimated cost of ESOP borrowings(1) ------ 0
Less: Amortization of ESOP borrowings(2) -------- 65,395
Less: MRP Expense(4)----------------------------- 65,395
-----------
Net Earnings Increase ------------------------------- $ 307,780
3. Pro-Forma Earnings (rounded)
Period Before Conversion After Conversion
------ ----------------- ----------------
12 Months ended April 30, 1996 $ 620,080 $ 927,860
12 Months ended April 30, 1996 (Core) $ 620,080 $ 927,860
4. Pro-Forma Net Worth (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
April 30, 1996 $ 9,116,740 $ 10,898,000 (3)(4) $ 20,014,740
5. Pro-Forma Net Assets (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
April 30, 1996 $ 85,495,990 $ 10,898,000 $ 96,393,990
NOTE: Shares for calculating per share amounts: 1,300,000
(1) Estimated ESOP borrowings of $ 1,040,000 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 37.12
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 $ 1,040,000 are omitted from net worth.
(4) $ 520,000 purchased by the MRP with an estimated pre-tax expense
of $ 104,000 and a tax rate of 37.12 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
Fulton SB, FSB of Fulton, MO
At the Maximum of the Range
1. Conversion Proceeds
Pro-forma market value ------------------------------ $ 14,950,000
Less: Estimated offering expenses --------------- 542,000
-----------
Net Conversion Proceeds ----------------------------- $ 14,408,000
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ----------------------------- $ 14,408,000
Less: Held in Non-Earning Assets(5)(1) ---------- 1,794,000
-----------
Net Proceeds Reinvested ----------------------------- $ 12,614,000
Estimated net incremental rate of return ------------ 4.02 %
-----------
Earnings Increase ----------------------------------- $ 507,628
Less: Estimated cost of ESOP borrowings(1) ------ 0
Less: Amortization of ESOP borrowings(2) -------- 75,204
Less: MRP Expense(4)----------------------------- 75,204
-----------
Net Earnings Increase ------------------------------- $ 357,219
3. Pro-Forma Earnings (rounded)
Period Before Conversion After Conversion
------ ----------------- ----------------
12 Months ended April 30, 1996 $ 620,080 $ 977,299
12 Months ended April 30, 1996 (Core) $ 620,080 $ 977,299
4. Pro-Forma Net Worth (rounded)
Date Before Conversion Conversion Proceeds After Conversion
----------------- ------------------- -----------------
April 30, 1996 $ 9,116,740 $ 12,614,000 (3)(4) $ 21,730,740
5. Pro-Forma Net Assets (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
April 30, 1996 $ 85,495,990 $ 12,614,000 $ 98,109,990
NOTE: Shares for calculating per share amounts: 1,495,000
(1) Estimated ESOP borrowings of $ 1,196,000 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 37.12
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 $ 1,196,000 are omitted from net worth.
(4) $ 598,000 purchased by the MRP with an estimated pre-tax expense
of $ 119,600 and a tax rate of 37.12 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
Fulton SB, FSB of Fulton, MO
At the Superrange Maximum
1. Conversion Proceeds
Pro-forma market value ------------------------------ $ 17,192,500
Less: Estimated offering expenses --------------- 542,000
-----------
Net Conversion Proceeds ----------------------------- $ 16,650,500
2. Estimated Additional Income from Conversion Proceeds
Net Conversion Proceeds ----------------------------- $ 16,650,500
Less: Held in Non-Earning Assets(5)(1) ---------- 2,063,100
-----------
Net Proceeds Reinvested ----------------------------- $ 14,587,400
Estimated net incremental rate of return ------------ 4.02 %
-----------
Earnings Increase ----------------------------------- $ 587,044
Less: Estimated cost of ESOP borrowings(1) ------ 0
Less: Amortization of ESOP borrowings(2) -------- 86,485
Less: MRP Expense(4)----------------------------- 86,485
-----------
Net Earnings Increase ------------------------------- $ 414,073
3. Pro-Forma Earnings (rounded)
Period Before Conversion After Conversion
------ ----------------- ----------------
12 Months ended April 30, 1996 $ 620,080 $ 1,034,153
12 Months ended April 30, 1996 (Core) $ 620,080 $ 1,034,153
4. Pro-Forma Net Worth (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- -----------------
April 30, 1996 $ 9,116,740 $ 14,587,400 (3)(4) $ 23,704,140
5. Pro-Forma Net Assets (rounded)
Date Before Conversion Conversion Proceeds After Conversion
---- ----------------- ------------------- ----------------
April 30, 1996 $ 85,495,990 $ 14,587,400 $ 100,083,390
NOTE: Shares for calculating per share amounts: 1,719,250
(1) Estimated ESOP borrowings of $ 1,375,400 with an after-tax cost of 0.00
percent, assuming a borrowing cost of 0.00 percent and a tax rate of 37.12
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 $ 1,375,400 are omitted from net worth.
(4) $ 687,700 purchased by the MRP with an estimated pre-tax expense
of $ 137,540 and a tax rate of 37.12 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
Net Income Less: Net Tax Effect Less: Extd
to Common Gains(Loss) @ 34% Items
---------- ----------- ---------- ----------
($000) ($000) $000) ($000)
Comparable Group
----------------
<S> <C> <C> <C> <C>
CMRN Cameron Fin. Corp. of MO 2,761 -55 19 0
CAPS Capital Savings Bancorp of MO 1,820 0 0 0
FBSI First Bancshares of MO 1,042 -26 9 0
HFSA Hardin Bancorp of Hardin MO 511 -2 1 0
KYF Kentucky First Bancorp of KY 786 0 0 0
NSLB NS&L Bancorp of Neosho MO 527 -55 19 0
PCBC Perry Co. Fin. Corp. of MO(1) 756 0 0 0
SMFC Sho-Me Fin. Corp. of MO 1,966 -30 10 0
SMBC Southern Missouri Bncrp of MO 1,337 -126 43 0
SFFC StateFed Financial Corp. of IA 847 0 0 0
</TABLE>
<TABLE>
<CAPTION>
Estimated
Core Income Estimated
to Common Shares Core EPS
Comparable Group ---------- ---------- ---------
----------------- ($000) ($000) ($)
<S> <C> <C> <C>
CMRN Cameron Fin. Corp. of MO 2,725 2,850 0.96
CAPS Capital Savings Bancorp of MO 1,820 1,039 1.75
FBSI First Bancshares of MO 1,025 1,302 0.79
HFSA Hardin Bancorp of Hardin MO 510 1,058 0.48
KYF Kentucky First Bancorp of KY 786 1,389 0.57
NSLB NS&L Bancorp of Neosho MO 491 888 0.55
PCBC Perry Co. Fin. Corp. of MO(1) 756 856 0.88
SMFC Sho-Me Fin. Corp. of MO 1,946 1,821 1.07
SMBC Southern Missouri Bncrp of MO 1,254 1,724 0.73
SFFC StateFed Financial Corp. of IA 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 (9)
Timothy M. Biddle, Vice President (7)
Alan P. Carruthers, Senior Consultant-Community Banking (14)
